United States v. Iwuala, 789 F.3d 1

Iwuala opened Above All Home Care and Medical Supply, Inc., a Massachusetts DME supplier, in 2007 and obtained Medicare approval the following year to bill Medicare for prescribed equipment.
In 2009, Iwuala formed a scheme with John Nasky in Texas: Nasky would obtain prescriptions and inventory to be billed under Above All's Medicare provider number, with 65% to Nasky and 35% to Iwuala.
The scheme relied on forged prescriptions, illicit beneficiary IDs, and claims for unnecessary equipment; Above All billed Medicare for over $1,000,000 and received >$400,000 in payments before activity ceased.
Nasky was subsequently charged and arrested in 2009; Above All’s Medicare provider status was terminated after the scheme came to light.
Iwuala was indicted on one count of conspiracy to commit health-care fraud, four counts of health-care fraud, and one count of making a false statement; a jury convicted on four counts and the district court sentenced him to 42 months.
On appeal, Iwuala challenged evidentiary rulings, sufficiency of the evidence, and the loss calculation for sentencing; the court affirmed conviction and sentence.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Admissibility of Nasky reputation evidence	419 evidence and related testimony supported knowledge of fraud.	Reputation and prior acts were improper character evidence and prejudicial.	Court affirmed admission; evidence was specially relevant to knowledge and did not produce undue prejudice.
Sufficiency of evidence for conspiracy and health-care fraud	Evidence showed defendant knew of and joined the fraudulent scheme.	Evidence was circumstantial and insufficient to prove knowledge/intent beyond reasonable doubt.	Rational jurors could find guilty knowledge and willful participation; sufficiency affirmed.
Loss calculation for sentencing	Face amount billed to Medicare ($1,097,160) should be used as intended loss.	Intended loss should be actual Medicare payments, with possible offsets for repayments and legitimate claims.	Use face amount as presumptive evidence of intended loss; but offset considerations were harmless and loss determination preserved.
Method for applying loss and edition of guidelines	2008 guidelines permitted face-value loss as intended loss.	Should apply different interpretation or offsets.	Court applied established precedent allowing face-value as starting point; no reversible error.

United States v. Gobbi, 471 F.3d 302 (1st Cir. 2006) (standard of review for evidentiary rulings is abuse of discretion)
United States v. Raymond, 697 F.3d 32 (1st Cir. 2012) (plain-error review when objections are not preserved)
United States v. Sepulveda, 15 F.3d 1161 (1st Cir. 1993) (plain-error review framework for evidentiary challenges)
United States v. O'Brien, 14 F.3d 703 (1st Cir. 1994) (circumstantial evidence may prove intent in fraud)
United States v. Spinney, 65 F.3d 231 (1st Cir. 1995) (chains of inference permissible in criminal reasoning)
United States v. Isiwele, 635 F.3d 196 (5th Cir. 2011) (face amount of fraudulent claims as presumptive evidence of intended loss)
United States v. Miller, 316 F.3d 495 (4th Cir. 2003) (face value of fraud claims used to estimate loss)
Alphas v. United States, F.3d (1st Cir. 2015) (recognizes reliance on face amount as presumptive intended loss with burden shifting)