United States v. Susan Regueiro, 240 F.3d 1321, 11th Cir. (2001)

240 F.3d 1321 (11th Cir.
2001)
UNITED STATES of America, Plaintiff-Appellee,

v.
Susan REGUEIRO, Defendant-Appellant.
No. 99-14192
Non-Argument Calendar.
United States Court of Appeals,

Eleventh Circuit.
Feb. 6, 2001.
Feb. 16, 2001.
Appeal from the United States District Court for the Southern District of
Florida.(No. 97-00574-CR-JAL), Joan A. Lenard, Judge.
Before CARNES and MARCUS, Circuit Judges, and HAND * , District
Judge.
PER CURIAM:
Susan Regueiro appeals her 144-month sentence for conspiracy to defraud the
United States by submitting false Medicare claims, 18 U.S.C. 371, conspiracy
to commit money laundering, 18 U.S.C. 1956(h), and money laundering, 18
U.S.C. 1956(a)(1)(B)(i). She contends that the district court erred by departing
upward for disruption of a government function, pursuant to United States
Sentencing Guideline 5K2.7, based on her involvement in a scheme to defraud
Medicare. Because the district court properly concluded that the nature and
scope of Regueiro's conduct significantly disrupted the government's provision
of Medicare benefits, we affirm its decision to depart pursuant to 5K2.7. 1
I. FACTS
Regueiro pleaded guilty to one count each of conspiracy to defraud the United
States, conspiracy to commit money laundering, and money laundering. The
charges arose from her involvement in a scheme to defraud Medicare through
the submission of false claims for home health care services. Regueiro and
codefendant Leopoldo Perez worked as administrators for Mederi of Dade

County, Inc., a not-for-profit home health provider that had contracted to
provide Medicare-covered services. As part of their fraudulent scheme,
Regueiro and Perez established more than 100 nursing groups whose ostensible
purpose was to provide home health care services to qualified patients.
However, Regueiro and Perez used the nursing groups to bill Medicare for
thousands of services that were never performed, or that were performed on
patients who were not eligible to receive Medicare benefits. Medicare of Dade
County reimbursed Mederi for the false claims through electronic fund
transfers to bank accounts controlled by Regueiro and Perez, and they shared in
the profits from those false claims. Both of them were extensively involved in
all aspects of the scheme, including establishing the nursing groups, recruiting
individuals to operate the nursing groups and physicians and nurses to
participate in the fraud, and creating false documents to support the fraudulent
home health visits. As part of their plea agreements, Regueiro and Perez agreed
that the loss to Medicare from their scheme totaled $15,238,489 and that the
value of the funds laundered totaled $3,570,907.
3
Prior to sentencing, the Probation Office prepared a Pre-Sentencing

Investigation Report, which it made available to the parties. The PSI assigned
Regueiro a base offense level of 20 according to U.S.S.G. 2S1.1, the guideline
applicable to the money-laundering offenses. The PSI then added seven levels
to Regueiro's base offense level due to the value of funds laundered, assessed
her a four-level enhancement for her role as an organizer or leader, and granted
her a three-level reduction for acceptance of responsibility. As a result,
Regueiro's total offense level was 28. Neither party filed objections to the PSI.
On September 9, 1999, the district court conducted a final sentencing hearing

regarding Regueiro. Prior to that hearing, the district court had notified the
parties that it was considering imposing an upward departure on Regueiro
because her conduct had significantly disrupted a governmental function. See
U.S.S.G. 5K2.7, p.s. After listening to arguments from both sides at the
hearing, the court concluded that a four-level upward departure was warranted.
In imposing that departure, the district court cited United States v. Khan, 53
F.3d 507 (2d Cir.1995), as authority. The district court explained:
[T]he facts as they have been delineated in this case covered only a small
portion of the large scale Medicare fraud industry that [Regueiro] organized and
participated in extensively.... [T]he scheme here disrupted the government's
function to efficiently administer the Medicare program and [undermined] the
public's confidence in government.
The court also found that Regueiro had organized the fraudulent scheme, had
induced doctors and nurses to abuse their positions of trust, and had created
corporations to perpetrate and cover up the fraud. Based on all of those facts,
the district court concluded that the extent and nature of the disruption and the
importance of the government function that was affected warranted a four-level
5K2.7 departure.
II. ANALYSIS
Generally, a sentencing court must impose a sentence within a guideline range

unless it finds there exists "an aggravating or mitigating circumstance of a kind,
or to a degree, not adequately taken into consideration by the Sentencing
Commission in formulating the guidelines that should result in a sentence
different from that described." United States v. Hoffer, 129 F.3d 1196, 1200
(11th Cir.1997) (quoting 18 U.S.C. 3553(b)). Thus, to depart from the
guidelines, the sentencing court must determine (1) whether any factor makes
the case atypical, meaning that it takes the case out of the "heartland" of cases
involving the conduct described in the applicable guideline, and (2) whether
that factor should result in a different sentence. See U.S.S.G. 5K2.0 ("Presence
of any [factor that has not been given adequate consideration by the Sentencing
Commission] may warrant departure from the guidelines, under some
circumstances, in the discretion of the sentencing court."); Hoffer, 129 F.3d at
1200 (citing Koon v. United States, 518 U.S. 81, 98, 116 S.Ct. 2035, 2046-47,
135 L.Ed.2d 392 (1996)).
A sentencing court's departure decision involves both factual and legal findings.
The court determines whether a case falls outside of the heartland by assessing
the facts, and comparing them to the facts of other cases that fall within the
heartland of the applicable guideline. Hoffer, 129 F.3d at 1200. To determine if
a factor that takes a case out of the heartland should result in a different
sentence, the court must decide whether that "factor is forbidden, encouraged,
discouraged, or unaddressed by the guidelines as a potential basis for
departure." Id. If a factor is encouraged, the sentencing court is "authorized to
depart from the applicable guideline if the guideline does not already take that
factor into account." Id.
With the above framework in mind, we conclude that the district court did not
abuse its discretion in departing upward four levels pursuant to 5K2.7. See
Hoffer, 129 F.3d at 1200 (reviewing departures from otherwise applicable
sentencing guideline ranges for abuse of discretion). Regueiro was sentenced
under U.S.S.G. 2S1.1, the general money-laundering guideline. Because that
guideline does not encompass an interference with the administration of a

governmental program, we agree with the district court that Regueiro's conduct
takes this case out of the heartland of typical money laundering cases. See
United States v. Gunby, 112 F.3d 1493, 1500-01 & n. 11 (11th Cir.1997) ("
[T]he significant disruption of a governmental function is not inherent in the
offense of large-scale fraud involving an abuse of public trust...."); Khan, 53
F.3d at 518. We also agree that U.S.S.G. 5K2.7 warrants an upward departure.
Section 5K2.7 states:
10
If the defendant's conduct resulted in a significant disruption of a governmental

function, the court may increase the sentence above the authorized guideline
range to reflect the nature and extent of the disruption and the importance of
the governmental function affected.
11
U.S.S.G. 5K2.7, p.s. Regueiro's conduct significantly disrupted the

government's ability to administer its Medicare program. Every time one of the
more than 100 nursing groups that Regueiro helped organize and establish
fraudulently billed Medicare, the government lost funds that it otherwise could
have used to provide medical care to eligible Medicare patients. As the district
court explained:
12
The Medicare program was created to help provide medical care, and this
particular program, for home care services, was specifically created and
delineated so persons who were not able to receive medical care otherwise
would not be lacking for the medical care they sorely cried out for. Through the
fraudulent billing and the loss of over $15 million, those monies are no longer
available for the medical care for the persons in this program.
13
That reasoning is sound and finds support in the Second Circuit's Khan
decision. 53 F.3d 507.
14
Kahn had helped organize an extensive scheme to defraud the government's

Medicaid system out of approximately $8 million. Id. at 511. He set up four
clinics and two corporations to provide patients with drug prescriptions and to
perform medical procedures and tests that those patients did not need. The
clinics then billed Medicaid for the unnecessary prescriptions and services. Id.
at 511-12. Khan was sentenced under 2F1.1, the general fraud guideline. Id. at
517-18. The Second Circuit affirmed the district court's decision to depart
upward from that guideline on that basis of 5K2.7 because "[Khan's] scheme ...
disrupted the government's function of efficiently administering Medicaid ...
[and] undermined the public's confidence in government." Id. at 518. Although
Regueiro was sentenced under a different guideline, the same reasoning applies
here. The only difference is that Regueiro's scheme was more massive and had
a more disruptive effect than the one in Khan.
15
Regueiro's primary argument on appeal is that the caselaw concerning U.S.S.G.

5K2.7 does not support the district court's decision to depart upward. See
Gunby, 112 F.3d 1493; United States v. Baird, 109 F.3d 856 (3d Cir.1997);
United States v. Horton, 98 F.3d 313 (7th Cir.1996); United States v. Dayea, 32
F.3d 1377 (9th Cir.1994); United States v. Murillo, 902 F.2d 1169 (5th
Cir.1990); United States v. Kikumura, 918 F.2d 1084 (3d Cir.1990). To the
contrary, the cases Regueiro relies on suggest that the fraud in this case is
precisely the type that supports a 5K2.7 departure because of interference with
the day-to-day functioning of government. See, e.g., Gunby, 112 F.3d at 1503
(affirming 5K2.7 departure in case of embezzlement of court filing fees); Baird,
109 F.3d at 871-72 (affirming 5K2.7 departure in case of widespread police
misconduct); Murillo, 902 F.2d at 1174 (affirming 5K2.7 departure in case of
selling false immigration documents).
16
In contrast, the cases that Regueiro relies on in which the 5K2.7 departure was
found inappropriate involve overly attenuated effects on governmental
functions. See Dayea, 32 F.3d at 1381-82 (involuntary manslaughter resulting
in death of police officer which produced "stress" in other officers did not
warrant 5K2.7 departure); Kikumura, 918 F.2d at 1116-17 (conduct designed to
affect government policy does not constitute attempt to disrupt a governmental
function); see also Horton, 98 F.3d at 318 (eight-level upward departure
unreasonable for empty bomb threat against federal building).
17
Regueiro makes two additional arguments. First, she maintains that the district
court improperly relied on the amount of monetary loss in departing upward
even though that factor was already taken into account in her sentence. We
disagree. While the district court made repeated references to the amount of
money that the government lost to Regueiro's scheme, it did so only to stress
the scope and nature of Regueiro's fraud and the substantial affect that it had on
the Medicare program.
18
Finally, Regueiro argues that the district court's disparate treatment of her and
her codefendant Perez violates the sentencing guidelines. Specifically, she
claims that the district court's failure to consider a 5K2.7 departure for Perez
indicates that the court's decision to impose the upward departure was based on
emotion and not on the facts of her case. Regueiro also claims that this
disparate treatment violates the principle of uniformity of sentencing that
animates the guidelines. We disagree. Disparity between the sentences imposed
on codefendants is generally not an appropriate basis for relief on appeal. See

United States v. Chotas, 968 F.2d 1193, 1197-98 (11th Cir.1992) (holding that
disparate sentencing among codefendants was adequately considered by the
Sentencing Commission and is therefore not an appropriate ground for
departure). As we explained in Chotas, "to adjust the sentence of a co-defendant
in order to cure an apparently unjustified disparity between defendants in an
individual case will simply create another, wholly unwarranted disparity
between the defendant receiving the adjustment and all similar offenders in
other cases." Id. at 1198 (citations omitted).
III. CONCLUSION
19
For the reasons set forth above, we conclude that the district court did not abuse
its discretion in departing upward, and AFFIRM the sentence imposed by the
district court.
NOTES:
*
Honorable William B. Hand, U.S. District Judge for the Southern District of
Alabama, sitting by designation.
This case was originally scheduled for oral argument, but the panel has elected
to remove the case from oral argument pursuant to 11th Cir. R. 34-3(f).

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240 F.3d 1321 (11th Cir.

UNITED STATES of America, Plaintiff-Appellee,

United States Court of Appeals,

codefendant Leopoldo Perez worked as administrators for Mederi of Dade

Prior to sentencing, the Probation Office prepared a Pre-Sentencing

On September 9, 1999, the district court conducted a final sentencing hearing

Generally, a sentencing court must impose a sentence within a guideline range

guideline does not encompass an interference with the administration of a

If the defendant's conduct resulted in a significant disruption of a governmental

U.S.S.G. 5K2.7, p.s. Regueiro's conduct significantly disrupted the

Kahn had helped organize an extensive scheme to defraud the government's

Regueiro's primary argument on appeal is that the caselaw concerning U.S.S.G.

on codefendants is generally not an appropriate basis for relief on appeal. See

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