803 F.3d 778
6th Cir.2015Background
- Richard Shannon worked as a recruiter for Shahab-operated home health agencies, obtaining beneficiaries' signatures and supplying pre-signed notes that enabled fraudulent Medicare billing; he was paid roughly $400–$600 per recruited “patient.”
- Shannon was indicted with others for conspiracy to commit health-care fraud (18 U.S.C. § 1349); he gave inculpatory statements at a December 3, 2010 proffer session under a signed proffer (Kastigar) agreement limiting use of those statements except to rebut evidence inconsistent with the proffer.
- At trial a cooperating co-conspirator (Akhtar) testified about Shannon’s recruiting and payments to him; defense cross-examination of Akhtar elicited testimony suggesting Akhtar lacked first-hand knowledge and that some patients complained they were not paid.
- The government moved to introduce Shannon’s proffer statements as rebuttal under the proffer waiver; the district court found the defense’s cross-examination triggered the waiver and admitted portions of the proffer at trial; a jury convicted Shannon of one count of conspiracy.
- At sentencing the government argued a loss of $1,680,975 based on an extrapolation tied to a claimed $186,775 paid to Shannon (including additional relevant-conduct payments not proven at trial); the district court adopted the loss amount and sentenced Shannon to 86 months (below the resulting guideline range).
- On appeal the Sixth Circuit affirmed admission of the proffer statements but vacated and remanded for resentencing because the district court failed to make the required Rule 32(i)(3)(B) factual findings by a preponderance of the evidence on disputed loss/relevant-conduct matters.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Shannon waived proffer protections by eliciting testimony on cross-exam that contradicted his proffer | Government: defense cross-examination presented evidence inconsistent with proffer, triggering waiver allowing proffer statements as rebuttal | Shannon: he did not “offer evidence” because he did not call witnesses or put on a defense; cross-exam was proper impeachment only | Waiver applies: eliciting testimony on cross-examination can constitute an offer of evidence; district court did not abuse discretion admitting proffer statements |
| Whether the cross-examined testimony was inconsistent enough to trigger the waiver | Government: counsel’s questioning sought to negate Shannon’s payments to beneficiaries, contradicting proffer | Shannon: cross-exam merely attacked witness credibility and probative weight, not a contradictory position | Held inconsistent: questioning went beyond mere impeachment and undercut proffer statements; admission was within district court’s discretion |
| Whether the district court properly calculated loss by relying on relevant-conduct evidence at sentencing | Government: court may consider uncharged relevant conduct and make reasonable loss estimates by preponderance | Shannon: government relied on evidence not in trial record and court failed to resolve contested facts per Rule 32(i)(3)(B) | Court erred procedurally: consideration of relevant conduct is permitted, but the court failed to make and state factual findings by a preponderance of evidence, requiring resentencing |
| Whether admission of proffer statements or sentencing error deprived Shannon of a fair trial or affected substantial rights | Government: proffer waiver was voluntary; admission was limited rebuttal; sentencing based on permissible relevant conduct | Shannon: proffer admission and loss finding denied fair trial and were prejudicial | Proffer admission not reversible; sentencing procedurally unreasonable and vacated for Rule 32(i)(3)(B) failure |
Key Cases Cited
- United States v. Barrow, 400 F.3d 109 (2d Cir. 2005) (treats proffer agreement as contract and applies expansive waiver language to evidence elicited on cross-examination)
- United States v. Krilich, 159 F.3d 1020 (7th Cir. 1998) (cross-examination can present a position inconsistent with a proffer and trigger waiver)
- United States v. Hardwick, 544 F.3d 565 (3d Cir. 2008) (waiver permits rebuttal where cross-examined testimony implies a role inconsistent with proffer)
- Mezzanatto v. United States, 513 U.S. 196 (1995) (Rule 410 protections may be waived and proffer agreements are enforceable as voluntary waivers)
- United States v. White, 492 F.3d 380 (6th Cir. 2007) (district court must make factual findings by a preponderance on disputed sentencing facts and comply literally with Rule 32)