United States v. Angelita Newton

In the

United States Court of Appeals

For the Seventh Circuit

____________________

No. 21-3270

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

ANGELITA NEWTON,

Defendant-Appellant.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 1:17-cr-00455-3 — Virginia M. Kendall, Judge.

____________________

ARGUED SEPTEMBER 12, 2022 — DECIDED AUGUST 7, 2023

____________________

Before EASTERBROOK, KIRSCH, and JACKSON-AKIWUMI,

Circuit Judges.

JACKSON-AKIWUMI, Circuit Judge. Angelita Newton chal-

lenges the conviction and sentence she received for her in-

volvement in a scheme to defraud Medicare. First, she argues

that she was denied a fair trial because she could not question

a witness who invoked the Fifth Amendment’s protections

against self-incrimination. But we reject the argument and af-

firm Newton’s conviction because the district court rightly

2 No. 21-3270

concluded that the witness’s invocation of the Fifth Amend-

ment was proper and the government’s refusal to issue im-

munity to that witness did not distort the fact-finding process.

Second, Newton argues that her sentence is procedurally

flawed and substantively unreasonable. Because we agree

that the district court’s calculation of Medicare’s loss attribut-

able to Newton was unreasonable, we vacate Newton’s sen-

tence and remand for resentencing.

I

From 2011 to 2017, Care Specialists, Inc., owned by hus-

band-and-wife team Ferdinand and Ma Luisa Echavia, oper-

ated as a provider of health care to homebound beneficiaries

of Medicare. 1 At least part of its operation, however, was a

ruse to collect Medicare reimbursements fraudulently. Care

Specialists would submit Medicare claims for health services,

including skilled nursing services, provided to patients that

the company represented as confined to their homes. But

many of these patients did not qualify for Medicare reim-

bursement because they were not actually homebound or in

need of skilled care. The company doctored service notes to

either overcharge for services or bill for services not provided.

The company also, by altering dates, resubmitted claims that

had been rejected by Medicare because the patient was al-

ready admitted to an in-patient facility on the date Care Spe-

cialists purportedly provided care.

Ferdinand, in addition to being the owner, provided nurs-

ing services to some of Care Specialists’ patients. But in 2014,

1 Ferdinand Echavia owned the company from its inception until he

was excluded from participating in Medicare in 2014, at which point he

transferred ownership to Ma Luisa.

No. 21-3270 3

he was excluded from participating in Medicare due to a prior

conviction for providing kickbacks to patients at another

home health agency. Ferdinand brought this practice with

him to Care Specialists as a way to recruit and retain patients.

And, despite his exclusion, Ferdinand continued to provide

patients with nursing services for which the company sought

reimbursement. He concealed his involvement in patient care

from Medicare by accompanying one of the other nurses, Re-

ginald Onate, as Onate visited patients.

Newton got caught up in the scheme. She was hired as a

quality assurance specialist and Ferdinand’s personal secre-

tary. In her role as a quality assurance specialist, Newton

should have been limited to reviewing nurses’ treatment

notes for completeness before the company submitted a Med-

icare claim for billing. If notes were incomplete, quality assur-

ance specialists like Newton were supposed to inform the

treating nurse who would fix the omission. But employees

testified that Newton instead would personally draft Ferdi-

nand’s notes submitted in support of claims. Ferdinand

would leave scrap paper noting each patient’s vital signs.

Newton would then fill in the proverbial blanks by writing a

“full head-to-toe assessment” including descriptions of

skilled nursing interventions. Newton would also fudge the

dates on treatment notes to ensure that Medicare would ac-

cept the associated reimbursement claim. Despite playing this

role in the fraud, Newton earned an average annual salary of

$54,080, which did not additionally compensate her for her

involvement in the conspiracy.

The conspiracy came crumbling down when a former em-

ployee of Care Specialists, Norma Bolender, filed a whistle-

blower letter describing the scheme that Care Specialists had

4 No. 21-3270

concocted. Bolender met with federal investigators multiple

times. At those meetings, Bolender directly implicated New-

ton as a key figure in the conspiracy. A grand jury issued in-

dictments charging the Echavias, Newton, and Onate for their

roles in the Medicare fraud. The Echavias and Onate agreed

to plead guilty to their involvement. Newton was the only

charged defendant to proceed to trial.

The jury found Newton guilty of conspiracy to commit

both health care fraud and wire fraud after hearing testimony

from multiple Care Specialists employees. This did not in-

clude Bolender who avoided testifying by invoking her rights

against self-incrimination under the Fifth Amendment. After

the guilty verdict, Newton filed a motion for a new trial under

Rule 33 of the Federal Rules of Criminal Procedure, challeng-

ing for the first time Bolender’s invocation of the Fifth

Amendment. Newton argued that the court wrongly accepted

the invocation and the government’s refusal to grant Bolender

immunity violated her due process rights.

The court denied the motion, explaining that prosecutors

hold significant discretion over granting or withholding im-

munity, and they abuse that discretion only if they withhold

immunity intending to “distort the judicial fact-finding pro-

cess.” United States v. Chapman, 765 F.3d 720, 731 (7th Cir.

2014) (cleaned). The court concluded that the government did

not distort the fact-finding process at Newton’s trial because

Bolender’s testimony was just as likely, if not more likely, to

inculpate Newton as it was to exculpate her. The court further

concluded that Bolender’s invocation of her rights under the

Fifth Amendment had been proper because she potentially

would have opened herself up to prosecution if she had testi-

fied.

No. 21-3270 5

At sentencing, the judge concluded that Newton’s offense

level should be enhanced 18 levels for a loss amount to Med-

icare of $6.3 million, which represented a 10% reduction from

the roughly $7 million paid to Care Specialists by Medicare

during the period of the fraud. Based on this, and other ad-

justments, the judge found Newton’s guidelines range to be

70 to 87 months in prison. The judge then sentenced Newton

to a below-guidelines term of 56 months in prison and or-

dered her jointly and severally liable for $6.3 million in resti-

tution.

Newton now appeals, raising constitutional challenges to

her conviction, which we turn to first, and procedural and

substantive challenges to her sentence.

II

Newton argues that her conviction violated her right to a

fair trial because Bolender was permitted to invoke the Fifth

Amendment, depriving Newton of exculpatory testimony.

Her argument proceeds in two parts. First, Newton claims

that her Fifth Amendment right to due process was violated

when the government refused to immunize Bolender from

prosecution. Second, Newton contends that the district court

should have required Bolender to testify in any event because

she was protected from prosecution by the applicable statute

of limitations. Though not framed as such, we read this sec-

ond challenge as an argument that the district court deprived

Newton of her right to compulsory process under the Sixth

Amendment. See Chapman, 765 F.3d at 730 (noting a witness’s

invocation of the Fifth Amendment creates a conflict between

his right against self-incrimination and the defendant’s Sixth

Amendment right to compulsory process).

6 No. 21-3270

To set the stage, we begin by detailing Bolender’s involve-

ment at Newton’s trial. The government initially planned to

call Bolender to testify, but it backtracked and decided not to

do so. On the eve of trial, the government informed the court

and Newton that it would not call Bolender as a witness be-

cause of potential Fifth Amendment concerns. The govern-

ment agreed to keep Bolender under subpoena at Newton’s

request.

Newton attempted to call Bolender as a witness at trial;

she believed Bolender would provide exculpatory testimony.

But Bolender seemed implicated in the conspiracy, so the

court appointed an attorney to advise Bolender on her Fifth

Amendment rights before Newton proceeded with question-

ing. The attorney identified a statute of limitations defense

that might shield Bolender from prosecution, paving the way

for Bolender to testify without fear of opening herself up to

prosecution. The relevant statute of limitations was five years,

and Bolender left Care Specialists in January 2015, more than

five years before Newton’s trial in February 2020. But, it was

not until October 2015 that Bolender sent the whistle blower

letter to authorities, a date that would place Bolender’s con-

duct within the five-year statute of limitations. Bolender’s at-

torney advised her and the court that he was not sure when,

between January and October 2015, the limitations period had

begun to run.

With the trial on pause, and before Bolender decided

whether to invoke the Fifth Amendment, Newton’s counsel

complained to the court that the defense only learned for the

first time at the final pretrial conference, two weeks before

trial, that Bolender “may have potential Fifth Amendment is-

sues.” The court asked: “Well, did you know about [the Fifth

No. 21-3270 7

Amendment issues] based upon the [interview] reports?”

Newton’s counsel responded:

I don’t think she has Fifth Amendment issues,

your Honor. I just wanted to clarify the timeline.

She was subpoenaed by the government origi-

nally, but she is our witness. So that’s how that

whole thing went down.

Bolender ultimately invoked her rights under the Fifth

Amendment and did not testify. At no point did Newton clar-

ify that the court should reject the invocation because of

Bolender’s potential statute-of-limitations defense, or that the

government should be required to offer Bolender immunity.

Before addressing Newton’s arguments, we must settle

the issue of our standard of review. The government says

Newton raised her objections to Bolender’s Fifth Amendment

invocation for the first time in a post-trial motion, which was

too late to avoid forfeiture. If Newton forfeited her argu-

ments, as the government claims, we must apply plain-error

review. Newton insists that she objected to Bolender’s invo-

cation during trial, even if she did not use the word “objec-

tion.” She says this argument and her argument that the gov-

ernment should have offered Bolender immunity were

properly preserved, so we should review the matter for an

abuse of discretion.

The government is correct that Newton did not object to

the court’s acceptance of Bolender’s invocation during trial.

When Newton’s counsel said, “I don’t think [Bolender] has

Fifth Amendment issues,” Bolender had not yet invoked her

rights, and Newton did not suggest that the court should re-

ject Bolender’s invocation if she made one. After Bolender

8 No. 21-3270

invoked the Fifth Amendment, Newton’s counsel responded

simply by saying, “Well, that creates difficulties.” Indeed,

Newton accepted Bolender’s invocation and attempted to

work with the government on stipulating to the admission of

information in Bolender’s interview reports.

As for Newton’s claim that she preserved her argument

that the government should have granted Bolender immun-

ity, the record shows Newton did not remotely hint that she

wanted to assert a due process argument. Nor did she suggest

that the government should grant Bolender immunity. The

district court had no reason at the time to think that Newton

wanted to make an objection on that basis.

Newton raised these two arguments for the first time in

her motion for a new trial. But issues that should have been

brought at trial and are raised for the first time in a post-trial

motion are forfeited. See United States v. Reese, 666 F.3d 1007,

1020 (7th Cir. 2012); United States v. Wing, 104 F.3d 986, 988–89

(7th Cir. 1997). Consequently, Newton’s arguments are sub-

ject to plain-error review. United States v. Galvan, 44 F.4th

1008, 1011 (7th Cir. 2022). To establish plain error, Newton

must show that the error is “clear or obvious,” affected her

“substantial rights,” and “seriously affects the fairness, integ-

rity or public reputation of judicial proceedings.” Id.

(cleaned).

We begin with Newton’s argument that her due process

rights were violated when the government selectively with-

held immunity from Bolender while granting immunity to

other witnesses. Prosecutors have “significant discretion” to

grant immunity and compel testimony when a witness in-

vokes the Fifth Amendment’s protections against self-incrim-

ination. 18 U.S.C. § 6002, 6003(b); United States v. Davis,

No. 21-3270 9

845 F.3d 282, 291–92 (7th Cir. 2016). This discretion is subject

only to the requirement that the government not selectively

“immunize witnesses with the intention of distorting the fact-

finding process.” Davis, 845 F.3d at 292 (cleaned). While

courts may not direct the government to grant immunity, if

the government abuses its discretion to provide it, courts may

vacate a conviction based on a violation of due process. See id.

The parties also disagree about which side of a circuit split

we have come down on in regard to whether, in addition to

distorting the fact-finding process, the prosecutor must have

subjectively intended to cause such manipulation. We need

not concern ourselves with this question, however, because

Newton cannot clear the initial threshold. The district court,

in denying Newton’s post-trial motion, reasonably concluded

that she could not show that the fact-finding process was dis-

torted.

When Bolender initially alerted the authorities to the fraud

at Care Specialists, she specifically highlighted Newton’s role

in the conspiracy, explaining that Newton drafted fraudulent

records for Ferdinand. The district court rightly acknowl-

edged that Bolender repeatedly implicated Newton during

subsequent interviews:

For example, [Bolender] told investigators that

she “witnessed Newton completing blank

forms ‘all the time’ for [Ferdinand’s] patients,

and she also changed dates on visit notes” pur-

suant to orders from the Echavias. [Doc. 244-4 at

2; Doc. 244-7 at 3] (Bolender on record stating

“[t]he visit notes were controlled by [Newton]

and [Mrs. Echavia].”); [Doc. 244-10 at 5–6]

(Bolender explaining to investigators that

10 No. 21-3270

Newton completed blank patient visit forms

“all the time” under the direction of the Ec-

havias).

United States v. Newton, No. 17 CR 455-3, 2021 WL 5564876, at

*9 (N.D. Ill. Nov. 29, 2021). Further, the court emphasized

that, in a February 2017 interview, Bolender explained that,

although Newton misrepresented dates and times under the

Echavias’ direction at first, she later demonstrated an aptitude

for the work, understanding the marching orders “based on

years of experience working in the home health field.”

Newton pushes back, painting Bolender’s interviews in a

different light. Newton points out that during her last inter-

view with authorities, Bolender repeatedly stated that New-

ton was merely a secretary and she was not aware of New-

ton’s education or experience. Bolender also suggested that

she herself did not realize Care Specialists was engaged in

fraud until years after she started working there. According

to Newton, if Bolender did not initially recognize that fraud

was occurring, a jury could find that the relatively less expe-

rienced Newton could not have known about it either. But it

was not unreasonable for the district court to reject this notion

because even if Bolender testified that she was not subjectively

aware of Care Specialists’ fraud, that testimony would have

no bearing on Newton’s knowledge. Further, even if Newton

was only ever a secretary, that fact does not mean that she

could not have understood the fraud that was occurring and

of which she was a part. She worked directly under the own-

ers that concocted the fraud, presumably making Newton

privy to insider information that Bolender may have lacked.

Newton maintains that the jury could have found for her

because Bolender, in response to an interview question about

No. 21-3270 11

whether she believed Newton had intentionally acted ille-

gally or improperly, said that “people were just trying to fol-

low orders from their boss.” But to the extent that Bolender

had a personal opinion about Newton’s subjective

knowledge, that opinion would have been beside the point.

See United States v. Wantuch, 525 F.3d 505, 514 (7th Cir. 2008)

(holding that lay witness’s opinion about whether defendant

knew his actions were illegal was inadmissible under Rule

701 of the Federal Rules of Evidence).

Further, Bolender’s final interview is only exonerating if

we view it in isolation. Although Bolender said that Newton

worked off of Ferdinand’s “scratch” notes, Bolender had pre-

viously explained that these scratch notes contained very little

information about patient visits. Nothing contradicted other

evidence showing that Newton filled in the gaps by making

up additional information. Bolender also did not walk back

her previous assertion that Newton would frequently alter or

fabricate the dates and times on treatment notes. And even

during the final interview, Bolender said that she personally

witnessed Newton writing notes that Newton was not sup-

posed to write. Nothing about all of this is clearly exonerating.

The district court therefore did not plainly err when it con-

cluded that the absence of Bolender’s testimony at trial did

not distort the fact-finding process.

We now turn to Newton’s related argument that the dis-

trict court erred by accepting Bolender’s invocation of her

Fifth Amendment rights. According to Newton, the court

should have inquired more about Bolender’s statute of limi-

tations defense after her counsel identified it as a possibility.

When a subpoenaed witness invokes the Fifth Amend-

ment, the privilege against self-incrimination generally

12 No. 21-3270

trumps a defendant’s Sixth Amendment right to compulsory

process. Chapman, 765 F.3d at 730. A district court should re-

ject a witness’s Fifth Amendment invocation only if “the wit-

ness cannot possibly incriminate [herself].” Id. (quoting

United States v. Mabrook, 301 F.3d 503, 506 (7th Cir. 2002)). Oth-

erwise, the Fifth Amendment may be invoked so long as the

witness has “reasonable cause” to fear prosecution if she gives

a direct answer to the questions that may be posed during ex-

amination. Id.

It is neither clear nor obvious that Bolender lacked a rea-

sonable fear of prosecution. See United States v. Harper,

662 F.3d 958, 961 (7th Cir. 2011) (error is plain if “clear” or

“obvious” to the district court). Bolender’s lawyer informed

the court that she might be safe from prosecution, but he

could not be sure as the risk would depend on the date

Bolender withdrew from the conspiracy. Although Bolender

left Care Specialists in January 2015, leaving a company en-

gaged in criminal conspiracy is not necessarily enough on its

own to constitute withdrawal from the conspiracy. United

States v. Nagelvoort, 856 F.3d 1117, 1128–29 (7th Cir. 2017). Ra-

ther, Bolender needed to take some affirmative act to disavow

the criminal objective. Id. at 1129 (citing United States v. Mo-

rales, 655 F.3d 608, 640 (7th Cir. 2011)). Bolender’s whistle-

blower letter in October 2015 would be sufficient—but that

was still within the five-year statute of limitations at the time

of Newton’s trial. In her appellate brief, Newton even

acknowledges that the issue is “complicated.” Given all the

uncertainty, we cannot conclude that it was clear or obvious

that Bolender was protected from prosecution and therefore

the district court was required to reject her invocation of the

Fifth Amendment as improper. The court was not required to

do so under these circumstances.

No. 21-3270 13

III

We now consider Newton’s challenges to her sentence.

She challenges both the procedure used in calculating the sen-

tence and its substantive reasonableness. Newton’s proce-

dural challenge involves two parts: First, she argues that the

district court erred when it rejected her request for a down-

ward adjustment under U.S.S.G. § 3B1.2 as a minimal partici-

pant. Second, Newton believes that the court erred when cal-

culating Medicare’s loss attributable to her under U.S.S.G.

§ 2B1.1(b)(1). We review Newton’s procedural challenges,

which concern the district court’s assessment of the facts, for

clear error, United States v. Sanchez, 989 F.3d 523, 543 (7th Cir.

2021), and her challenges to the sentence’s reasonableness for

abuse of discretion, United States v. Morgan, 987 F.3d 627, 632

(7th Cir. 2021).

The Guidelines advise courts to decrease the offense level

if a defendant played either a minimal (four-level decrease) or

minor (two-level decrease) role in the criminal activity.

U.S.S.G. § 3B1.2. The “minimal participant” provision applies

to those who are “plainly among the least culpable of those

involved in the conduct of a group.” Id. § 3B1.2 cmt. n.4.

Meanwhile, the “minor participant” provision applies to

those “who [are] less culpable than most other partici-

pants … but whose role could not be described as minimal.”

Id. § 3B1.2 cmt. n.5.

The district court gave Newton a two-level reduction as a

“minor participant” in the conspiracy. Newton argues that

she qualifies as a “minimal participant” because she was a

low-level employee with no discretion over her work tasks,

lacked knowledge of some aspects of the scheme, had no de-

cision-making authority, and gained little from her

14 No. 21-3270

participation. But a defendant does not automatically qualify

as a minimal, or even minor, participant in a conspiracy just

because she did not reap substantial pecuniary gains. United

States v. Panaigua-Verdugo, 537 F.3d 722, 725 (7th Cir. 2008); see

U.S.S.G. § 3B1.2 cmt. n.3(A) (“A defendant who is accounta-

ble … for a loss amount … that greatly exceeds the defend-

ant’s personal gain … may receive an adjustment.” (emphasis

added)). Nor does a lack of decision-making authority or

knowledge of the entire plan require a downward adjust-

ment. See § 3B1.2 cmt. n.3(A) (“[A] defendant … who had lim-

ited knowledge of the scope of the scheme may receive an ad-

justment.” (emphasis added)). Rather, an important consider-

ation is whether the defendant played an essential role in the

conspiracy. United States v. Garcia, 580 F.3d 528, 538–39

(7th Cir. 2009) (“A defendant who was an essential part of a

conspiracy does not merit a role reduction simply because

other members of the conspiracy were more involved.”).

Here, the district court explained that although Newton

did not benefit financially, she was still regularly involved in

the criminal activity. And although she lacked knowledge

about some aspects of the scheme, that was only because she

purposely “[stuck] her head in the sand.” We see no clear er-

ror in this characterization of the facts. The advisory guide-

lines and our caselaw do not entitle Newton to more than a

minor participant reduction when she played an essential role

in the conspiracy’s day-to-day operations.

Newton’s argument that the district court erred in calcu-

lating the loss amount attributable to her has more traction.

Under the Sentencing Guidelines, a defendant’s base level is

increased according to the loss associated with the crime.

U.S.S.G. § 2B1.1(b)(1); United States v. Burns, 843 F.3d 679, 688

No. 21-3270 15

(7th Cir. 2016). “Loss” in § 2B1.1(b)(1) is defined as “the

greater of actual loss or intended loss.” § 2B1.1 cmt. n.3(A). In

this case, the parties and district court focused on only actual

loss, defined as the “reasonably foreseeable pecuniary harm

that resulted from the offense.” Burns, 843 F.3d at 688 (quoting

§ 2B1.1 cmt. n.3(A)(i)). In conspiracy cases, the guidelines al-

low for the offense conduct of other members to be attributa-

ble to the defendant, but that conduct also must have been

“reasonably foreseeable” to the defendant “in connection

with [the] criminal activity.” U.S.S.G. § 1B1.3(a)(1)(B). The

government has the burden to establish loss by a preponder-

ance of the evidence, but “a reasonable estimate will suffice.”

United States v. Gumila, 879 F.3d 831, 834 (7th Cir. 2018). For

Medicare fraud, a district court can reasonably count as loss

any money that Medicare would not have paid if not for the

fraud. See United States v. Dehaan, 896 F.3d 798, 808 (7th Cir.

2018). Together, this means that Newton can be held respon-

sible for all Medicare payments fraudulently obtained as a re-

sult of the fraud so long as the government can show that the

payments, and the conduct generating them, were reasonably

foreseeable to Newton.

The district court determined that Newton is responsible

for the entire actual loss of $6.3 million that the court found

the conspiracy caused. The district court landed on its esti-

mate by accepting the government’s argument that the en-

tirety of Medicare’s billing during the conspiracy (roughly $7

million) should be counted less a 10% deduction to account

for the possibility that some of Care Specialists’ charges to

Medicare had been legitimate. According to the court, the tes-

timony of five Care Specialists employees in particular—

Onate, Fia Rivera, Melanie Onal, Michelle Santos, and An-

thony Demata—“supported that the overarching purpose of

16 No. 21-3270

[Care Specialists’] operation was Mr. Echavia’s fraudulent

scheme.” But their testimony does not support such a sweep-

ing finding.

While Onate testified extensively about the fraud that he

observed, he only ever implicated Ferdinand and himself, not

any other Care Specialists nurses. He explained that, after pa-

tient visits, he would fill out documentation claiming his pa-

tients were worse off than they really were, requiring addi-

tional care. Onate clarified that about 90% of his patients, in

his estimation, were not homebound and therefore did not

qualify for Medicare reimbursement. Further, he testified to

having been asked by a few patients about being paid, allud-

ing to them possibly receiving kickbacks, also something that

would make the visits ineligible for reimbursement. While he

said that he observed pre-signed blank patient notes in New-

ton’s possession, those notes bore only Ferdinand’s signature.

And after Ferdinand was excluded from participating in

Medicare, he would accompany only Onate on patient visits.

Onate’s testimony supports a conclusion that a significant

amount of work that Onate and Ferdinand did was in pursuit

of fraudulent Medicare reimbursements. But there were at

least six other nurses who worked at Care Specialists during

the relevant time and Onate connected none of them to the

fraud.

Other witnesses likewise did not connect the vast majority

of the nurses, or their work, to the fraud. For instance, Rivera,

Onal, Santos, and Demata—all support staff who worked in

the Care Specialists office with Newton—testified that they

saw Newton filling out Ferdinand’s patient notes, but none

said that she did the same thing for other nurses. Indeed, Onal

confirmed that she never saw anyone else ever fill in patient

No. 21-3270 17

notes for nurses. And when Rivera testified about Medicare

rejecting claims because the claims asserted homecare was

provided on a date the patient was actually hospitalized, she

linked “only one nurse” to the issue: Ferdinand. None of these

four witnesses ever implicated any nurses other than Ferdi-

nand as engaging in fraud.

Again, this testimony reasonably supports a finding that

most patient work performed by Onate and Ferdinand was

not eligible for reimbursement by Medicare. But this repre-

sents a minority of the nursing staff, and we have no indica-

tion what portion of Medicare claims Onate’s and Ferdi-

nand’s patients represented. The record, then, does not estab-

lish what proportion of the $7 million reimbursed by Medi-

care was for work performed by Ferdinand and Onate as op-

posed to the unimplicated nurses. 2 For us to conclude that the

entire operation was fraudulent, except for 10%, we would

have to speculate that nearly all nurses at Care Specialists, not

just the handful of individuals identified by the government’s

2 In some cases, these potentially legitimate services might be tainted

by the fraud if they were billed on behalf of a company owned by an indi-

vidual subject to an exclusion that prevented any healthcare company

merely associated with the individual from billing Medicare. See United

States v. Triana, 468 F.3d 308, 320 (6th Cir. 2006). Here, however, Ferdinand

transferred ownership of the company to his wife after his exclusion, and

the exclusion “prohibited [Ferdinand] from submitting and causing

claims to be submitted to [Medicare] for items or services which [he] pro-

vide[d]” or from indirectly doing work for services—such as by providing

administrative, clerical, and other activities—provided to patients that

Medicare would be charged for. Specifically, the government would not

pay “for any items or services furnished, ordered, or prescribed by [Ferdi-

nand] in any capacity.”

18 No. 21-3270

witnesses, were involved in the same fraudulent activities as

Ferdinand and Onate.

The government contends this would not be speculation,

but rather in accordance with Gumila where we accepted as

reasonable the district court’s loss estimate based in part on

an assumption that the entirety of the operation was fraudu-

lent. But in Gumila, the district court considered evidence that

the defendant had an express policy instructing her employ-

ees to only use the highest billing codes for all patients, re-

gardless of the services rendered. 879 F.3d at 835. Similarly,

Gumila instructed her employees to claim patients as home-

bound when they were not. Id. at 833. These universal policies

gave the court a starting point to assume that nearly all pa-

tient visits had been fraudulently coded or did not otherwise

qualify for Medicare reimbursement. Id. at 835–36.

Here, by contrast, there was no evidence of a similarly ex-

plicit, universal policy. The government presented evidence

of significant fraud, but not evidence tainting all Medicare re-

imbursements. It proved that two out of the eight nurses at

the company engaged in fraud. We can reasonably conclude

that a significant amount of Onate’s and Ferdinand’s home-

bound patient care was ineligible for Medicare reimburse-

ment because Ferdinand was ineligible to participate in Med-

icare, the patients were not homebound, Newton billed for

unnecessary or nonexistent care, or the patients were receiv-

ing kickbacks. But this does not equate to, nor does anything

suggest there existed, a universal policy instructing other

nurses to engage in such fraud. Instead, we would have to

speculate on the existence of a policy encouraging fraud be-

cause of Ferdinand’s role at the company.

No. 21-3270 19

The district court seemed to do just that by pointing to Fer-

dinand’s penchant for fraud and the integral role he played in

Care Specialists’ operations throughout the period of fraud,

from 2011 to 2017. But after Ferdinand’s exclusion from Med-

icare in 2014, his role seemed to be diminishing. The evidence

shows he provided care only to Onate’s patients during that

period, not that he was otherwise involved in the care for all

patients. The record does not support an assumption that 90%

of billed care after 2014 was ineligible for Medicare reim-

bursement.

As for the period before Ferdinand’s exclusion, there is lit-

tle evidence to suggest that 90% of all that patient care was

ineligible for reimbursement either. Santos testified that when

she began working for Care Specialists in 2013, Ferdinand

was the only nurse performing admissions. But this in and of

itself does not make reimbursement fraudulent. Before 2014,

Ferdinand was not excluded from Medicare so his involve-

ment in admitting patients would not be a problem. And the

record generally shows that he engaged in fraud with the pa-

tients he directly cared for, not necessarily with all patients he

admitted and subsequently assigned to other nurses. While

Onate testified that 90% of his patients were not homebound,

nobody suggested a similar level of patients seen by other

nurses were ineligible. For instance, another nurse told inves-

tigators that maybe up to 50% of his patients were not home-

bound. 3 The reasonable conclusion is that the Echavias fun-

neled significantly more ineligible patients to the one nurse

3 Nurse Ericson Magno, who did not testify, initially told investigators

that 5%-10% of his patients were not homebound before later estimating

up to 50% were not homebound. He explained the difference depended

on how he interpreted the definition of homebound.

20 No. 21-3270

who had shown willingness to engage in fraud, while other

nurses generally received a higher proportion of patients eli-

gible for Medicare reimbursement.

Based on these facts, only speculation can support the dis-

trict court’s starting presumption that 90% of Medicare reim-

bursements to Care Specialists were fraudulent, regardless of

which nurse performed the care. The calculation of the loss

amount attributable to Newton was, therefore, clearly errone-

ous. See United States v. Nelson, 774 F.3d 1104, 1107 (7th Cir.

2014) (“A defendant is entitled to have sentencing determina-

tions made based on reliable evidence rather than speculation

or unfounded allegations.”).

The government argues that even so, any error was neces-

sarily harmless. But “[a]n error in calculating the sentencing

guideline range is a procedural error that requires remand

unless the government can show that the error is harmless.”

United States v. Black, 815 F.3d 1048, 1056 (7th Cir. 2016). The

government’s burden at this point is “to show that the sen-

tence would have been the same absent the error.” Id. The

government asserts that the error is harmless because Newton

cannot show that the loss amount attributed to her would

have been less than $3.5 million. See U.S.S.G. § 2B1.1(b)(1)(J)

(offense level increase the same for loss amount between $3.5

and $9.5 million). But the government misunderstands who

has the burden to show that the sentence would have been the

same, and it does nothing to attempt to explain what the

proper loss calculation should be. This is a far cry from those

cases where we held harmless an improper loss amount anal-

ysis because the record clearly indicated what the proper

amount should have been. See United States v. Hussein,

No. 21-3270 21

664 F.3d 155, 160–61 (7th Cir. 2011); United States v. Frith,

461 F.3d 914, 918 (7th Cir. 2006).

Because we find that the district court erred procedurally,

we must remand for resentencing. We leave to the district

court’s sound discretion whether revisiting the loss amount

requires reexamining its restitution order. Additionally, be-

cause we are reversing on procedural grounds, we need not

consider the substantive reasonableness of Newton’s sen-

tence. See United States v. Lucas, 670 F.3d 784, 789–90 (7th Cir.

2012) (“Our review of sentencing decisions proceeds through

a two-step inquiry … [and] if we determine there was no pro-

cedural error, we then examine the substantive reasonable-

ness of the sentence itself.” (cleaned)).

IV

For the above reasons, we AFFIRM Newton’s conviction,

but VACATE her sentence and REMAND for the district

court to reconsider the loss amount attributable to her.