Eleventh Circuit Court of Appeals - Published Opinions

Tuesday, July 02, 2013

Bane: Fines Subject to Apprendi

In U.S. v. Bane, No. 11-14158 (June 28, 2013), the Court vacated the restitution and fine portions of a sentence, but otherwise affirmed the term of incarceration imposed on a defendant convicted of health care fraud and of making false claims against the government.

The Court affirmed the imposition of a 20-level enhancement for an offense involving a loss in excess of $7 million, rejecting Bane’s argument that the loss amount should not include the value of oxygen provided that was medically necessary for patients. The Court noted that a Guideline Application Note provides that no credit for value received should be given in cases in which “regulatory approval by a government agency” was obtained by fraud. The Court applied this rule, because Bane obtained Medicare’s approval to pay for oxygen by fraudulently representing that the requisite lab test had been performed. [Dissenting from this portion of the decision, Judge Jordan reasoned that “regulatory approval” referred to an FDA-type approval of the introduction of a drug into the market.]

For the same reason, the Court rejected Bane’s challenge to the finding that his crime involved 270 victims.

The Court also affirmed the imposition of a “sophisticated-means” enhancement, pointing out that Bane recruited oximetry labs to participate in the scheme, installed software, and falsified test results.

The Court reversed the restitution order, pointing out that restitution should not result in a “windfall” to the victims. Here, 80 to 90 percent of the services Bane provided were medically necessary, and the victims paid no more for the services than they otherwise would have. On remand, Bane would bear the burden of proving the amount of the offset to which he was entitled.

Turning to the fine, the Court agreed with Bane that the $3 million fine violated Apprendi because exceeded the $ 2.5 million maximum amount authorized by the jury’s convictions – the fine was based on the loss amount under an alternative calculation by the district court, not submitted to the jury. Reviewing the issue for plain error, and applying a recent Supreme Court case, the Court held that fines are subject to Apprendi. The Court therefore found that the $3 million was “plain error.”