UNITED STATES OF AMERICA v. BRYAN BAILEY; CALVIN BAILEY; SANDRA BAILEY
Nos. 18-5607/5901/5903
United States Court of Appeals, Sixth Circuit
September 1, 2020
RECOMMENDED FOR PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 20a0289p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
BRYAN BAILEY (18-5607); CALVIN BAILEY (18-5901);
SANDRA BAILEY (18-5903),
Defendants-Appellants.
Nos. 18-5607/5901/5903
Appeal from the United States District Court
for the Western District of Tennessee at Jackson.
No. 1:15-cr-10011—S. Thomas Anderson, District Judge.
Argued: January 29, 2020
Decided and Filed: September 1, 2020
Before: SILER, GIBBONS, and READLER, Circuit Judges.
COUNSEL
ARGUED: Charles H. Barnett, IV, SPRAGINS, BARNETT & COBB, PLC, Jackson,
Tennessee, for Appellant in 18-5607. Kenneth P. Tableman, KENNETH P. TABLEMAN, P.C.,
Grand Rapids, Michigan, for Appellant in 18-5901. Kevin M. Schad, OFFICE OF THE
FEDERAL PUBLIC DEFENDER, Cincinnati, Ohio, for Appellant in 18-5903. Matthew
Wilson, UNITED STATES ATTORNEY’S OFFICE, Jackson, Tennessee, for Appellee.
ON BRIEF: Daniel J. Taylor, Jackson, Tennessee, for Appellant in 18-5607. Kenneth P.
Tableman, KENNETH P. TABLEMAN, P.C., Grand Rapids, Michigan, for Appellant in 18-
5901. Kevin M. Schad, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Cincinnati, Ohio,
for Appellant in 18-5903. Matthew Wilson, UNITED STATES ATTORNEY’S OFFICE,
Jackson, Tennessee, Naya Bedini, UNITED STATES ATTORNEY’S OFFICE, Memphis,
Tennessee, for Appellee.
UNITED STATES v. BAILEY
Nos. 18-5607/5901/5903
United States Court of Appeals, Sixth Circuit
September 1, 2020
JULIA SMITH GIBBONS, Circuit Judge. A jury convicted Sandra Bailey, Calvin
Bailey, and their son Bryan Bailey of conspiring to commit healthcare fraud and other related
crimes.1 The district court sentenced Sandra to 120 months’ imprisonment, Calvin to forty-five
months’ imprisonment, and Bryan to eighty-four months’ imprisonment. Sandra,
Bryan bring a number of challenges to their convictions, and Sandra and Calvin also challenge
their sentences. Most of those challenges lack merit. We agree with Sandra, however, that the
district
Calvin that the district court
responsible—and by extension, his Guidelines-range sentence—by holding him responsible for
losses beyond those he agreed to jointly undertake. Accordingly, we affirm
Sandra, Calvin, and Bryan. We vacate Sandra’s and Calvin’s sentences, however, and remand to
the district court for resentencing.
I.
Medicare and Medicaid, two federally funded
percent of the cost of power wheelchairs and back braces when the devices are medically
necessary. A wheelchair is medically necessary when the patient is unable to perform
of daily life even with the aid of a cane, walker, manual wheelchair, or scooter. Wheelchairs
must be prescribed by a medical professional who has performed a face-to-face examination of
the patient.
In fall 2009, Sandra, Calvin, and Bryan Bailey began working for Jaspan Medical
Systems, a company that sold durable medical equipment (“DME”) like back braces, knee
Moreover, the government’s
That error, however, was harmless. We need only vacate the
VI.
Calvin and Sandra argue that their trial was marred by a variance—a difference between the charges in the indictment and the proof offered during trial. See United States v. Kuehne, 547 F.3d 667, 683 (6th Cir. 2008). According to Calvin and Sandra, the government proved two conspiracies at trial instead of the one alleged: one between them, Perry, and Presson in Tennessee, and another between Bryan, Dennis Sensing, and Brenda Sensing in Mississippi.
Calvin and Sandra agree that, because neither raised the issue before the district court, we review for plain error. Thus, Calvin and Sandra must show that there was “(1) error, (2) that is plain, and (3) that affects substantial rights.” United States v. Perez-Martinez, 746 F. App’x 468, 472 (6th Cir. 2018) (quoting United States v. Maliszewski, 161 F.3d 992, 1003 (6th Cir. 1998)).
Calvin and Sandra bear the burden of proving that a variance occurred. Kuehne, 547 F.3d at 683. “Whether single or multiple conspiracies have been shown is usually a question of fact to be resolved by the jury [and is] to be considered on appeal in the light most favorable to the government.” United States v. Smith, 320 F.3d 647, 652 (6th Cir. 2003) (quoting United States v. Schultz, 855 F.2d 1217, 1222 (6th Cir. 1988)). Accordingly, we will find a variance in a conspiracy case only where “the evidence can reasonably be construed only as supporting a finding of multiple conspiracies.” Id. (quoting United States v. Warner, 690 F.2d 545, 548 (6th Cir. 1982)). “The principal considerations in determining the number of conspiracies are the existence of a common goal, the nature of the scheme, and the overlapping of the participants in various dealings.” Id. “To prove a single conspiracy, the government need only show that each alleged conspirator had knowledge of and agreed to participate in what he knew to be a collective venture directed toward a common goal.” Id. at 653. “Once the existence of a . . . conspiracy, as charged, has been shown, proof of a formal agreement is unnecessary.” United States v. Rugiero, 20 F.3d 1387, 1391 (6th Cir. 1994). And, “[a] defendant may be convicted for a single conspiracy if the evidence supports a finding that he had knowledge or foresight
Calvin and Sandra argue that the government’s evidence concerning Jaspan’s selling of power wheelchairs in Northern Mississippi from 2010 through 2013 was proof of a second conspiracy that “had nothing to do with” them. 18-5901 CA6 R. 41, Appellant Br., at 23. We disagree. While Calvin and Sandra’s characterization of the evidence is a permissible one, it is not the only one. See Smith, 320 F.3d at 652. Reviewed for plain error or otherwise, that is not enough to reverse their convictions. See United States v. Spearman, 186 F.3d 743, 746 (6th Cir.
1999) (explaining that the evidence “need not remove every reasonable hypothesis except that of guilt” (quoting United States v. Vannerson, 786 F.2d 221, 225 (6th Cir. 1986))).
Bryan’s expansion of Jaspan into northern Mississippi, which occurred before Sandra and Calvin left Jaspan, was consistent with the Baileys’ common goal of enriching themselves by increasing their sales of—and therefore sales commissions for—power wheelchairs to individuals insured by Medicare who did not qualify for power wheelchairs. See Smith, 320 F.3d at 652. Bryan received a $100 commission for every sale made by Dennis Sensing. The jury could have reasonably concluded that the expansion furthered the Baileys’ common goal by providing the Baileys with new customers. The nature of the scheme also remained the same. The scheme used the same methods. Bryan, Sandra, and Calvin continued to sell DMEs to individuals insured by Medicare who did not qualify. Bryan told Sensing that he used the same forgery techniques that the two were deploying to sell power wheelchairs in Mississippi to “tak[e] care of momma.” DE 319, Trial Tr., Page ID 2968. And, even after leaving Jaspan, Sandra relied on the referrers she had cultivated with Bryan at Jaspan to help her sell DMEs for DuraTech, Apple, and Orthopaedic Specialties. Members of the conspiracy also overlapped. See Smith, 320 F.3d at 652. Dennis Sensing was hired by Jaspan before Sandra and Calvin left. Bryan, Sandra, and Calvin relied on Presson to prescribe DMEs after Sandra and Calvin left Jaspan. And Wiggins told Winbush in 2013 that she could get in touch with Bryan through Sandra.
Calvin and Sandra’s argument appears to rest on the fact that they were not employed by Jaspan for much of Sensing’s criminal conduct. But we have previously held defendants responsible for a conspiracy where they did not participate in every portion of the conspiracy, particularly where participants overlapped and were “family who regularly associated with one another.” Smith, 320 F.3d at 653. Moreover, “[w]here a conspiracy contemplates a continuity of purpose and a continued performance of acts, it is presumed to exist until there has been an affirmative showing that it has terminated; and its members continue to be conspirators until there has been an affirmative showing that they have withdrawn.” United States v. Hamilton, 689 F.2d 1262, 1268 (6th Cir. 1989) (quoting United States v. Mayes, 512 F.2d 637, 642–43 (6th Cir. 1975)). Here, Calvin and Sandra point to no evidence that they terminated their conspiracy
with Bryan. Indeed, after Calvin and Sandra left Jaspan, they continued to use the same methods of defrauding Medicare as Bryan, used the same doctor to prescribe power wheelchairs to customers as Bryan, and remained in contact with Bryan about obtaining
VII.
Sandra argues that the district court erroneously imposed three sentencing enhancements resulting in a procedurally unreasonable sentence. Specifically, she challenges the district court’s imposition of enhancements for leadership,
A.
The Sentencing Guidelines instruct a district court to increase a defendant’s offense level by four if the defendant was “an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive.”
Here, the district court adopted the finding of the presentence report, which stated, in relevant part:
Adjustment for Role in the Offense: The defendant was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive; therefore, four levels are added. USSG §3B1.1(a). During the conspiracy, the defendant was instrumental in organizing this conspiracy. She was able to utilize hundreds of patients due to directing numerous individuals in giving her patient referrals. She also obtained a sales position for Calvin Bailey, who had little if any sales experience, and she sold wheelchairs and back braces for him.
DE 369, Presentence Report, Page ID 4296. The district court agreed with that finding, explaining “[a]s is stated in the report, it does appear based upon the testimony that a large number of, the report says hundreds of patients. I believe the total number was above 600.” DE 426, Sentencing Tr., Page ID 5407.
Sandra contends that the district court relied on an impermissible factor—the number of victims—in determining her role in the offense. That is incorrect. The district court appeared to be restating, albeit clumsily, the presentence report’s rationale for the application of the enhancement. The presentence report’s rationale does not rely on the number of victims; instead, it focuses on Sandra’s “ab[ility] to utilize hundreds of patients due to directing numerous individuals in
B.
Sandra also argues that the district court erred in imposing a sentence enhancement for obstruction of justice. See
have reviewed the same question for clear error. Id. We need not settle the matter now because the district court’s decision to impose the enhancement survives even de novo review.
The Sentencing Guidelines instruct district courts to impose a two-level increase to the defendant’s offense level when a defendant has willfully obstructed the investigation of her offense and her obstructive conduct related to that offense.
The district court identified two instances of obstructive conduct that justify the enhancement’s application. Because at least one represents an attempt by Sandra to cause another to materially lie to investigators, we find no error in the district court’s decision to impose the obstruction of justice enhancement.
Sandra attempted to cause Winbush to lie to investigators in a conversation on February 6, 2014. Sandra had previously told Winbush not to tell others about the money she gave him because “it could get [her] into trouble.” 18-5607 CA6 R. 44, Appellee App., CD Ex. 49 (1:11:00 to 1:11:54). Then, on February 6, 2014, Sandra called Winbush and told him that she was under investigation and that the money she paid him was for his driver’s license. The district court found that “it would be difficult for reasonable minds not to conclude that there was a[n] attempt by Ms. Bailey to obstruct justice, based on what she said to Ronnie Winbush.” DE 426, Sentencing Tr., Page ID 5410. We agree.
Sandra’s conduct rises to the level of obstruction. Sandra was charged with violating the anti-kickback statute, requiring the government to establish that she “knowingly and willfully offer[ed] or pa[id] any remuneration . . . to any person to induce such person to refer an individual . . . for the furnishing of any item or service for which payment may be made in
Sandra’s conduct is akin to the conduct in United States v. Huntley, 530 F. App’x 454 (6th Cir. 2013). There, Huntley, who was charged with possessing a firearm as a felon, asked two unidentified individuals to have another individual claim possession of the gun. Id. at 455–56. We held that his conduct rose to the level of obstruction because it represented “a substantial step toward [Huntley’s] goal of” avoiding responsibility for his offense. Id. at 458. Similarly, Sandra’s conduct was a substantial step toward avoiding responsibility for providing kickbacks in exchange for referrals in violation of the anti-kickback statute.
Sandra argues that her conversation with Winbush cannot constitute obstructive conduct because she was unaware that she was under investigation during the call. But Sandra stated that she was aware of the FBI investigation during the call. Besides, “[o]bstructive conduct that occurred prior to the start of the investigation of the instant offense of conviction may be covered . . . if the conduct was purposefully calculated, and likely, to thwart the investigation or prosecution of the offense of conviction.”
C.
Finally, Sandra argues the district court erred by imposing the mass-marketing sentence enhancement when she engaged only in word-of-mouth solicitation.
The Sentencing Guidelines instruct district courts to increase the defendant’s offense level by two if “the offense . . . was committed through mass-marketing.”
§ 2B1.1(b)(2)(A)(ii). The Guidelines’ commentary further provides that “‘mass-marketing’ means a plan, program, promotion, or campaign that is conducted through solicitation by telephone, mail, the Internet, or other means to induce a large number of persons to [] purchase goods or services.” Id. § 2B1.1 cmt. n.4(A). Other circuits have explained that the commentary’s invocation of “telephone, mail, the Internet” suggests that the enhancement’s application turned on the method the defendant used to market her goods, not the number of victims reached by way of the marketing. United States v. Heckel, 570 F.3d 791, 794 (7th Cir. 2009); see also United States v. Olshan, 371 F.3d 1296, 1301 (11th Cir. 2004) (“[T]he [mass-marketing] enhancement focuses on the method of inflicting the harm.”). Specifically, other circuits look to “the scope and sophistication of the defendant’s fraud.” United States v. Fredette, 315 F.3d 1235, 1244 n.4 (10th Cir. 2003).
We believe that this is the correct approach. The emphasis on sophistication and scope is consistent with the text of the Sentencing Commission’s commentary calling for a “plan, program, promotion, or campaign.”
The government disagrees, arguing that the commentary’s “other means” language encompasses word-of-mouth marketing. And the government points us to some Fifth Circuit decisions interpreting the “other means” language just that way. United States v. Mauskar, 557 F.3d 219, 233 (5th Cir. 2009); United States v. Jackson, 220 F. App’x 317, 332 (5th Cir. 2007). But we do not believe that “other means” sweeps so broadly. To interpret it as such would be to ignore the traditional interpretive practice of reading ambiguous and broad items in a list with reference to the more specific items listed. See United States v. Douglas, 634 F.3d 852, 858 (6th Cir. 2011). And, given that many anti-kickback violations involve a defendant paying others for referrals, such an interpretation risks requiring district courts to apply the mass-marketing enhancement for nearly all convictions under the anti-kickback statute.
Because Sandra’s only marketing was word-of-mouth marketing, the district court erred in imposing the mass-marketing sentencing enhancement. Accordingly, we vacate Sandra’s sentence and remand to the district court for resentencing.
VIII.
Finally, Calvin challenges his sentence—both his term of imprisonment and his restitution amount. The district court found that the loss attributed to Calvin was $2,103,544.81, producing a sixteen-level increase in Calvin’s offense level. See
A.
The Sentencing Guidelines instruct district courts to impose a sixteen-level increase to a defendant’s offense level if the loss caused by the conduct exceeds $1,500,000.
Calvin argues that the district court considered conduct outside his relevant conduct when setting his loss amount. “[W]hether conduct constitutes ‘relevant conduct’ . . . is reviewed de novo, while the underlying factual findings regarding whether that conduct is ‘within the scope’ of, ‘in furtherance of,’ and ‘reasonably foreseeable’ in connection with jointly undertaken criminal activity are reviewed for clear error.” United States v. Moody, 787 F. App’x 857, 868 (6th Cir. 2019) (alteration in original) (quoting United States v. Donadeo, 910 F.3d 886, 893 (6th Cir. 2018)).
“[T]he scope of conduct for which a defendant can be held accountable under the sentencing guidelines is significantly narrower than the conduct embraced by the law of conspiracy.” United States v. Swiney, 203 F.3d 397, 402 (6th Cir. 2000) (quoting United States v. Okayfor, 996 F.2d 116, 120 (6th Cir. 1993)). Instead, for purposes of determining relevant conduct,
While we cannot fault the district court for failing to methodically apply the then-unannounced Donadeo factors, we must agree with Calvin that the district court employed too broad a standard for determining his relevant conduct. At the sentencing hearing, the government and Calvin disputed whether Calvin could be held responsible for the full amount of loss occasioned by sales of power wheelchairs accomplished by Sandra paying Cindy Mallard to forge prescriptions in Perry’s name. The district court sided with the government, explaining:
Mr. Bailey was found guilty of . . . conspiracy. And as the attorneys are well aware, once you’re involved in a conspiracy -- a conspiracy is really nothing more than an agreement to engage in unlawful activity. And then once that occurs, and you’re a part of the conspiracy, then you can be held liable for the acts and actions of the other co-conspirators throughout the duration of the conspiracy, unless there is some indication that you voluntarily withdraw or remove yourself as a part of the conspiracy. And we don’t, to my knowledge, we don’t have that type of situation in this case.
DE 425, Sentencing Tr., Page ID 5286. While the district court’s description of conspiracy liability is correct, we have explained that “relevant conduct” in jointly undertaken criminal activity for Sentencing Guidelines purposes is not as broad as conspiracy liability. Donadeo, 910 F.3d at 895; Swiney, 203 F.3d at 402. Instead, under the Sentencing Guidelines, the
defendant can only be held accountable for the “the criminal activity that the particular defendant agreed to jointly undertake.” Donadeo, 910 F.3d at 895. This error of law requires that we vacate Calvin’s sentence.
The government disagrees, arguing that the Donadeo factors produce the same result. Were the district court’s error that it did not anticipate and address the Donadeo factors, remand would be unnecessary. See Moody, 787 F. App’x at 868–69. But our qualm with the district court is that it applied the wrong legal standard. The district court’s improper calculation of the loss amount was a procedural error that resulted in a sixteen-level increase in Calvin’s sentence. Remand is therefore necessary. United States v. Warshak, 631 F.3d 266, 328 (6th Cir. 2010).
B.
Calvin also argues that the errors that marred the district court’s amount of loss finding also infected the district court’s restitution order.3 We review
Calvin’s argument is unavailing. The district court erred in calculating Calvin’s amount of loss by using conspiracy principles. But a district court does not err by using conspiracy principles to determine a defendant’s amount of restitution. Indeed, we have previously rejected a defendant’s argument that he should not be held responsible for restitution in a conspiracy case because “his particular actions did not cause the victims’ losses.” Bogart, 576 F.3d at 576.
Nor is it incongruous to order an amount of restitution that reflects the loss caused by the entire conspiracy, even while simultaneously finding an amount of loss that reflects only conduct closely related to the defendant. The Mandatory Victim Restitution Act (“MVRA”), not the Sentencing Guidelines, governs restitution awards.
restitution serve different purposes. “[Restitution]’s purpose is to make the victims whole; conversely, the Sentencing Guidelines serve a punitive purpose.” United States v. Gossi, 608 F.3d 574, 581 (9th Cir. 2010) (quoting United States v. Gordon, 393 F.3d 1044, 1052 n.6 (9th Cir. 2004)). That a defendant played a minor role in a conspiracy and warrants a lesser punishment does not change the amount of loss sustained by the conspiracy’s victims. Finally, the MVRA has its own method of responding to the unique issues of culpability posed by conspiracy: where multiple defendants are responsible for a victim’s loss,
Finally, Calvin argues that the district court should have addressed his argument that the restitution amount should be apportioned between him and Sandra, not applied jointly. But we have previously held that, while a district court “has the option” to apportion restitution payment among defendants in conspiracy cases, it “is not required to do so.” Bogart, 576 F.3d at 576; see also United States v. Kolodesh, 787 F.3d 224, 242 (3d Cir. 2015).
IX.
For the reasons stated, we affirm the convictions of Bryan, Sandra, and Calvin Bailey. We also affirm the district court’s restitution order to Sandra and Calvin. We vacate, however, the sentences of Sandra and Calvin and remand for resentencing in accord with this opinion.