United States v. Sylvia Walter-Eze
2017 U.S. App. LEXIS 16269
| 9th Cir. | 2017Background
- Appellant Sylvia Walter-Eze was convicted after a jury trial of conspiracy to commit health-care fraud, multiple counts of health-care fraud, and conspiracy to pay/receive kickbacks; sentenced to 97 months, 3 years supervised release, and $1,939,529.27 restitution.
- After multiple pretrial continuances, Walter-Eze substituted new counsel two weeks before trial; new counsel represented they could be ready by the set date but sought a morning-of-trial continuance due to illness and incomplete preparation.
- The district court conditioned a longer continuance on defense counsel paying jury/witness costs (≈ $3,600) and warned of possible bar-reporting; counsel proceeded to trial to avoid fees/sanctions and obtained a two-day short continuance instead.
- The government presented evidence of a multi-year scheme through Ezcor to bill Medicare/Medi‑Cal for unnecessary durable medical equipment (notably high-value power wheelchairs), with recruiters and physicians receiving kickbacks; Walter-Eze testified and denied knowledge.
- At trial the court gave a deliberate-ignorance (Jewell) instruction after defense summation; at sentencing the court found intended loss > $2.5M and applied a leadership-role enhancement, ordering restitution equal to Medicare/Medi‑Cal payments.
Issues
| Issue | Walter-Eze's Argument | Government's Argument | Held |
|---|---|---|---|
| Whether the district court’s conditioned continuance created an actual conflict of interest requiring presumed prejudice under Cuyler | Darden was forced to choose between client’s interest (longer continuance) and his own pecuniary/professional interest (paying fees and risking bar-reporting); the conflict adversely affected representation so prejudice should be presumed | Even if a conflict existed it was discrete and the proper standard is Strickland; defendant fails to show prejudice | Court found an actual conflict that adversely affected counsel but applied Strickland (not Cuyler presumption) because the conflict produced a single, identifiable decision; defendant failed to prove prejudice, so conviction affirmed |
| Whether the district court abused discretion by denying/conditioning a morning-of-trial continuance | A longer continuance was necessary for competent counsel preparation | Court had previously warned about dilatory tactics; continuances had been granted repeatedly; court offered a conditioned continuance and ultimately a short two-day delay | No abuse of discretion; court did not improperly deny continuance and defendant showed no prejudice |
| Whether giving a deliberate-ignorance (Jewell) instruction after defense closing was reversible error | Instruction was unsupported and risked lowering mens rea; timing deprived defense of opportunity to respond | Defense summation put deliberate ignorance at issue; record supported willful blindness; defense was not prejudiced and did not request reargument | No abuse of discretion; instruction was supported by evidence and not prejudicial |
| Whether sentencing loss, leadership enhancement, and restitution calculations were erroneous | Intended-loss and restitution were overstated because not all billed claims were fraudulent and defendant didn’t intend full reimbursement; leadership enhancement unsupported | Amount billed is prima facie evidence of intended loss in health-care fraud; government and PSR evidence supported scheme size and restitution | No clear or plain error: district court reasonably relied on billed amounts for intended loss, applied §3B1.1(a) enhancement (≥5 participants), and ordered restitution for reimbursements received |
Key Cases Cited
- Strickland v. Washington, 466 U.S. 668 (establishes ineffective assistance standard: performance and prejudice)
- Cuyler v. Sullivan, 446 U.S. 335 (prejudice presumed where counsel labored under an actual conflict of interest in joint representation)
- Mickens v. Taylor, 535 U.S. 162 (limits application of Sullivan beyond joint-representation contexts)
- United States v. Jewell, 532 F.2d 697 (en banc) (authorizes deliberate-ignorance instruction)
- Holloway v. Arkansas, 435 U.S. 475 (discusses inherent problems and presumptions in joint-representation conflicts)
- United States v. Popov, 742 F.3d 911 (in health-care fraud, amount billed is prima facie evidence of intended loss for sentencing)