PATEL v. United States

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

:

NITA PATEL, :

: Civil Action No. 17-7485 (SDW)

Petitioner, :

:

v. : OPINION

:

UNITED STATES OF AMERICA, :

:

Respondent. :

:

APPEARANCES:

CAROLINE CINQUANTO, Esq.

Law Firm of Caroline Goldner Cinquanto

123 S. Broad Street, Suite 2500

Philadelphia, PA 19109

MARK E. CEDRONE, Esq.

JESSE DAVID ABRAMS-MORLEY, Esq.

Cedrone & Mancano, LLC

230 S. Broad Street, Suite 1100

Philadelphia, PA 19102

On behalf of Petitioner

NICOLE F. MASTROPIERI, Assistant United States Attorney

United States Attorney's Office

970 Broad Street

Newark, NJ 07102

On behalf of Respondent

WIGENTON, District Judge

Presently before the Court is Petitioner Nita Patel’s ("Ms. Patel") amended motion to vacate

sentence under 28 U.S.C. § 2255, challenging her criminal conviction and sentence upon her guilty

plea to health care fraud in violation of 18 U.S.C. §§ 1347 and 2, in Criminal Action No. 15-592.1

(ECF No. 4). Ms. Patel alleges her counsel provided ineffective assistance from pre-plea

investigation throughout sentencing. The Government filed an answer to the amended § 2255

motion (ECF No. 27), and Ms. Patel filed a reply brief (ECF No. 53). Subsequently, Ms. Patel

filed a supplemental motion for hearing (ECF No. 54), and the Government did not respond. For

the reasons set forth below, this Court will deny the amended § 2255 motion on the briefs pursuant

to Federal Rule of Civil Procedure 78(b), and deny the supplemental motion for an evidentiary

hearing.

I. BACKGROUND

Ms. Patel and her husband, Kirtish Patel ("Kirtish" or "Mr. Patel"), pled guilty to federal

health care fraud involving Medicare and private insurers, through a scheme in which they

forged physician signatures to create false diagnostic reports purportedly written by physicians

who had read and interpreted the results, and by false pretenses claiming neurological diagnostic

tests were supervised by a physician.2 (Crim. ECF No. 30 at 1). According to the stipulation in

1 Docket Entries in Criminal Action No. 15-592 are cited herein as ("Crim. ECF No."), and

docket entries in this Civil Action, No. 17-7485, are cited herein as ("Civ. ECF No.")

2 "Medicare regulations require all diagnostic testing to be 'reasonable and necessary,' as defined

under Medicare Part B. In order for diagnostic neurological testing to be 'reasonable and

necessary,' it must be performed under the proper level of physician supervision."

United States ex rel. Doe v. Heart Sol., PC, 923 F.3d 308, 311 (3d Cir. 2019) (citing 42 U.S.C. §

1395y(a)(1)(A), 42 C.F.R. § 410.32(b)(1); 42 C.F.R. § 411.15(k).) In her reply brief, Ms. Patel

maintains that her counsel failed to advise her that private insurance companies are not governed

by the Medicare regulation requiring supervision by a neurologist. Although this is not

addressed in the record, this Court notes that medical diagnostic testing is also governed by New

Jersey law:

medical screening or medical diagnostic testing (other than clinical

laboratory testing), conducted primarily for persons not receiving

medical treatment from the testing entity, is nevertheless deemed

to be a medical service. Such a practice shall be owned and under

the plea agreement, as a result of the health care offense, the Patels, through their companies,

Biosound Medical Services, Inc. ("Biosound") and Heart Solution, PC ("Heart Solution"), were

paid more than $4,386,133.75, with payments from Medicare accounting for $1,668,954.95 of

the total amount. (Crim ECF No. 30 at 9).

A. The Information

On November 17, 2015, Ms. Patel was charged by Information with defrauding Medicare

and private insurers from in or about September 2006 through in or about June 2014, in Morris

County, New Jersey, in violation of 18 U.S.C. §§ 1347 and 2.3 (Crim. ECF No. 26). The factual

the responsibility of one or more physicians each of whom holds a

plenary license from the State Board of Medical Examiners. All

such testing, irrespective of the stationary or mobile nature of the

facility, shall be performed under the authority of a designated

responsible physician who shall establish a protocol and a quality

assurance program for the specific type of screening or study.

Results of all such procedures shall be interpreted by a physician

holding a plenary license in this State, and documented in a written

report which is preserved by the physician as required by N.J.A.C.

13:35–6.5.

Allstate Ins. Co. v. Northfield Med. Ctr., P.C., No. MRS-L-3228-99, 2001 WL

34779104, at *15–16 (N.J. Super. Ct. Law Div. Apr. 27, 2001); see, e.g.,

Allstate Ins. Co. v. Schick, 328 N.J. Super. 611, 628, 746 A.2d 546, 556 (Law.

Div. 1999) (denying summary judgment where evidence suggested physician

agreements were a sham that falsely represented compliance with state

regulations). Thus, private insurance companies in New Jersey have an

expectation that diagnostic testing was performed in accordance with the law.

Notwithstanding, Ms. Patel knowingly and voluntarily pled to the factual basis, as

outlined on the record and under oath.

3 18 U.S.C. § 1347(a), (b) provides:

Whoever knowingly and willfully executes, or attempts to execute,

a scheme or artifice--

(1) to defraud any health care benefit program; or

allegations in the Information are summarized as follows. Ms. Patel owned the business Heart

Solution, and her husband owned Biosound. The Patels jointly operated both businesses and

neither of them was a physician. Both businesses offered mobile diagnostic testing services that

were conducted on-site at a physician's office. Biosound was a Medicare-approved provider

since 1999, and Heart Solution was a Medicare-approved provider since 2011.

Private insurance companies and Medicare reimbursed Biosound for the performance and

interpretation of tests ordered by a patient's primary care physician for diagnosis and treatment

including: 1) echocardiograms to diagnose heart conditions; 2) chest, abdominal and lower leg

ultrasounds to detect blood clots and abdominal aortic aneurysms; and 3) carotid ultrasounds to

detect the risk of stroke. To receive reimbursement for these services, Medicare required

Biosound to have a licensed subspecialist physician on staff to supervise and interpret any test

performed in a particular subspecialty. Biosound purported to comply by Kirtish Patel travelling

(2) to obtain, by means of false or fraudulent pretenses,

representations, or promises, any of the money or property owned

by, or under the custody or control of, any health care benefit

program, in connection with the delivery of or payment for health

care benefits, items, or services, shall be fined under this title or

imprisoned not more than 10 years, or both. If the violation results

in serious bodily injury (as defined in section 1365 of this title),

such person shall be fined under this title or imprisoned not more

than 20 years, or both; and if the violation results in death, such

person shall be fined under this title, or imprisoned for any term of

years or for life, or both.

(b) With respect to violations of this section, a person need not

have actual knowledge of this section or specific intent to commit

a violation of this section.

18 U.S.C. § 2(a) states, "[w]hoever commits an offense against the United States or aids, abets,

counsels, commands, induces or procures its commission, is punishable as a principal."

with the testing equipment to the referring physician's office to perform the tests, and then he

would send the results to a specialist physician (the "Reading Doctor") to interpret the results and

author and sign a diagnostic report.

Beginning at least as early as October 2008, the Patels stopped transmitting the test

results to a Reading Doctor. Instead, Mr. Patel, with no medical license, wrote the diagnostic

reports, and Ms. Patel copied and pasted physicians' signatures on the diagnostic reports from

Biosound's office. The diagnostic reports were returned to the referring physicians, who made

treatment decisions for their patients. The Patels forged Reading Doctors' signatures on more

than half of the diagnostic reports produced by Biosound in the relevant period, without the

knowledge of those doctors whose names were misappropriated. Biosound employees became

aware of this scheme.

Beginning in or around September 2006, Mr. Patel represented to Medicare that

Biosound would begin performing neurological diagnostic tests, which would be supervised by a

physician as required by Medicare. Based on this false representation, Biosound became a

Medicare-approved provider of neurological diagnostic testing. "From in or around September

2006 through June 2014, none of the neurological testing performed by Biosound was supervised

by the neurologist that Kirtish N. Patel indicated to Medicare was supervising Biosound's

neurological testing." (Crim. ECF No. 26 at 6).

By way of this scheme to defraud, the Patels were paid more than $4,386,183.75 by

Medicare and private insurance companies. The Information also called for forfeiture, pursuant

to 18 U.S.C. § 982(a)(7), of all property derived from gross proceeds traceable to the

commission of the offense, for which the Patels are jointly and severally liable.

B. The Plea Agreement

On August 20, 2015, Ms. Patel entered into a written plea agreement with the

Government. (Crim. ECF No. 30). Pursuant to the plea agreement, Ms. Patel pleaded guilty to

the Information described above. In exchange for Ms. Patel’s guilty plea, the Government

agreed not to initiate any further criminal charges against her for forging physician signatures or

obtaining health care benefits under false pretenses for the period from September 2006 through

June 2014. The plea agreement stated that: (1) the statutory maximum term of imprisonment

was ten years; (2) the statutory maximum fine was the greatest of $250,000, or twice the gross

amount of any pecuniary gain that any persons derived from the offense, or twice the gross

amount of any pecuniary loss sustained by any victims of the offense; (3) in addition to any fine,

the sentencing court must order forfeiture pursuant to 18 U.S.C. § 981(a)(1)(c) and 28 U.S.C. §

2461; and (4) may order restitution. The Government did not make any promise as to the

Sentencing Guidelines range or the ultimate sentence. As to forfeiture and restitution, the parties

agreed it would be equivalent to the amount of the loss involved in the criminal conduct pursuant

to U.S.S.G. § 2B1.1(b)(1), as determined by the sentencing judge.

Ms. Patel agreed with the Government, but reserved argument before the sentencing

judge as to the loss amount, that the Patels were paid more than $4,386,133.75 by Medicare and

the insurance company victims of the scheme to defraud. This stipulation did not bind the

sentencing judge, and it did not bind the Government to the extent that the Government obtained,

prior to sentencing, any conflicting credible, material information on losses. Ms. Patel

acknowledged in writing that she discussed the plea agreement with her attorney. She further

acknowledged that she read the plea agreement and wanted to plead guilty. The written plea

agreement precluded Ms. Patel from obtaining the benefits of the agreement in the event that:

a guilty plea in this matter is not entered for any reason or the

judgment of conviction entered as a result of this guilty plea does

not remain in full force and effect, NITA PATEL agrees that any

dismissed charges that are not time-barred by the applicable statute

of limitations on the date this agreement is signed by NITA

PATEL may be commenced against her, notwithstanding the

expiration of the limitations period after NITA PATEL signs the

agreement.

C. The Plea Hearing

On November 17, 2015, Ms. Patel entered a guilty plea before the late Honorable

William H. Walls, U.S. District Judge. (Crim. ECF No. 31). At her plea hearing, Ms. Patel was

accompanied by her attorney, Frank Arleo, Esq. ("Arleo"), and an interpreter. (Id. at 3). Judge

Walls stated, "if I say anything that does not accord with your understanding, please let me

know." (Id. at 10). Ms. Patel confirmed that (1) she had no obligation to plead guilty; (2) she

understood her right to have the matter referred to a grand jury, and, if indicted, she had the right

to a jury trial, with a presumption of innocence; (3) her attorney had negotiated the plea

agreement with her knowledge and consent; (4) she understood she could receive up to a 10-year

prison sentence; (5) she waived her right to a jury trial and retained only a limited right to appeal

the sentence; and (6) she would be required to pay restitution and was exposed to a forfeiture

order. (Id. at 5-6, 8-10). Judge Walls explained the sentencing procedure:

Whatever sentence that you will get, Mrs. Patel, will be up to me,

and it will be my exercise of my discretion to give you a

reasonable sentence. To do so, I'll listen to what Mr. Arleo, your

attorney, may say on your behalf. I'll listen to whatever you may

wish to say. I'll listen to whatever the Assistant United States

Attorney may wish to say. I shall read a presentence investigation

report by the Probation Department….

(Crim. ECF No. 31 at 10-11).

Ms. Patel agreed to have a forfeiture money judgment entered against her, equal to all

property and money that she obtained directly or indirectly from gross proceeds traceable to the

crimes to which she pleaded guilty, equal to the loss amount involved with the criminal conduct.

(Crim. ECF No. 31 at 12). If Ms. Patel and the Government could not agree as to that amount, it

would be determined by the sentencing judge. (Id.) Judge Walls further advised Ms. Patel, and

she confirmed that:

This agreement is only between you and this United States

Attorney for this District of New Jersey. It is not binding on any

Federal, local, or state law enforcement agency, nor is it binding

upon any civil authorities or any third party from bringing any

administrative or civil actions against you.

(Id. at 17). She understood that she had a right to bring a collateral attack based on ineffective

assistance of counsel, but she was satisfied with Mr. Arleo's representation up to that point. (Id.)

No one had threatened her or made any promises to induce her to accept the guilty plea. (Id. at

18).

Judge Walls went over the stipulations in the plea agreement with Ms. Patel to determine

that she understood. Ms. Patel understood that she stipulated to receiving more than

$4,386,133.75 from Medicare and private insurance companies for false diagnostic reports that

were purportedly written by actual physicians, and neurological diagnostic reports for which

there was no supervising physician. (Id. at 18-19). The amount the Patels received from other

unnamed payors would be calculated later in the same manner. (Id. at 19).

To provide a factual basis for the plea, Ms. Patel answered as follows:

THE COURT: . . . We are talking about the period of 2006 to

2014, Mrs. Patel. At that time, and during that time, did you and

your husband own and operate mobile diagnostic companies

known as Biosound Medical Services and Heart Solution PC?

THE DEFENDANT: Yes.

THE COURT: Where were they located?

THE DEFENDANT: (In English) Parsippany.

THE COURT: And during that time in Parsippany,

did those two companies provide diagnostic testing services

to Medicare patients?

THE DEFENDANT: (In English) Yes.

THE COURT: And did you bill Medicare for those testing services

that you claimed to have provided?

THE DEFENDANT: (In English) Yes.

THE COURT: And did part of that diagnostic work

that you purported to provide include having licensed

specialist physicians review and interpret the diagnostic

values that were recorded by a diagnostic technician such as

yourself and your husband?

THE DEFENDANT: Yes.

THE COURT: And during that time, did you know

that the doctors who ordered the diagnostic services relied

upon those reports, which they believed were prepared by

licensed specialist physicians, in order to make important

treatment decisions for their patients?

THE DEFENDANT: Yes.

THE COURT: And during this period of between

October 2008 to June 2014, did you and your husband decide

without his having any medical license that he would

write many of the diagnostic reports that were supposed to

be written by a licensed specialist physician?

THE DEFENDANT: (In English) Yes.

THE COURT: And when your husband so fraudulently interpreted

and wrote a diagnostic report, did you then attach a forged

specialist physician's signature to that report to make it appear that

an actual physician had authored the report?

THE DEFENDANT: (In English) Yes.

THE COURT: And were these forged diagnostic

reports intended to assess a person's or patient's risk of

serious medical condition, such as blood clots, health

defects, abdominal aortic aneurysms, and stroke?

THE DEFENDANT: Yes.

THE COURT: Did you know what you were doing at

this time?

THE DEFENDANT: (In English) Yes.

THE COURT: And did you do so willingly and

knowingly? (Off the record discussion between the Defendant and

defense counsel)

THE DEFENDANT: Yes.

THE COURT: All right. Now, during this period of

2006 through 2008, did you and your husband falsely --

MS. WALSMAN: You just said the wrong year, Your

Honor. 2006 through 2014.

THE COURT: Did you and your husband falsely

represent to Medicare that the neurological testing being

performed at Biosound Medical Services was being supervised

by a licensed neurologist, when, in fact, it was not?

THE DEFENDANT: Yes.

THE COURT: Were your companies, Biosound Medical

Services and Heart Solution, PC, paid more than

$4,386,133.75 by Medicare and private insurance companies

for claims submitted for diagnostic testing and reports that

were never interpreted by a licensed physician and for

neurological diagnostic testing that was never supervised by

a licensed neurologist?

THE DEFENDANT: Yes.

THE COURT: And were your companies, Biosound

Medical Services and Heart Solution, PC, paid at least

$1,668,954.95 by Medicare for claims submitted for

diagnostic testing and reports that were never interpreted

by a licensed physician and diagnostic neurological testing

that was never supervised by a licensed neurologist?

THE DEFENDANT: Yes.

THE COURT: And did you know that what you and

your husband were doing by submitting these claims to

Medicare was illegal?

THE DEFENDANT: (In English) Yes.

THE COURT: And are you pleading today to this

charge because, in fact, you are guilty of the charge?

THE DEFENDANT: (In English) Yes.

THE COURT: Are you satisfied, Mr. Arleo?

MR. ARLEO: I am, Your Honor.

THE COURT: Ms. Walsman?

MS. WALSMAN: Yes, Your Honor.

THE COURT: Have you signed the application to

enter a plea of guilt and waiver of indictment in this

matter, Mrs. Patel?

THE DEFENDANT: Yes.

THE COURT: Before you signed these documents, did

you read them?

THE DEFENDANT: Yes.

THE COURT: Do you understand them?

THE DEFENDANT: Yes.

THE COURT: Do you have any questions that you

wanted answered by Mr. Arleo that he has not answered?

THE DEFENDANT: (In English) No.

THE COURT: Do you have any questions of anything

that you want to ask me?

THE DEFENDANT: (In English) No.

THE COURT: All right. I'll accept your plea. . . .

(Crim. ECF No. 31 at 22-26).

D. The PSR

The U.S. Probation Department prepared Ms. Patel’s presentence report (“PSR”).

According to the PSR, pursuant to 18 U.S.C. § 3664(d)(1), the government consulted with all

identified victims and provided the Probation Office with a listing of the amounts subject to

restitution. (PSR, ¶ 39). In this regard, the PSR contained a list of insurance company victims

including "Payor Group A" reporting a total loss of $4,386,175.75 (Id., ¶ 32), and "Payor Group

B" reporting a total loss of $417,741.65. (Id., ¶ 33). Each of the 23 insurance companies,

including Medicare, confirmed their losses and provided contact information. (Id., ¶¶ 40, 41).

Regarding the cardiology reports (exclusive of echocardiograms), the Government

learned that not all of the reports were false. (Id., ¶ 32). The Government subpoenaed

Biosound's 2012-2014 cardiology reports from the referring doctors, and then compared them

against records from the Reading Doctors, who had identified the reports they had actually

reviewed and authored. (Id.) From this review by the Government, it was reasonably

determined that 75% of the records reviewed were false reports with forged doctor signatures.

(Id.) The Probation Office adopted this calculation and added 75% of the insurance companies'

payments for cardiology tests to the payments for the neurological tests, arriving at the total loss

for each victim. (Id.)

The Probation Office calculated the offense level using the November 1, 2015 Guidelines

Manual.4 (PSR, ¶ 28). U.S.S.G. § 2B1.1 is the relevant Guideline for loss calculations under 18

U.S.C. § 1347. Under Application Note 1 to § 2B1.1, "Federal health care offense” includes

offenses against private insurance plans and "Government health care program" includes

Medicare.

Application Note 3 governs "Loss Under Subsection (b)(1)," and provides, in relevant

part:

(A) General Rule.—Subject to the exclusions in subdivision (D),

loss is the greater of actual loss or intended loss.

(i) Actual Loss.—“Actual loss” means the reasonably

foreseeable pecuniary harm that resulted from the offense.

. . .

(C) Estimation of Loss.—The court need only make a reasonable

estimate of the loss. The sentencing judge is in a unique position to

assess the evidence and estimate the loss based upon that evidence.

For this reason, the court’s loss determination is entitled to

appropriate deference. See 18 U.S.C. § 3742(e) and (f).

The estimate of the loss shall be based on available information….

(E) Credits Against Loss.—Loss shall be reduced by the following:

(i) . . . the services rendered, by the defendant or other

persons acting jointly with the defendant, to the victim

before the offense was detected.

. . .

(F) Special Rules.—Notwithstanding subdivision (A), the

following special rules shall be used to assist in determining loss in

the cases indicated: . . .

(v) Certain Other Unlawful Misrepresentation Schemes.—

In a case involving a scheme in which services were

fraudulently rendered to the victim by persons falsely

posing as licensed professionals; . . . loss shall include the

4 Available at https://www.ussc.gov/guidelines/guidelines-archive/2015-guidelines-manual.

amount paid for the property, services or goods transferred,

rendered, or misrepresented, with no credit provided for the

value of those items or services.

With this background, the Probation Office started with a base offense level of 6,

pursuant to § 2B1.1. (PSR, ¶ 50). The base offense level was increased by 18 points because

the loss was at least $4,386,133.75. (PSR, ¶ 50). Two points were added, pursuant to §

2B1.1(b)(2)(A) for 10 or more victims. (Id., ¶ 51). Two points were added pursuant to §

2B1.1(b)(7)(A)(B)(i), because the offense was against Medicare, and the loss to Medicare was

more than $1,000,000. (Id., ¶ 53). Two more points were added pursuant to § 2B1.1(b)(15)(A),

because the offense involved the conscious or reckless risk of death or serious bodily injury.

(Id., ¶ 54). This resulted in an offense level of 30. (Id., ¶ 58). Three points were deducted for

acceptance of responsibility, pursuant to § 3E1.1(a), (b). (Id., ¶¶ 60, 61). This brought the total

offense level to 27. (Id., ¶ 62).

In determining the loss amount of $4,386,133.75, the Probation Office applied

Application Note 3(F)(v) to § 2B1.1, because the Patels represented to the insurance companies

that the diagnostic reports were reviewed and authored by appropriately licensed physicians, but

Kirtish Patel reviewed and authored the reports himself, and he was not a physician. (Id., ¶ 32.)

Application Note 3(F)(v) does not permit credit against the loss amount for the value of the

services provided by defendants who falsely pose as licensed professionals. (Id.)

Ms. Patel was interviewed by the Probation Office, and the PSR describes her

employment record, without specifying the dates:

Nita Patel had been employed as the manager of Biosound Medical

Services and owned Heart Solution[], both collectively located in

Parsippany, New Jersey, and performing the same services. She

reported earning a gross monthly salary of $3,750.

(Id., ¶ 87).

E. Ms. Patel's Sentencing Memorandum

In Ms. Patel's sentencing memorandum, Mr. Arleo challenged the Government's position

that she should not receive the three offense level reduction for acceptance of responsibility.

(Civ. ECF No. 27 at 189-92). He explained that in a related civil action under the False Claims

Act, Ms. Patel had argued that in 2006-2007, her husband paid Brad Tinkelman M.D. to serve as

a neurological supervisor for Biosound. (Civ. ECF No. 27 at 191.) Admittedly, Dr. Tinkelman

received no money after 2007, and her husband hired a new neurological supervisor in 2012.

(Id.) Mr. Arleo argued this was not inconsistent with Ms. Patel's guilty plea because she

admitted that Biosound did not have neurological supervision for some time between 2008 and

2014. (Id.)

Further, Mr. Arleo asserted that Ms. Patel was not the owner of Biosound. (Id.) Thus,

she had no legal obligation to comply with Medicare regulations that required Biosound to have

a neurological supervisor. (Id.) She was merely an employee of Biosound, who had returned to

employment after her children were grown. (Id.) Mr. Arleo posited that Ms. Patel should not be

punished for the Government's sloppy drafting of factual basis questions for her plea hearing,

where she was "lumped together with Kirtish" and held responsible for fraud by Biosound from

2006 through 2014. (Id. at 192). He submitted that Ms. Patel never wavered from taking

responsibility for forging signatures on diagnostic tests without having a Reading Doctor

interpret the results. (Id.) Throughout the plea negotiations, the defense had always asserted that

Biosound paid Dr. Tinkelman as a neurological supervisor for some period of time. (Id.) Ms.

Patel only agreed to provide the factual basis for her plea because her attorney advised her that

the neurological supervision they allegedly provided for Biosound's performance of diagnostic

neurological tests probably did not satisfy Medicare's requirements. (Id.)

Mr. Arleo challenged the loss calculation submitted by the Government and Probation

Office, arguing they had conflated the conduct of Ms. Patel with her husband, instead of making

individual determinations of responsibility. (Id. at 193-95). Kirtish Patel owned Biosound,

while Nita Patel owned Heart Solution. (Id. at 195). The facilities operated as separate entities

and were situated in different locations. (Civ. ECF No. 27 at 195). As the owner and operator of

Biosound, Kirtish Patel was responsible for ensuring that the tests performed at his facility were

conducted with the appropriate level of supervision. (Id.) This case did not involve any

unsupervised diagnostic testing at Heart Solution, owned by Ms. Patel. (Id.) Even assuming Ms.

Patel was aware of the lack of supervision over the neurological testing by Biosound, she played

no role in the management of that facility. (Id.) The loss attributable to the unsupervised

neurological testing at Biosound, $2,265,196.00, should be subtracted from the loss figure used

to calculate Ms. Patel's offense level. (Id.)

Mr. Arleo sought further reduction from Ms. Patel's total loss amount by way of credit for

the services Biosound and Heart Solution provided to Medicare and the private insurance

companies. (Id. at 196). He explained that the companies provided the diagnostic tests and

preliminary reports, but they failed to have physicians read the results and interpret the results.

(Id.) The customary fee for a "Reading Doctor" was $25.00 per report. (Id.) Adding these fees

for each report resulted in a total loss under $100,000. (Id.) This would reduce the offense level

by 10 points. (Id.)

In addition to challenging the Government's and Probation Office's loss calculations, Mr.

Arleo also sought a downward departure based on: (1) Ms. Patel's lack of a management role in

the administration of Biosound’s services, (2) the lack of any actual or intended physical harm

resulting from her criminal conduct; (3) the unlikelihood she would recidivate; and (4) due to her

serious health issue. (Id. at 196-98). Under the 18 U.S.C. § 3553 sentencing factors, Mr. Arleo

argued that Ms. Patel was otherwise a good, charitable person, and none of the patients were

harmed by the scheme to defraud. (Id. at 199-204).

F. Ms. Patel's Sentencing Hearing

At Ms. Patel's sentencing hearing on August 16, 2016, Mr. Arleo challenged the

recommended offense level of 27 in the PSR. (Civ. ECF No. 27 at 66-69). The parties disputed

whether there should be an 18 point increase based on the loss amount. (Id. at 67-69). Although

Ms. Patel had stipulated with the Government that Biosound and Heart Solution received

$1,668,954.95 from Medicare as a result of the scheme to defraud, this was not a binding

stipulation of the loss amount at sentencing. (Id. at 69).

Mr. Arleo explained that the roughly $4.3 million loss stipulation was split more or less

evenly between two types of conduct, the Reading Doctor forgeries and the lack of appropriate

supervision of neurological diagnostic tests by Biosound. (Id. at 70). Mr. Arleo contended Ms.

Patel was not responsible for a neurologist's supervision over Biosound's neurological testing

because she was not the owner. (Id.) If the Court accepted this argument, it would cut in half

the roughly $4.3 million loss stipulated by the parties in the plea agreement, and reduce the

offense level by two points. (Id. at 70-71.) The Government's position was that Ms. Patel was

nonetheless responsible because the Patels were husband and wife, and she was an employee of

Biosound. (Id.) Mr. Arleo contended this was not relevant—and she had no legal obligation to

assure proper supervision over diagnostic testing. (Id. at 71-73).

Mr. Arleo also challenged the forgery portion of the total loss amount. (Id. at 73). All

diagnostic tests were performed and preliminary reports were prepared. (Id. at 74). What was

lacking was review and interpretation by appropriately licensed physicians. (Id.) Biosound and

Heart Solution typically paid $25 per test to the Reading Doctors. (Id.) Thus, the loss to the

insurance companies was the portion that would have been paid to the Reading Doctors. (Id.)

Judge Walls, however, responded:

I could care less whether the work was physically done. The result

was fraudulent. Fraudulently induced. And here you take a test

which involves serious matters, such as ultrasounds and other tests

which determine whether people are suffering from serious

illnesses, not just a cough, and it's sent supposedly to a reading

physician but, in fact, it's not…. are you saying you are going to

try to apportion this?

(Civ. ECF No. 27 at 76). Mr. Arleo stood firm, noting that no one suffered death or injury. (Id.)

Judge Walls corrected him by adding "that we know of." (Id.) Mr. Arleo explained that when

Ms. Patel was interviewed by the FBI, she indicated that approximately 5,000 tests were

performed over the relevant period of time. (Id. at 78-79.) The Patels cooperated in mitigating

any potential harm by providing the Government with a list of all the patients affected by the

reports, so that the patients could be alerted and seek retesting. (Id.) No harm was discovered.

Next, Mr. Arleo addressed the Government's objection to a three offense level deduction

for acceptance of responsibility, based on Ms. Patel's attempt, in a related civil case, to contest

her liability for conduct to which she had pleaded guilty. (Id. at 79). Mr. Arleo explained that in

Mr. Patel's proffer statement to the FBI, he claimed to have hired Dr. Brad Tinkelman, through

an intermediary, Rob Lavin, as Biosound's neurological supervisor. (Id. at 81-82). Mr. Patel

sent Lavin a check to pay Dr. Tinkelman. (Id. at 82). One year later, the defense was unable to

obtain a copy of the check from the bank. (Id.) The Government had questioned Dr. Tinkelman,

who denied knowing anything about the Patels. (Id. at 82-83). The defense was unable to find

Dr. Tinkelman. (Id.) Nonetheless, prior to the plea hearings, Mr. Arleo told the Government

that the Patels would not agree that they had never hired a neurological supervisor for Biosound.

(Id. at 83). Thus, the Government changed the factual basis question to allow the Patels to plead

consistent with their claim that they hired Dr. Tinkelman as a neurological supervisor, but that

Dr. Tinkelman did not provide the supervision required by Medicare regulations. (Civ. ECF No.

27 at 83-84). The Patels accepted the revised question for the plea hearing on the advice of their

attorneys. (Id. at 86-87).

Mr. Arleo also sought a downward departure at the sentencing hearing. He submitted

that Ms. Patel took responsibility for her role in the forgeries. (Id. at 92). However, her offense

level overrepresented her role in Biosound because she was only a "worker bee," who was not

responsible for hiring a supervisor. (Id. at 93-96). Mr. Arleo also sought a downward departure

based on Ms. Patel's illness and the Bureau of Prison's inability to provide adequate medical care.

(Id. at 96-100). He further addressed the sentencing factors under 18 U.S.C. § 3553, arguing that

no one died or was injured as a result of the fraud. (Id. at 100). However, Judge Walls

expressed his view that the Patels deliberately and callously risked misdiagnosing patients,

which could have resulted in death. (Id. at 101). Mr. Arleo contended the Patels had already

accepted responsibility for the risk of death or injury by stipulating to a 2-point increase in the

offense level. (Id. at 102.) Ms. Patel was a good person who made a mistake and deserved

leniency. (Id. at 102-3). Judge Walls disagreed because the fraudulent scheme lasted for years.

(Id. at 103).

The Government contested Mr. Arleo's claim that $2.2 million of the total loss was based

solely on having no supervision for neurological testing because there were forged Reading

Doctor signatures on neurological reports as well. (Id. at 106). The Government did not go

through the neurological tests one by one to determine which contained forged physician

signatures because none of the neurological tests were supervised by a neurologist, thus all were

part of the scheme to defraud. (Id. at 106-7). For the cardiology tests, which were not subject to

the supervising neurologist regulation, the Government subpoenaed the referring physicians for

all cardiology diagnostic reports from Biosound in 2012 through June 2014. (Id. at 107). The

Government asked each physician whose name was forged to identify which reports they had

actually reviewed for Biosound and Heart Solution, and compared the difference from the total

tests and those that were properly read by a physician. (Crim. ECF No. 27 at 107). This is how

the Government determined that 75% of the cardiology reports, exclusive of the

echocardiograms, were forged. (Id. at 107-8).

The Government, however, also spoke with neurologists whose signatures appeared on

the neurology reports. (Id. at 108). Several neurologists confirmed they had stopped reading

reports for Biosound, but their names continued to appear on scores of reports. (Id. at 108). On

the day of her arrest, Ms. Patel estimated there were approximately 5,000 fraudulent tests at

issue, but when the Government subpoenaed the referring doctors they received 14,000 tests.

(Id. at 114-15). Holding Ms. Patel responsible for losses from only 10,500 tests was a

conservative estimate, the Government claimed, because they did not subpoena every doctor

whose name was forged by the Patels after the doctor stopped reading tests for them. (Id. at

115).

In opposition to the departure motion, the Government argued that patients who

potentially had serious illnesses were put at risk, and therefore, the offense level could not

overrepresent the conduct. (Id. at 113-15). The Government asked for an upper Guidelines

range sentence, without a deduction for acceptance of responsibility. (Id. at 118).

Judge Walls adopted the offense level calculation from the PSR and awarded the three

level reduction for acceptance of responsibility. (Id. at 121-23). He determined the loss amount

was the stipulated amount in the plea agreement, and added $417,000, which the Government

subsequently discovered was paid by another group of insurance companies. (Id. at 124-25). Per

the plea agreement, the loss amount would also dictate the forfeiture and restitution. (Id.) Judge

Walls found a total loss of $4,803.875.40, and the same amount for restitution, and he waived a

fine. (Civ. ECF No. 27 at 110-13, 121-28). Judgment was entered on August 16, 2016. (Crim.

ECF No. 39). Ms. Patel was (1) sentenced to a 78-month term of imprisonment; (2) ordered to

pay a $100 special assessment; (3) ordered to surrender to the Bureau of Prisons on October 17,

2016; (4) ordered to serve a three-year term of supervised release; (5) ordered to make

restitution in the total amount of $4,803,875.40; and (6) subjected to an order of forfeiture for a

sum of money equal to $4,803,875.40. (Crim. ECF No. 39). An Amended Judgment, which

corrected a clerical error in the restitution amount by adding one cent, for a total of

$4,803,875.41, was entered on the docket on September 13, 2016. (Crim. ECF No. 41). Ms.

Patel filed her § 2255 motion on September 26, 2017, and later amended. She was subsequently

released to home confinement under the First Step Act. (ECF No. 27 at 9).

G. The § 2255 Motion

In her pro se memorandum in support of her amended § 2255 motion, Ms. Patel asserts

her counsel provided constitutionally ineffective assistance in virtually every respect; and she

would have been better off if she had gone to trial or pleaded open and reserved all rights to

appeal. (Civ. ECF No. 4-1). Her dissatisfaction with counsel, after accepting the plea

agreement, arose out of two unexpected outcomes. The Government intervened in a qui tam

civil action under the False Claims Act, which was based, in part, on the same misconduct to

which she had pleaded guilty. (Id., ¶¶ 66-69, 104). The civil trial judge held that she was

estopped from arguing positions that were contrary to the factual stipulations in her guilty plea.

(Id.) Thus, she could not argue for a lower damage amount in the civil action, and with treble

damages under the False Claims Act, she was found liable for more than $7,000,000. (Id.)

Second, her counsel failed to convince the sentencing judge to impose a lower loss amount than

recommended in the PSR, and she alleges that her counsel conflated the loss amount with

restitution/forfeiture. (Id., ¶¶ 100, 101, 130).

Ms. Patel asserts that her counsel: 1) failed to conduct a proper pre-plea investigation

and secure a more favorable plea deal; 2) failed to explain the pitfalls of joint representation; 3)

made misstatements of fact regarding the provisions of the plea agreement; 4) failed to object at

the plea hearing; 5) performed deficiently at sentencing; and 6) allowed the Government to

violate the terms of the plea agreement. More specifically, Ms. Patel claims her counsel failed to

establish that

• she was not responsible for any losses based on her husband's failure to have proper

supervision over Biosound's neurological tests; her husband told her that Biosound was in

compliance with Medicare regulations from 2007-2012, with Dr. Tinkelman as the

supervisor (Civ. ECF No. 4-1, ¶ 36(e))

• she was not employed by Biosound from 1999-2010, she was a stay at home mom (Id.,

¶¶ 23-24)

• the plea agreement does not contain a stipulation that she engaged in the charged conduct

between the years 2006-2014 (Id., ¶ 106)

• She only became involved in the charged scheme in 2012, when she received a phone call

from a referring physician (Id., ¶¶ 29, 30, 48)

• The only heart tests done were echocardiograms, and all were read by a physician. (Id., ¶

38)

• Every vascular test that showed an abnormality was sent to be read by a licensed

physician (Id., ¶¶ 40, 41)

• Every neurological balance test was sent to a Reading Doctor (Id., ¶ 43)

• The Government's conclusion that 75% of the diagnostic reports contained forged

physician signatures was incorrect because all echocardiograms and neurological balance

tests were sent to Reading Doctors (Id., ¶¶ 128, 133)

• Mr. Arleo conflated the restitution and loss Guideline and made her believe a lower loss

would be assigned at sentencing (Id., ¶ 130)

• Her loss amount should have been calculated under U.S.S.G.¶¶ 1B1.3 and 2F1.1 (Id., ¶

93)5

• Mr. Arleo failed to seek a downward departure or lower sentence based on health and

other factors (Id., ¶¶ 158-75)

• The Government breached the plea agreement by obtaining second forfeiture order (Id.,

¶¶ 148-49)

• Her plea was involuntary because she did not know the Government could seek a second

forfeiture (Id., ¶¶ 153-55)

• She would not have accepted the plea offer if she had known the civil action would be

filed the next day (Id., ¶ 157)

H. The Answer

The Government contends that Ms. Patel's § 2255 motion is barred by the one-year

statute of limitations because it was filed more than one year after the judgment was entered.

(Civ. ECF No. 27 at 10). According to the Government, Ms. Patel's filing within one-year of

entry of the amended judgment, which was amended due to a clerical mistake, was untimely.

(Id.)

In opposition to Ms. Patel's ineffective assistance of counsel claims, the Government

presented the affidavit of Frank P. Arleo, Esq. and attached exhibits. Mr. Arleo states that: 1)

he and Attorney Fusco, Mr. Patel's attorney, met with the Patels on June 12, 2014 to discuss joint

5 This allegation is meritless. U.S.S.G. § 2B1.1 governs losses for federal health care fraud.

United States v. Opitz, 704 F. App'x 66, 69 n.7 (3d Cir. 2017).

representation; 2) he explained the joint representation agreement to Ms. Patel; 3) she expressly

waived the right to assert conflict of interest; and 4) she never asked to withdraw from joint

representation. (Civ. ECF No. 27 at 136-37, ¶ 5). To investigate Ms. Patel's defense, Mr. Arleo

unsuccessfully attempted to find Dr. Tinkelman. Based on Mr. Arleo's research, Dr. Tinkelman's

testimony would not have mitigated the criminal offense because his involvement, as described

by the Patels, did not qualify him as a supervising physician under the Medicare guidelines. (Id.

at 137, ¶ 6(a)). Mr. Arleo and his law clerk spent forty hours researching the loss amount and

other issues. (Id. at 137, ¶ 6(c)). Mr. Arleo reviewed the Government's back-up data for its loss

calculation, and the Government did not include echocardiogram tests in the losses. (Id. at 138,

¶6(c)).

Mr. Arleo engaged in plea negotiations over the course of eighteen months. (Civ. ECF

No. 27 at 138, ¶ 7). The Government did not agree that Ms. Patel was less culpable than her

husband and would only offer Mr. and Ms. Patel the same plea agreement. (Id., ¶ 7(a)). During

plea negotiations, in July 2015, the Government informally stated that it would accept a guilty

plea to conspiracy to commit health care fraud, but if the case went to trial, it would pursue other

criminal charges, including money laundering. (Id. at 139, ¶ 10). Mr. Arleo discussed the

informal plea with Ms. Patel. (Id.) He described the strengths and weaknesses of the

Government's case, and Ms. Patel's sentencing exposure with the plea or without a plea. (Id.)

He advised her of her absolute right to go to trial. (Id.)

During plea negotiations, Mr. Arleo challenged the Government's loss calculation and

proposed an alternative, but it was rejected. (Id. at 138, ¶ 7(b)). In August 2015, Ms. Patel

rejected a proposed plea agreement that included a binding stipulated loss amount. (Id., ¶ 7(c),

(d)). Then, Mr. Arleo secured a plea offer that allowed the sentencing judge to determine the

loss amount after hearing the parties' arguments. (Id. at 139, ¶ 7(e)). The Government made

only two formal plea offers, and Mr. Arleo explained both to Ms. Patel and made sure that she

understood. (Id., ¶¶ 8, 9). He was satisfied that Ms. Patel understood the plea agreement that

she ultimately accepted. (Id. at 140, ¶ 11, 12). He met with Ms. Patel to go over the factual basis

questions proposed by the Government in advance of the plea hearing. (Id., ¶ 13).

After the Court accepted Ms. Patel's guilty plea, Mr. Arleo met with her twice to discuss

the presentence report and to prepare for sentencing. (Id., ¶ 14). He advised Ms. Patel that the

Government was going to argue that she should not get a three-point reduction in the base

offense level for acceptance of responsibility, because she had taken an inconsistent position in a

related civil case. (Id.) Mr. Arleo advised Ms. Patel of the pros and cons of the legal position

she took in the civil case, and its effect on her criminal case. (Civ. ECF No. 27 at 140, ¶ 14). He

confirmed in writing that Ms. Patel had chosen to accept responsibility for her wrongful conduct

in the criminal case, despite any consequences to her civil action. (Id., ¶ 15). Ms. Patel never

requested an interpreter for any of their consultations. (Id. at 141, ¶ 17).

I. Reply Brief

In her reply brief, Ms. Patel contends that her § 2255 petition was timely, and that even if

it was not, she should be entitled to equitable tolling based on her serious medical condition, and

her need to rely on her children as English interpreters. (Civ. ECF No. 53 at 2-7). She described

the gravamen of her petition was that Mr. Arleo erred in advising her to stipulate to the gross

amount the Patels received under the scheme to defraud, without investigating, verifying or

challenging that amount before she signed the plea agreement, and that he incorrectly advised her

she could challenge the loss amount later. (Id. at 7-8). She also contends that Mr. Arleo made no

effort to distinguish between Medicare's requirement for a neurologist to supervise neurological

testing, and the requirements of private insurance companies. (Id. at 8). Further, she argues that

once Mr. Arleo had the PSR and the documents supporting the Government's loss calculation, he

should have used those records to challenge the loss amount. (Id.) Finally, she asserts that Mr.

Arleo failed to support the loss theory at sentencing by establishing there were legitimate services

provided by Biosound and Heart Solution. (Id. at 9). But for these errors by counsel, Ms. Patel

submits that she would have gone to trial or pleaded open to preserve her appellate rights and retain

her ability to challenge damages in a civil action. Ms. Patel also requests a hearing to determine

whether the Government withheld or destroyed a document identified as "Proper Loss Calculation

Memo" in response to Mr. Patel's FOIA request. This Court will deny the request for an

evidentiary hearing on this issue because the Government described to the U.S. Probation Office

how it calculated the loss amount, as reflected in the PSR ¶¶ 28-42, and provided the backup data

for the loss calculation to the defense before sentencing.

J. Request to supplement the reply brief

In her reply brief to the Government's answer, Ms. Patel requested an extension of time to

supplement her brief in further support of her § 2255 motion. (Civ. ECF No. 53 at 12). She

submits that her serious health condition precluded her from assisting counsel in preparing a

timely declaration and supporting evidence. (Id. at 12-13). The Government did not respond,

and Ms. Patel submitted a supplemental motion for an evidentiary hearing (Civ. ECF No. 54),

together with her declaration in support of her reply brief, and the declaration of an investigator

whom she hired to interview witnesses and obtain information about the Government's loss

calculation.

Ms. Patel's request for yet another extension of time for briefing is not supported by good

cause. Ms. Patel filed her original § 2255 motion in September 2017. She was given an

extension of time to submit a second amended § 2255 motion on or before May 30, 2018, but

ultimately did not do so. (Civ. ECF Nos. 9, 10). The Government did not file its full answer to

her amended § 2255 motion until June 15, 2020. (Civ. ECF No. 16). At that point, Ms. Patel

had three years to provide a declaration in support of her § 2555 motion, including her claim that

the Government's loss amount was grossly inflated. Nonetheless, this Court granted a stay of

approximately fifteen months while the Patels pursued documents regarding the Government's

loss calculation through a FOIA request. (Civ. ECF Nos. 29, 38, 40). This Court granted Ms.

Patel two extensions of time to file her reply brief, which was ultimately filed on May 16, 2022,

without a declaration in support of her loss argument. (Civ. ECF Nos. 50, 52, 53). Ms. Patel had

five years to discover support for her claim that counsel was ineffective for failing to establish

the Government's loss calculation was grossly inflated, and expanding the record at this time is

unwarranted. This Court denies her supplemental motion for hearing (Civ. ECF No. 54) and her

request for an evidentiary hearing, because the record conclusively shows that she is not entitled

to relief on her ineffective assistance of counsel claims. 28 U.S.C. § 2255(b).

II. Statute of Limitations and Equitable Tolling

When a federal defendant elects not to file a direct appeal, she must file a motion under 28

U.S.C. § 2255 within one year and fourteen days after the judgment of conviction was entered.

See Fed. R. App. P. 4(b)(1); Kapral v. United States, 166 F.3d 565, 577 (3d Cir. 1999). Judgment

was initially entered on August 16, 2016, and Ms. Patel did not file a notice of appeal. According

to the Government, Ms. Patel's motion is time-barred because she filed her original § 2255 motion

one year after the amended judgment was filed, more than one year after judgment was initially

entered. (Civ. ECF No. 27 at 10). In her reply brief, Ms. Patel claims that the statute of limitations

restarted on September 13, 2016, the date an amended judgment was entered to correct a clerical

error in the amount of restitution. (Civ. ECF No. 53 at 3). If the amended judgment restarted the

limitations period, she submits that her filing was timely. (Id.)

The Third Circuit has not addressed the question of whether an amended judgment that

merely corrects a clerical error in the original judgment restarts the one-year statute of limitations

for a motion under 28 U.S.C. § 2255. The Tenth and Eleventh Circuits have held that when an

amended judgment is ministerial in nature, it does not restart the one-year statute of limitations

period. United States v. Prado-Diaz, 434 F. App'x 763, 765 (10th Cir. 2011); Borgesano v. United

States, No. 20-11453, 2021 WL 2879696, at *4 (11th Cir. July 9, 2021); see also Marmolejos v.

U.S., 789 F.3d 66, (2nd Cir. 2015) (amended judgment correcting clerical errors is not a new

judgment for purposes of second or successive requirements under 28 U.S.C. § 2255(h)). This

Court agrees with the Tenth and Eleventh Circuits, and therefore, turns to the question of equitable

tolling.

The one-year statute of limitations under § 2255 is not jurisdictional, and is, therefore,

subject to equitable tolling. Miller v. N.J. State Dep’t of Corr., 145 F.3d 616, 617–18 (3d Cir.

1998). For equitable tolling to apply, the petitioner “bears the burden of establishing two elements:

(1) that he has been pursuing his rights diligently; and (2) that some extraordinary circumstance

stood in his way.” Pace v. DiGuglielmo, 544 U.S. 408, 418 (2005). Therefore, Ms. Patel must

explain how she was prevented from asserting her rights, and that she pursued her rights diligently.

LaCava v. Kyler, 398 F.3d 271, 276 (3d Cir. 2005).

Ms. Patel surrendered to federal prison on October 27, 2016, just days after having major

surgery. (Civ. ECF No. 53 at 6). Almost immediately, she began to suffer progressive symptoms

that affected her ability to complete her pro se § 2255 motion. (Civ. ECF No. 53-1, ¶¶ 5-7).

Further, Ms. Patel speaks limited English. (Id., ¶ 3). She prepared her § 2255 motion with

translation assistance from her children. (Id., ¶ 4).

The Third Circuit has held "that inability to read or understand English, combined with

denial of access to translation or legal assistance, can constitute extraordinary circumstances that

trigger equitable tolling… the relevant inquiry is… how severe an obstacle it creates with respect

to meeting" the one-year statute of limitations. Pabon v. Mahanoy, 654 F.3d 385, 400–01 (3d Cir.

2011). Ms. Patel's serious medical condition during the one-year statute of limitations period,

combined with her need to obtain outside translation services from her children to prepare the

motion while incarcerated, are extraordinary circumstances that trigger equitable tolling.

Ms. Patel must also show that she nonetheless “exercised reasonable diligence in…

bringing [the] claims.” Miller, 145 F.3d at 618–19 (quoting New Castle County v. Halliburton

NUS Corp., 111 F.3d 1116, 1126 (3d Cir. 1997); see also Irwin v. Department of Veterans Affairs,

498 U.S. 89, 96 (1990)). While due diligence “does not require ‘the maximum feasible

diligence,’… it does require reasonable diligence in the circumstances.” Schlueter v. Varner, 384

F.3d 69, 74 (3d Cir. 2004) (citations omitted). Determining whether Ms. Patel has exercised

“reasonable diligence… depends on the circumstances faced by the particular petitioner.”

Munchinski v. Wilson, 694 F.3d 308, 331 (3d Cir. 2012); see also Wilson v. Beard, 426 F.3d 653,

661 (3d Cir. 2005) (“The fact that we require a petitioner in one situation to undertake certain

actions does not necessitate that we impose the same burden on all petitioners” because “whether

a habeas petitioner has exercised due diligence is context-specific.”)

Ms. Patel's pro se § 2255 motion was filed only 20 days late. This short delay, considering

her ill-health and need for translation services, establishes the reasonable diligence required for

equitable tolling of the statute of limitations. Therefore, this Court will address the merits of Ms.

Patel's amended § 2255 motion.

III. DISCUSSION

A. Legal Standard

A prisoner in federal custody may file a motion under 28 U.S.C. § 2255 to challenge the

validity of his or her conviction and sentence. Section 2255 provides, in relevant part:

A prisoner in custody under sentence of a court established by Act

of Congress claiming the right to be released upon the ground that

the sentence was imposed in violation of the Constitution or laws of

the United States, or that the court was without jurisdiction to

impose such a sentence, or that the sentence was in excess of the

maximum authorized by law, or is otherwise subject to collateral

attack, may move the court which imposed the sentence to vacate,

set aside or correct the sentence.

28 U.S.C. § 2255.

The Third Circuit has summarized the legal standard for bringing a Sixth Amendment

ineffective assistance of counsel claim, first announced by the Supreme Court in Strickland v.

Washington, 466 U.S. 668 (1984):

a criminal defendant may demonstrate that his representation was

constitutionally inadequate by proving: (1) that his attorney's

performance was deficient, i.e., unreasonable under prevailing

professional standards; and (2) that he was prejudiced by the

attorney's performance. Under the first prong, judicial scrutiny is

highly deferential, and courts must indulge a strong presumption

that counsel's conduct falls within the wide range of reasonable

professional assistance. In order to establish prejudice, the defendant

must prove that there is a reasonable probability that, but for

counsel's unprofessional errors, the result of the proceeding would

have been different. We have endorsed the practical suggestion in

Strickland to consider the prejudice prong before examining the

performance of counsel prong because this course of action is less

burdensome to defense counsel.

United States v. Booth, 432 F.3d 542, 546 (3d Cir. 2005) (internal quotations, alterations and

citations omitted). The same test applies to advice given by counsel in the context of guilty plea

discussions. Id. (citing Hill v. Lockhart, 474 U.S. 52, 58 (1985)). In such cases, the petitioner

must establish "that but for his trial attorney's alleged ineffectiveness, he would likely have

received a lower sentence." Id. at 547. Alternately, a petitioner may establish prejudice by

showing "that but for his counsel’s purported errors, he would have gone to trial, received a more

favorable plea deal, or have been better off pleading guilty without the benefit of a plea

agreement." Boye v. United States, 810 F. App'x 118, 121 (3d Cir. 2020).

B. Whether counsel was ineffective by engaging in joint representation

Ms. Patel claims that her counsel provided constitutionally ineffective assistance because

he failed to advise her of possible conflicts of interest arising from joint representation with her

husband and his counsel. (Civ. ECF No. 4-1, ¶¶ 55–56.) In every meeting with her counsel, her

husband was present. (Id., ¶ 54). Her counsel never advised her of the pitfalls of entering into a

joint defense with her husband. (Id., ¶ 47). He failed to advise her of safety valve provisions and

the possibility of a cooperation agreement. (Civ. ECF No. 4-1, ¶ 54). On January 25, 2014, her

husband appeared at a proffer session with Attorney Anthony Fusco ("Fusco") and representatives

for the Government. (Id., ¶ 50). Ms. Patel was not advised of the conflict of interest this created

when her husband's proffer statement incriminated her and was used against her at sentencing.

(Id., ¶¶ 51-53). The plea agreement contained a stipulated loss figure that included losses prior to

the date of her knowledge or involvement in the criminal conduct. (Id., ¶ 57).

In opposition, the Government submitted the affidavit of Ms. Patel's counsel, Frank Arleo,

Esq. ("Arleo Aff."). (Civ. ECF No. 27 at 136-41). Mr. Arleo represented that he and co-counsel

Anthony Fusco met with the Patels for the first time on June 12, 2014. (Id. at 136-37, ¶ 5). They

discussed the possibility of joint representation and explained the contents of the joint defense

agreement. (Id.) The joint defense agreement provides that "[b]y entering into the Agreement,

each party knowingly and expressly waives the right to raise a conflict of interest based on the

terms of the Agreement" and "[e]ach party is free to withdraw at any time, with or without reason,

from the Agreement upon giving express prior written notification to each of the parties….") (Id.

at 144). Ms. Patel never expressed a desire to withdraw from joint representation. (Id. at 136-37,

¶ 5). In reply, Ms. Patel contends that Mr. Arleo did not make any effort to distinguish her

responsibility for losses from her husband's, even though his criminal conduct predated hers, and

she could not be held responsible for any losses prior to 2012. (Civ. ECF No. 53 at 7, n. 2).

"The Sixth Amendment requires counsel to avoid conflicts of interest in order to fulfill the

duty of loyalty owed to the client." United States v. Santarelli, 604 F. App'x 164, 166 (3d Cir.

2015) (citing Strickland, 466 U.S. at 688). To establish ineffective assistance of counsel, a

defendant must establish an actual conflict of interest. Id. “An actual conflict of interest ‘is

evidenced if, during the course of the representation, the defendants' interests diverge with respect

to a material factual or legal issue or to a course of action.’” United States v. Gambino, 864 F.2d

1064, 1070 (3d Cir. 1988) (quoting Sullivan v. Cuyler, 723 F.2d 1077, 1086 (3d Cir. 1983)).

"Accordingly, [a petitioner] must prove that 'some plausible alternative defense strategy or tactic

might have been pursued' and that 'the alternative defense was inherently in conflict with or not

undertaken due to the attorney's other loyalties or interests.'" Id. (quoting United States v. Fahey,

769 F.2d 829, 836 (1st Cir. 1985)). “[A]n actual conflict of interest is more likely to be found

where ‘an attorney takes positive steps on behalf of one client prejudicial to another[.]’" Santarelli,

604 F. App'x at 167.

Based on Mr. Arleo's affidavit and submission of the joint representation agreement, the

record establishes that Ms. Patel was advised of the potential for conflict arising from joint

representation, and that she was free to change her mind at any time and withdraw. Significantly,

Mr. Arleo wrote in a memorandum dated January 20, 2015, that the Government, believing both

defendants were equally culpable, was not willing to enter into a plea agreement unless both

defendants accepted equal responsibility for the scheme to defraud, and that they would receive

the same plea agreement. (Civ. ECF No. 27, ¶¶ 150, 178). To secure the identical plea agreements,

Mr. Patel made a proffer statement to the Government. At the plea hearing, Ms. Patel was advised

that she could refuse to plead guilty and retain all her rights, but she did not choose to do so.

The Patels obtained a benefit from the plea agreement because the Government agreed not

to pursue any other charges arising out of the conduct described in the Information. Ms. Patel

suffered no prejudice arising from joint representation because her interests were aligned with her

husband, and the Government had a strong case for holding both equally responsible, based in part

on her confession to forging physician signatures, and because she shared in the lavish lifestyle

from the proceeds of the fraudulent scheme. Santarelli, 604 F. App'x at 167–68 (where husband

and wife presented uniform defense theory and did not deter from it, conflict of interest claim was

implausible). Therefore, this ineffective assistance of counsel claim fails.

C. Whether counsel was ineffective by not obtaining services of an interpreter for

consultations with Ms. Patel

Ms. Patel, who speaks Gujarati and limited English, claims that her counsel provided

ineffective assistance because he did not provide her with an interpreter for any of their

consultations, although she used the services of an interpreter at the plea hearing and sentencing

hearing. The Government submitted Mr. Arleo's sworn affidavit that Ms. Patel never requested

an interpreter, and Mr. Patel was available to interpret during all consultations. (Civ. ECF No. 27,

¶¶ 17, 22-24). Ms. Patel did not address this in her reply brief. (Civ. ECF No. 53).

The records shows that Ms. Patel had many opportunities to voice any questions or

misunderstandings during her plea colloquy, with assistance of an interpreter, and she did not voice

any concerns. (Crim. ECF No. 31). Instead, she fully affirmed her understanding and desire to

plead guilty to the terms that were described and translated for her at the plea hearing. An

interpreter was available at her sentencing as well. (Crim. ECF No. 27 at 67). Ms. Patel has failed

to establish that she suffered any prejudice from counsel's failure to provide an interpreter during

her attorney consultations. United States v. Mendez, 282 F. App'x 153, 156 (3d Cir. 2008) (holding

that a court's use of an interpreter at a sentencing hearing did not alter the fact that the defendant

confirmed his understanding in English and never demonstrated any difficulty in comprehension).

Therefore, this ineffective assistance of counsel claim fails on both prongs of the Strickland test.

D. Whether counsel was ineffective in pre-plea investigation and plea negotiations

Ms. Patel contends that her counsel was ineffective in his pre-plea investigation and plea

negotiations. "[C]ounsel has a duty to make reasonable investigations or to make a reasonable

decision that makes particular investigations unnecessary.” Shotts v. Wetzel, 724 F.3d 364, 375 (3d

Cir. 2013) (quoting Strickland, 466 U.S. at 690–91)). Deference to counsel's judgment is

particularly important in the plea context. Lockhart v. Fretwell, 506 U.S. 364, 372 (1993).

In the case of an early plea, neither the prosecution nor the defense

may know with much certainty what course the case may take. It

follows that each side, of necessity, risks consequences that may

arise from contingencies or circumstances yet unperceived. The

absence of a developed or an extensive record and the circumstance

that neither the prosecution nor the defense case has been well

defined create a particular risk that an after-the-fact assessment will

run counter to the deference that must be accorded counsel's

judgment and perspective when the plea was negotiated, offered,

and entered.

Premo v. Moore, 562 U.S. 115, 126 (2011).

According to the PSR, Ms. Patel was arrested on June 4, 2014, and confessed to health care

fraud after a search of Biosound's office in Parsippany, New Jersey uncovered materials she used

to forge physician signatures on Biosound's and Heart Solution's diagnostic reports. The

Government had interviewed Biosound employees who were aware of the fraud. Ms. Patel asserts

that her counsel failed to argue she was a stay at home mom with limited involvement in the

scheme to defraud. However, based on her confession, there was risk that a jury would not credit

Ms. Patel's testimony of limited involvement and knowledge of the fraud, particularly because she

enjoyed the lavish lifestyle that resulted from the fraudulent scheme. Time was of the essence in

obtaining a plea deal because the more time and effort the Government spent in prosecuting the

case, the less reason it had to accept a plea. There was no guarantee that the Government would

not bring additional charges for money laundering, as suggested in early plea negotiations. Thus,

it was objectively reasonable for counsel to forego a time-consuming pre-plea investigation of the

loss amount, which would require review of thousands of diagnostic reports against Reading

Doctors' records, which the Government had already undertaken to obtain a reasonable estimate

of losses. Without a plea, conviction was likely, and the Court was required to determine only a

reasonable estimate of the losses under Application Note 3(C) to U.S.S.G. § 2B1.1.

Without further explanation, Ms. Patel claims that she learned of a better plea offer that her

counsel never disclosed to her. The Government denies this, and Mr. Arleo submitted that he

conveyed the two formal plea offers made by the Government, and also discussed an informal

offer with Ms. Patel. Mr. Arleo's records of the plea negotiations support his denial of her claim.

Additionally, Mr. Arleo did not blindly accept the Government's $4.3 million loss

calculation during plea negotiations. He proposed an alternative loss amount under $100,000. His

loss theory was supported by Application Note 3(E)(i) to U.S.S.G. § 2B1.1, which provides:

Loss shall be reduced by the following:

(i) The money returned, and the fair market value of the property

returned and the services rendered, by the defendant or other

persons acting jointly with the defendant, to the victim before

the offense was detected.

(emphasis added). Ultimately, the U.S. Probation Office recommended that Ms. Patel not receive

such credit for services provided, pursuant to Application Note 3(F)(v), which states:

In a case involving a scheme in which (I) services were fraudulently

rendered to the victim by persons falsely posing as licensed

professionals; . . . loss shall include the amount paid for the

property, services or goods transferred, rendered, or misrepresented,

with no credit provided for the value of those items or services.

(emphasis added). Whether Ms. Patel's role in the forgeries of physician signatures and her failure

to have a neurological supervisor for Biosound equated to falsely posing as a licensed professional

was subject to reasonable dispute, and the Guidelines are advisory in nature. Therefore, it was

objectively reasonable for Mr. Arleo to argue for a lower loss amount based on the value of

performing the diagnostic tests. When Mr. Arleo could not obtain a more favorable plea agreement

from the Government and the offer was about to expire, Mr. Arleo recommended that Ms. Patel

stipulate to the gross proceeds received from the scheme to defraud but retain the right to argue

for a lower loss amount at sentencing.

Ms. Patel now believes she may have been better off going to trial or pleading open because

Mr. Arleo failed to convince the sentencing judge to adopt a lower loss amount. The Strickland

standard, however, precludes viewing counsel's performance in hindsight. Mr. Arleo's

preservation of the right to argue for a lower loss amount at sentencing, while retaining the

possibility of a reduction for acceptance of responsibility and a guarantee of no additional charges,

was objectively reasonable. Ms. Patel has not presented an alternative loss theory available to Mr.

Arleo at that time, which was more likely to result in a lower loss amount. The Government had

obtained the loss amount directly from the insurers and compared this against records from most

of the Reading Doctors whose signatures were forged. The losses did not include diagnostic

reports for echocardiograms because the Government was aware that all echocardiograms were

sent to Reading Doctors. The payments for all neurological tests were included in the losses

because the tests were not supervised by a neurologist. Therefore, this claim of ineffective

assistance of counsel in pre-plea investigation and plea negotiations fails both prongs of the

Strickland test.

E. Whether ineffective assistance of counsel resulted in an unknowing and involuntary

plea

Ms. Patel contends that her counsel misstated the terms of the plea agreement by telling

her that she could challenge the loss amount at sentencing, and that the forfeiture order would be

limited to the loss amount determined by the sentencing judge. This was not a misstatement, the

plea agreement permitted Ms. Patel to challenge the loss amount, and limited the forfeiture to the

loss amount determined by the sentencing judge. Next, she contends that counsel failed to inform

her that the plea agreement permitted the Government to seek additional forfeiture in another

proceeding, referring to the False Claims Act litigation.

To satisfy due process, a guilty plea must be voluntary, knowing, and intelligent. Boykin

v. Alabama, 395 U.S. 238, 243 (1969); Jamison v. Klem, 544 F.3d 266, 274 (3d Cir. 2008). Here,

the plea agreement contained a provision advising Ms. Patel that the Government was not

precluded from initiating and prosecuting a civil action, and she affirmed her understanding of this

provision in the plea hearing. This cured any error in failing to advise Ms. Patel of the

consequences of her guilty plea on civil litigation. See, e.g., United States v. Fazio, 795 F.3d 421,

428 (3d Cir. 2015) (any error in failing to advise defendant that guilty plea would subject him to

automatic immigration removal was cured by in-depth colloquy and language of the plea

agreement). Ms. Patel accepted the risk that she could be found liable for any damages permitted

in a civil action. Moreover, there is evidence the Patels were considering "a global resolution"

during plea negotiations. (Civ. ECF No. 27 at 181). Mr. Arleo memorialized this in a letter dated

April 15, 2016,

Regarding the civil claims, we were not able to reach a global

resolution of those claims. As a result, the Government filed a civil

action asserting claims under the False Claims Act. After we filed

our Answer denying the allegations of the Complaint, the

Government filed a Motion for Summary Judgment. In that Motion,

the Government argues that it is entitled to judgment since you

previously admitted in the criminal action that there was no

neurological supervision. The Government also argues that you are

not permitted to argue the contrary position that we asserted in our

papers in opposition to the Government’s Motion, which claimed

supervision for at least some of the years.

(Civ. ECF No. 27 at 184). Mr. Arleo advised that if Ms. Patel pleaded guilty because they did not

have a "valid" neurological supervisor for Biosound during the relevant time period, this could

result in losing the motion for summary judgment in the civil action and being exposed to treble

damages, but she would retain the argument for a three-point reduction in her base offense level

for acceptance of responsibility. (Civ. ECF No. 27 at 184). Mr. Arleo stated,

After discussing all of the above in great detail at our April 5, 2016

meeting, it is my understanding that you do not wish to alter your

position in the civil case that there was a valid neurological

supervisor during at least some portion of the relevant time period.

You have indicated that you feel strongly that you are correct in your

position on this issue and that you fully understand the risks of

proceeding in this fashion. Accordingly, I will advise the

Government that you do not wish to change the legal position

asserted in our opposition to the Government’s Summary Judgment

Motion. In addition, if the Government argues that you are not

entitled to a 3 point reduction for acceptance of responsibility in the

criminal action we will intend to fight that as well.

(Civ. ECF No. 27 at 184-85). Mr. Arleo's letter to Ms. Patel establishes her knowing, intelligent

and voluntary entry of her guilty plea at the hearing before the Court, while she still had the

opportunity to go to trial instead. This claim of ineffective assistance of counsel fails because

counsel's performance was not objectively unreasonable under the circumstances as they existed

before the plea hearing.

F. Whether counsel provided ineffective assistance at the plea hearing

Ms. Patel asserts that her counsel provided ineffective assistance at the plea hearing by

allowing her to answer “yes” to ambiguous factual basis questions, which caused her to falsely

admit to her involvement in the fraudulent scheme from 2006 to 2014, and to the amount of money

received from Medicare and private insurance companies. Solemn declarations in open court, such

as those made in a plea hearing, "carry a strong presumption of verity[,]" and constitute a

"formidable barrier" in collateral proceedings. Blackledge v. Allison, 431 U.S. 63, 73-74 (1977).

To begin, Ms. Patel had the services of an interpreter at the plea hearing. Therefore,

language was not a barrier to her understanding. The factual basis questions for the plea colloquy,

quoted in Section I.C supra, were not ambiguous. The questions were designed to satisfy the

sentencing judge of Ms. Patel's guilt of the one count charged in the Information, as she had agreed

in the written plea agreement. The time period of the fraudulent scheme, 2006 to 2014, was clearly

stated in the Information, the plea agreement, and in the factual basis questions at the plea hearing.

Judge Walls advised Ms. Patel:

you should know that you are under no obligation to plead guilty to

the charge. You have a right to have the matter referred to the grand

jury. A grand jury will hear the evidence presented to it by the

Government and decide whether you should be formally charged

with a crime.

(Crim. ECF No. 31 at 5-6). Ms. Patel verbally acknowledged that she understood. Judge Walls

told Ms. Patel, “if I say anything that does not accord with your understanding, please let me

know.” After advising Ms. Patel of her rights, Judge Walls asked whether she still wanted to plead

guilty, and she affirmed. If Ms. Patel was not involved in the scheme for the time period alleged,

she had every opportunity to interject.

Moreover, Mr. Arleo went over the factual basis questions with Ms. Patel in advance of

the plea hearing. They discussed the issue of whether Biosound had a supervising neurologist

during the relevant period, and the factual basis question was revised because the Patels said they

had hired Dr. Tinkelman as a neurological supervisor. After having this discussion, Mr. Arleo

confirmed in a letter to Ms. Patel that she agreed to answer "yes" to the revised question at the plea

hearing because Dr. Tinkelman did not provide the proper supervision that Medicare required. She

made this decision because she wanted to receive a reduction in offense level for acceptance of

responsibility and still defend the False Claims Act litigation. The record establishes that counsel's

performance in advising Ms. Patel concerning the factual basis questions was objectively

reasonable, and any misunderstandings by Ms. Patel were cured by the plea colloquy. Therefore,

this ineffective assistance of counsel claim fails.

G. Whether counsel provided ineffective assistance at sentencing

Ms. Patel maintains that her counsel's performance at the sentencing hearing was deficient

because he relied on a meritless loss theory rather than arguing that she was not individually

responsible for most of the losses, and that the Government inflated the loss calculation. The

record does not support this allegation. First, the Government did not include payments by insurers

for any echocardiograms in the loss calculation, as Ms. Patel suggests. (see Civ. ECF No. 4-1 at

10, ¶ 38 and PSR, ¶ 32). The Government recognized that not all of the diagnostic reports were

forged and undertook a laborious review of thousands of records to obtain a reasonable estimate

of losses from the scheme to defraud. With this background, Mr. Arleo strenuously advocated that

Ms. Patel was less culpable than her husband, and she should not be responsible for any losses

from neurological diagnostic tests because she was not an owner or manager of Biosound, and for

much of the time, she was a stay at home mom. This argument, if successful, would have reduced

Ms. Patel's loss amount by approximately half. The restitution and forfeiture amounts, per the plea

agreement, would be equal to the loss amount.

Significantly, however, the Government explained that many of the neurological diagnostic

reports also contained forged physician signatures. Thus, liability was not premised solely on

failing to have proper supervision by a neurologist. The sentencing judge was persuaded by the

Government's argument that the Patels jointly operated Heart Solution and Biosound, and jointly

profited from their wrongdoing. He referred to Biosound and Heart Solution as a "mom and pop

shop."

Contrary to Ms. Patel's allegations, Mr. Arleo submitted that Biosound and Heart Solution

provided legitimate services to the patients involved by performing the diagnostic testing and

preparing preliminary reports. The only missing element was having a Reading Doctor review

and interpret the reports that had been prepared. Mr. Arleo justified this argument by stressing

that the Patels had cooperated with the Government in identifying all patients who were affected,

which allowed those at risk to follow up with their medical providers. It was determined that no

one had been injured by the scheme to defraud. Although rejected by the sentencing judge, the

argument had support in the advisory Sentencing Guidelines, and in precedent cited by Mr. Arleo

in the sentencing memorandum. Further, it was only part of the loss argument he presented. The

assistance of counsel guaranteed by the Sixth Amendment requires no more.

Ms. Patel's claim that her counsel failed to seek a downward departure based on her poor

health and other factors is inaccurate. Mr. Arleo argued that her offense level should be reduced

based on her serious medical condition, which required treatment that could not be provided in

prison. He further argued she was otherwise a good, charitable person, who simply made a

mistake. The sentencing judge disagreed, but this does not make counsel's performance

constitutionally deficient.

To establish ineffective assistance of counsel at sentencing, the petitioner must also

establish the reasonable probability of a shorter sentence but for counsel's errors. United States v.

Smack, 347 F.3d 533, 540 (3d Cir. 2003) (citing Glover v. U.S., 531 U.S. 198, 204 (2001) (holding

that any reduction in sentence constitutes substantial prejudice for purposes of the Strickland

analysis)). Even if this Court were to assume counsel's performance was constitutionally deficient,

Ms. Patel has not shown that a more in depth review of the payments by the insurers would have

resulted in a successful claim for a lower offense level. The sentencing judge added 18 points to

her base offense level based on a loss of $4,803.875.40. The relevant Guideline called for an

increase of 18 points to the base offense level for losses between $3,500,000 and $9,000,000.

U.S.S.G. § 2B1.1(b)(1)(J, K); (PSR ¶ 51). To reduce the offense level by one point, the loss

amount had to be under $3,500,000. Ms. Patel fell far short of her burden to establish prejudice

from counsel's failure to make this showing. See Boye v. United States, 810 F. App'x 118, 121 (3d

Cir. 2020) (holding the petitioner failed to set forth a lower loss calculation "to show that his

sentence would have been materially impacted, or that he would have been on stronger plea

bargaining grounds.") Therefore, this ineffective assistance of counsel claim fails on both prongs.

IV. CONCLUSION

Based on the record as a whole, Ms. Patels' ineffective assistance of counsel claims

amount to nothing more than her belief that, in hindsight, she would have been better off if her

counsel had pursued a different strategy from the beginning. "[I]t is critical that courts be 'highly

deferential' to counsel's reasonable strategic decisions and guard against the temptation to engage

in hindsight." Marshall v. Hendricks, 307 F.3d 36, 85 (3d Cir. 2002) (quoting Strickland, 466

U.S. at 689–90)). As discussed above, counsel's strategic choices throughout his representation

of Ms. Patel were objectively reasonable under the circumstances, her plea was knowing,

intelligent and voluntary, and she failed to establish prejudice from counsel's performance at any

stage.

V. CERTIFICATE OF APPEALABILITY

Pursuant to 28 U.S.C. § 2253(c), the petitioner in a § 2255 proceeding may not appeal

from the final order in that proceeding unless he makes “a substantial showing of the denial of a

constitutional right.” “tA petitioner satisfies this standard by demonstrating that jurists of reason

could disagree with the district court’s resolution of his constitutional claims or that jurists could

conclude that the issues presented here are adequate to deserve encouragement to proceed

further.” Miller-El v. Cockrell, 537 U.S. 322, 327 (2003); Slack v. McDaniel, 529 U.S. 473, 484

(2000). Because jurists of reason could not disagree with this Court’s conclusion that Ms. Patel's

Sixth Amendment ineffective assistance of counsel claims are without merit, she has failed to

make a substantial showing of the denial of a constitutional right, and no certificate of

appealability shall issue.

An appropriate order follows.

Date: December 22 2022

~

DMilyob-

Hon. Susan D. Wigenton,

United States District Judge

43