UNITED STATES OF AMERICA, Plаintiff-Appellee, v. SERGIUS A. RINALDI, Defendant-Appellant.
No. 05-4113
United States Court of Appeals For the Seventh Circuit
ARGUED APRIL 3, 2006—DECIDED AUGUST 31, 2006
Appeal from the United States District Court for the Central District of Illinois. No. 01 CR 30110—Richard Mills, Judge.
BAUER, Circuit Judge. After protracted proceedings before the district court, Sergius A. Rinaldi pleaded guilty to the charges of mail fraud,
Rinaldi‘s case is not new to this Court. During the course of the legal proceedings against him we have heard two interlocutory appeals through which we hаd the opportunity to establish the history of the matter. See In re Grand Jury Proceedings, 280 F.3d 1103 (7th Cir. 2002); United States v. Rinaldi, 351 F.3d 285 (7th Cir. 2003). In the interest of efficiency, we relate only those facts relevant to the instant appeal.
I. Background
Sergius A. Rinaldi, D.M.D., is an orthodontist with offices in Edwardsville and Springfield, Illinois. Part of his practice involved the treatment of wards of the state of Illinois, who were under the protection of the Illinois Department of Children and Family Services (DCFS), and individuals who received Medicaid assistance through the Illinois Department of Public Aid (IDPA). From 1994 to 2001, Rinaldi submitted claims for payment to these two departments; some of these claims were for services not rendered.
In January 2001, Rinaldi received a grand jury subpoena demanding the production of records pertaining to these billings. The subpoena covered his original case files and forms for certain patients, appointment books and logs, patient sign-in sheets, and records of cancellation. These records were never produced. At a contempt hearing on the matter, the government presented evidence that Rinaldi had concealed the files and documents after receiving the subpoena. The district court held Rinaldi in contempt and ordered him to be imprisoned and fined until the material was produced. We affirmed this decision in In re Grand Jury Proceedings, 280 F.3d 1103 (7th Cir. 2002). On
In late February 2002, with the aid of counsel, Rinaldi negotiated with the government and pleaded guilty to one count of fraud and one count of obstructing justice. The district court conducted a full Rule 11 hеaring and entered judgment on March 25, 2002. The sentencing hearing was initially scheduled for the following June 24, but was repeatedly deferred at the request of both parties.
On January 29, 2003, Rinaldi moved to withdraw his guilty plea based upon a two-prong claim of actual innocence. Primarily, he argued that he had recently discovered that he submitted invoices using a “bundled fee“, not a “fee for services,” system. The bundled fee system would have allowed him to bill a flat rate for a package of services regardless of whether they were actually performed. Alternatively, he claimed that any mistakes he made in record-keeping and billing were the result of his newly diagnosed, but pre-existing, DSM IV condition of Adult Attention Deficit Disorder (AADD), not criminal intent. The district court denied his motion, holding that both of these claims were available prior to his having entered his plea, and that they ran contrary to his testimonial admission of guilt at the plea colloquy.
The defense moved to have the district court reconsider the denial of his motion to withdraw the guilty plea. In his motion, Rinaldi аrgued that prior to pleading guilty he believed he properly billed Medicaid under the bundled-fee system. He submitted that the government misrepresented that the billing procedure was illegal, and promised, but failed, to provide legal support for this argument. It was only after the government‘s failure to produce the supporting law that he learned IDPA paid for services with the bundled-fee agreement. While this motion was pending, the
The defendant submitted reports from Robert Chapman, M.D., and George Athey, Jr., Ph.D., ABPP, a clinical psychologist and neuropsychologist. Dr. Chapman diagnosed Rinaldi with AADD and opined that the condition would diminish his capacity to form the requisite criminal intent. Dr. Athey reported that, in his opinion, Rinaldi was incapable of forming the intent necessary to carry out the crimes as charged. After reviewing the reports and the entirety of the record, the district court denied Rinaldi‘s motion to reconsider. Judge Mills held that even the presence of the AADD symptoms did not precludе Rinaldi‘s capacity to form the requisite mens rea. United States v. Rinaldi, 347 F.Supp.2d 594, 600 (C.D. Ill. 2004). Regarding the bundled-fee system, the court further held that the IDPA did not allow this invoice method, and that any evidence or argument regarding the claim was available to Rinaldi contemporaneous with his plea; thus it was not new evidence warranting a withdrawal of the plea. Id. at 604. Rinaldi filed a subsequent motion to reconsider the denial of his motion to reconsider. This, too, was denied. The district court set the sentencing hearing for April 25, 2005.
Following the denial of his motions to reconsider, Rinaldi filed threе successive motions to continue the sentencing hearing. In May 2005, he argued that he needed six additional months to conduct a statistical analysis of the impact of his fraud. The methodology for this analysis consisted of tracking down and interviewing the defendant‘s former patients about their past appointments and treatments. Because of a delay in obtaining the necessary contact information from the IDPA, the district court granted a three month extension, but stated that it would be the final continuance. Six months, the court warned, was “too long.” Order 4, (May 25, 2005) (No. 144). Nevertheless, at the end of July, the defendant requested an additional three months to continue working on his statistical analysis and to ensure the availability of crucial witnesses. The district court granted Rinaldi the time necessary only to secure the attendance of his expert witnesses. The sentencing hearing was finally held over the course of three days on October 14, 17, and 18, 2005.
Prior to the hearing, both parties filed sentencing memoranda. Rinaldi objected to the calculation of loss, сertain facts regarding his offense conduct, and his criminal intent as described in the pre-sentence investigation report (PSR). He also moved for a downward departure based upon his claim of diminished capacity. The government moved for an upward departure, arguing that any difficulty in calculating the loss caused by Rinaldi‘s scheme was the result of his own obstruction of justice.
At the hearing, both parties re-presented their evidence submitted in consideration of the motion to reconsider Rinaldi‘s motion to withdraw his guilty pleа. Doctors Athey and Chapman testified for the defendant consistent with their previously filed reports. Dr. Chapman, however, acknowledged under questioning that if the evidence of defendant‘s conduct was as the government described, it would show “intentional conduct” requiring some “executive
The government presented testimony from Rinaldi‘s former employees and their medical expеrts. The employees detailed Rinaldi‘s specific fraudulent conduct in billing for services not rendered and his having removed records from his office after receiving the government subpoena. Dr. Bornstein testified that Rinaldi‘s consistent alteration of one patient‘s records reflected a “systematic, calculated behavior.” Sentencing Hr‘g Tr., Vol. II at 450, Oct. 17, 2005. He further opined that based upon prior testimony introduced at the hearing, and his personal evaluation of the defendant, Rinaldi had both the capacity tо form the requisite mens rea, and to conform his actions to the demands of the law. Finally, the court heard the testimony of Susan K. Jackson, an auditor for the Illinois State Police Medicaid Fraud unit, who summarized the evidence supporting the loss calculation in the PSR.
When calculating Rinaldi‘s sentence, the district court adopted the recommendations of the PSR and found an offense level of 14, criminal history category of I; yielding a Guideline range of 15 - 21 months. After examining the factors presented in
On appeal Rinaldi claims the court erred in (1) denying his motion to withdraw his guilty plea, (2) denying his motion for continuance to determine the impact of his fraudulent scheme, and (3) the reasonableness of his sentence. We address these claims in sequence.
II. Analysis
A. The Motion to Withdraw His Guilty Plea
Rinaldi submits that because he presented evidence of his actual innocence, the district court erred in denying his motion to withdraw the guilty plea. The right to withdraw a guilty plea is nоt absolute. United States v. Bradley, 381 F.3d 641, 645 (7th Cir. 2004). Once his plea was accepted by the court, withdrawal was available only upon his showing a “fair and just reason” to do so.
In examining a motion to withdraw a guilty plea, the district court has three options: it can permit the withdrawal of the plea, conduct an evidentiary hearing, or deny the motion with an explanation as to why the evidence is insufficient or incredible. Silva, 122 F.3d at 415. The district court below considered substantial evidence from both parties when hearing Rinaldi‘s motion to reconsider the court‘s denial of his motion to withdraw the guilty plea. Judge Mills‘s opinion on the matter reviewed the medical reports and testimony of Dr. Chapman and Dr. Athey for the defendant, and Dr. Moriearty and Dr. Bornstein for the
The district court thеn compared this testimony to that of Dr. Moriearty and Dr. Bornstein, neither of whom diagnosed Rinaldi with AADD. Dr. Moriearty specifically opined that even if the defendant‘s symptoms were such as he presented or exaggerated in her examination, they would not render him incompetent to form the specific intent necessary to commit the crimes as charged. Dr. Bornstein had a similar conclusion. He found that, while Rinaldi did have a narcissistic personality disorder, the defendant presented no mental defect that would prevеnt him from possessing the necessary mens rea for the crime, or to be capable of assisting his attorney in the plea negotiations or entering the plea itself. Additionally, Dr. Bornstein observed that during the period in which Rinaldi alleged a diminished mental capacity from AADD, he was able to build and maintain a successful dental practice with offices in two separate cities. In Dr. Bornstein‘s final opinion, Rinaldi‘s intellectual capacity was not diminished, but was instead above average.
Following this detailed review of the medical еvaluations submitted by both parties, the district court concluded that “the Defendant‘s AADD diagnosis did not prevent him from forming criminal intent. Accordingly, he has not presented a claim of actual innocence as to that issue.” Rinaldi, 347 F.Supp.2d at 600. In making this finding, the district court explicitly agreed with the testimony of Dr. Moriearty and Dr. Bornstein, explaining that it was particularly persuaded by Rinaldi‘s ability to carry on his successful practice during the same period he claimed to be
Rinaldi‘s claim of factual innocence based upon his alleged bundled-fee billing arrangement is similarly unpersuasive. He argues that the IDPA permitted a prorated billing scheme such as his, and that he pleaded guilty only as a result of the government‘s hollow promise to demonstrate the system‘s impermissibility. The genesis of this claim was a policy statement drafted by David Spinner, a contract administrator with the state of Illinois. The document was produced in discovery and asserted that a dentist may bill for monthly adjustments “whether he sees the patient or not. Monthly payments will be made for approved treatment as long as the client remains eligible and is in active treatment.” Rinaldi, 347 F.Supp.2d at 602. In a letter dated March 5, 2002, however, the Government wrote to defense counsel:
[T]he Illinois Department of Public Aid has disavowed this memorandum and clarified that in all instances, IDPA would deny payment for any claim for orthodontia service when a child is not physically present to receive the service. The ‘final’ word on that subject came from Steven Bradley, the head of the Bureau of Comprehensive Health Services for IDPA. According to Mr. Bradley, that has always been the policy of IDPA and the author or [policy statement] is simply wrong.
347 F.Supp.2d at 602. Further, David Spinner testified to these facts at the sentencing hearing. He stated that this policy statement was an erroneous interpretation of the
After hеaring this testimony, the district court found the disavowed Spinner memo, which formed the core of Rinaldi‘s argument, “irrelevant.” Sentencing Hr‘g Tr., Vol. I at 238, Oct. 14, 2005. Particularly persuasive was the fact that the “bundled-fee” scheme was never discussed prior to, or during, the time of the fraud. Further, the court noted that Rinaldi‘s argument was contradicted by the general handbook provided to participants in the Illinois Medical Assistance Program, to which Rinaldi was subject. This general handbook provided that unkept appointments are not subject to рayment. In light of this evidentiary analysis by the district court, and the ongoing inability of the defendant to demonstrate how he could have been misled after the fact by the government‘s representations of his own fee system, Rinaldi‘s bundled-fee claim fails.
Further, we are definitively not persuaded that the district court made a mistake in its evidentiary findings on either of Rinaldi‘s claims to demonstrate a fair and just reason to withdraw his guilty plea. United States v. Mendoza, 2006 WL 2290702, No. 05-3323. slip op. at 5 (7th Cir. Aug. 10, 2006) (internal quotation omitted). We find that the court did not abuse its discretion.
B. Denial of Motion for Continuance
Rinaldi argues next that the district court erred in denying him thе entire six months he requested to calculate the loss attributable to his fraud. A district court‘s decision to deny the continuance of the sentencing hearing will be upheld absent an abuse of discretion. Zambrella v. United States, 327 F.3d 634, 638 (7th Cir. 2003). To demonstrate such an abuse, Rinaldi must show that he was actually prejudiced by the court‘s refusal to grant the continuance. United States v. Rodgers, 755 F.2d 533, 539-40 (7th Cir. 1985) (citing Morris v. Slappy, 461 U.S. 1, 11-12 (1983); “broad discretion must be granted trial courts on matters of continuances; only an unreasoning and arbitrary insistence upon expeditiousness in the face of justifiable request for delay violates thе right to the assistance of counsel.” (Internal quotations omitted)). Rinaldi claims the district court‘s decision prejudiced his ability to compile data that would have both negated his criminal intent and established the loss incurred by his fraud. As discussed above, the question of intent was settled on March 25, 2002, when Rinaldi voluntarily pleaded guilty. Regarding the determination of loss, any prejudice he suffered was at his own hands.
Rinaldi first made the court aware of his intent to conduct a statistical sampling on the impact of his fraud on November 22, 2002. This was nine months aftеr he pleaded guilty and more than three years before his sentencing hearing. Instead of following through with the study, however, Rinaldi apparently put the matter on hold and focused on withdrawing his guilty plea. During this time, he moved for, and was granted three continuances of his sentencing. It cannot be said that the district court arbitrarily insisted upon expeditiousness. See id. Contrarily, Judge Mills granted Rinaldi permission to issue a subpoena to the relevant state agencies to aid in his project. Then, in May 2005, when Rinaldi moved for a continuance to finalize the
Further, in United States v. Robbins, 197 F.3d 829 (7th Cir. 1999), we upheld the district court‘s decision in proceeding to sentencing over defense counsel‘s objection only four months after trial. 197 F.3d at 847-48. When considering whether Robbins had been prejudiced by the denied continuance, our decision relied on, inter alia, the likelihood that additional time would have yielded information useful at sentencing. Id. Rinaldi‘s analytical methodology relied upon locating and interviewing former patients regarding their dates of treatment. These patients, we keep in mind, were child or teenage wards of the state at the time of alleged treatment, and the dates in question ranged as far back 1994. The likelihood of their remembering or having maintained records on such matters for this length of time is questionable, thus casting doubt over the usefulness of the analysis as a whole.
Additionally, we note that the entire purpose of the statistical analysis was to reconstruct data that had bеen in Rinaldi‘s possession; data that he admitted concealing from the government. We find it hard to place blame for the outcome of Rinaldi‘s own actions on the shoulders of the district court. Considering the span of years between the entry of Rinaldi‘s guilty plea, the multiple continuances granted by the district court, and the questionable value of the analysis, we cannot find that no reasonable person would agree with the district court‘s denial of defendant‘s motion.
C. Reasonableness of the Sentence
Lastly, Rinaldi argues that the district court erred in failing to grant him а “downward departure” in his prison sentence and for imposing a fine of $500,000. After United States v. Booker, 543 U.S. 220 (2005), the concept of “departures” is outmoded; we review the district court‘s sentencing decisions for unreasonableness. 543 U.S. at 264; United States v. Wallace, 2006 WL 2338021, No. 05-3675, slip op. at 4 (7th Cir. Aug. 14, 2006); United States v. Arnaout, 431 F.3d 994, 1003 (7th Cir. 2005). “District courts are aided in their determination of reasonableness via a mandatory examination of the factors set forth in
At the close of sentencing, the district court adopted the findings made in the PSR1 and properly calculated Rinaldi‘s Guideline range at 15-21 months. After considering numerous issues that fall within the ambit of the
Both
The district court, however, did not clearly err in relying on the only complete financial information with which it was provided. See United States v. Olson, 450 F.3d 655, 683-84 (7th Cir. 2006). Despite Rinaldi‘s claim that the district court relied on outdated financial data contained in the original and revised PSR (March 31, 2003, and August 31, 2005, respectively), he failed to raise any objections on this point before or during his sentencing. Indeed, the only uрdated financial information to which he directs our attention is contained in an incomplete United States Probation Office questionnaire, labeled Defendant‘s Exhibit
In examining the value of the fine, we review the district court‘s decision to impose the statutory maximum for unreasonableness. Booker, 543 U.S. at 264; Arnaout, 431 F.3d at 1003. As with all sentences outside of the suggested Guidelines range, we look to see if the district court has given us an adequate explanation for its divergence. “In doing so, we consider all of the district court‘s reasons, oral and written alike.” Wallace, No. 05-3675 at 12. Because the fine imposed was more than twelve times the Guidelines suggestion, however, the district court‘s reasons must be particularly compelling. United States v. Jordan, 435 F.3d 693, 697 (7th Cir. 2006) (affirming district court‘s imposition of statutory maximum sentence 103 months above the Guidelines’ range). They are.
At sentencing, Judge Mills gave the following statements when considering the mandate of
[T]he Court does feel that Dr. Rinaldi has committed a terrible crime against the people of Illinois, not heinous, not involving physical touching or injury, but he has bilked the taxpayers out of a tremendous amount of money. And we will never know the exact amount of that.
Sentencing Hr‘g Tr., Vol. III at 690, Oct. 18, 2005. Further, he specifically noted that
[h]e‘s no better than a highwayman that pulls his pistols and [says] stand and deliver. And he has taken the taxpayers of Illinois and taxpayers of the United States right down the pea patch. I don‘t know the exact amount [of his fraud], none of us do. But we know that he‘s well-to-do, he‘s been eminently successful in his practice. His net worth stands at $2,340,200.
Id. at 688. This doubt regarding the extent of the fraud, the court noted, existed in part “because of the actions of the defendant.” Id. at 689. Moments before announcing the sentence, the district judge expressed his concern “whether the sentence that I‘m going to give will be a deterrence adequate enough.” Id. at 690. In the court‘s subsequent written opinion, it again recited the Guidelines suggested fine, and concluded that, pursuant to
Ultimately, the district court‘s statements evidenced its open concern for the magnitude of Rinaldi‘s fraud, the difficulty encountered in ascertaining the full extent of the impact—the fault for which lay with the defendant‘s admitted obstruction of justice—and the possibility that Rinaldi may have benefitted from that obstruction. The Guidelines range, Judge Mills repeatedly noted, simply did not reflect the degree of harm the defendant had causеd. Id. at 698. But the court distinguished the impact of Rinaldi‘s crime as one of non-violence and chose not increase his term of imprisonment, but opted instead to increase the fine; punishing the perpetrator with a correlate of his own crime. Because of this thorough analysis of the nature, circumstances, and seriousness of the offense in consideration of
III. Conclusion
For the foregoing reasons, the defendant‘s guilty plea and sentence are AFFIRMED.
A true Copy:
Teste:
Clerk of the United States Court of Appeals for the Seventh Circuit
USCA-02-C-0072—8-31-06