In U.S. v. Alvarez, No. 08-17178 (Oct. 19, 2010), the Court affirmed Medicare fraud convictions and sentences.
The Court agreed with defendant Alvarez that the district court erred when it excluded a recorded statement made by one Medicare conspirator to Alvarez that “there’s no fraud whatsoever here” – a statement that indicated that Alvarez was not privy to the scheme. The statement was not hearsay, because Alvarez did not seek to admit it for its truth, but to show that Alvarez was not aware of the fraud. It therefore did not matter whether, as the district court found, the statement did not fit within a hearsay exception, because the statement was not hearsay in the first place.
However, the error in excluding the recorded statement was harmless because the statement was effectively admitted through witness testimony.
The Court found no error in the district court’s admission of evidence that co-defendant Mateos had been married to a ringleader of the fraud. The Court did not find this evidence so “inflammatory” as to render the district court’s cautionary instruction ineffective.
Turning to sentencing, the Court found that the 30-year sentence imposed on Alvarez was not outside the range of reasonable sentences. The Court recognized the “troubling” disparity with lesser sentences imposed on more culpable co-conspirators. However, these defendants provided substantial assistance to the government. In addition, the Court found that the district court’s reasons for an upward variance were justified: Alvarez was a doctor who breached her position of trust; the fraud lasted over a period of months; Alvarez followed a lower standard of care with regard to the health of her patients; Medicare fraud was rampant in the Miami area; Alvarez “blatantly lied” during her testimony at trial and showed “no remorse.” In addition, Congress recently amended the Sentencing Guidelines for Medicare fraud, and under the new Guidelines Alvarez’ 30-year sentence fell at the high end of the Guidelines.
The Court rejected Mateos’ argument that the district court erroneously found her responsible for the entire intended loss (more than $9 million). The evidence showed that Mateos was aware of the essence of the fraud, and the district court therefore held her responsible for losses stemming from all reasonably foreseeable acts of coconspirators.
