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U.S. v. Sherman

November 16, 1998


Before: Sloviter and Roth, Circuit Judges and FULLAM,*fn1 District Judge

The opinion of the court was delivered by: Roth, Circuit Judge.

On Appeal from the United States District Court for the District of New Jersey (D.C. Criminal Action No. 93-cr-00407)

Argued July 9, 1998


In this appeal, we are called on to further clarify the meaning of "a position of public or private trust," and "abuse" thereof in the context of a sentencing enhancement under § 3B1.3*fn2 of the United States Sentencing Guidelines. The defendant, Dr. Henry Sherman, pled guilty to 5 counts of mail fraud for mailing bills to a health insurance company for medical services that were never rendered. The trial court at sentencing found that Dr. Sherman occupied and abused his position of trust vis-a-vis the defrauded insurance company and accordingly enhanced his offense level by two levels pursuant to § 3B1.3 of the Sentencing Guidelines. We will affirm the judgment of the trial court.

I. Facts

Dr. Henry Sherman practiced medicine in East Orange, New Jersey. As part of an undercover investigation of Sherman for billing insurance companies for accident-related medical services that Sherman did not provide, investigators staged an accident and then sought treatment from Sherman for injuries that allegedly arose from that accident. Sherman proceeded to bill insurance companies for many times the actual number of office visits made by each patient and also for equipment he did not provide. Furthermore, Sherman had each patient sign an affidavit prior to receiving treatment in which the patient swore that he had read defendant's bill and certified that it was correct. In addition, Sherman created false progress notes and records of therapy visits; he kept these false records in each patient's file and submitted to insurance companies when requested.

Sherman was charged in a ten count indictment. Counts One through Nine charged him with mail fraud, in violation of 18 U.S.C. § 1341 and 2. Count Ten charged him with witness tampering, in violation of 18 U.S.C. § 1512(b) and 2. On November 30, 1995, Sherman pled guilty to five counts of mail fraud. The parties stipulated that the base offense level was 6, that the loss attributable was between $70,000 and $120,000 resulting in a six level increase, that the offense involved more than minimal planning and defrauded more than one victim, that Sherman obstructed Justice, that he was an organizer or leader, and that he had accepted responsibility. In addition, following a sentencing hearing, the trial court awarded a two level enhancement to Sherman's base offense level pursuant to § 3B1.3, finding that he abused a position of trust. Sherman's final offense level was 17 and his criminal history category was I. The court sentenced him to 30 months' imprisonment on each of the five counts, to be served concurrently, and three years' supervised release. This was within the resulting Guidelines range of 24 to 34 months. In addition, Sherman was ordered to pay a fine of $50,000, restitution of $27,302.40, and a special assessment of $250. Sherman filed a timely notice of appeal.

The trial court had jurisdiction pursuant to 18 U.S.C. § 3231. We have jurisdiction over Sherman's appeal pursuant to 28 U.S.C. § 1291 and 18 U.S.C.§ 3742. We review de novo the legal question of whether a position is one of trust under § 3B1.3 of the Guidelines, and we review for clear error whether a defendant abused that position. United States v. Sokolow, 91 F.3d 396, 411 (3d Cir. 1996), cert. denied, 117 S. Ct. 960 (1997).

II. Discussion

Sherman argues on appeal that the district court erred in granting a two level enhancement to his base offense level because he did not abuse a position of public or private trust as defined in § 3B1.3. The inquiry into whether a defendant was appropriately subject to a § 3B1.3 enhancement is two-fold. First, the court must determine "whether a defendant was placed in a position of trust." United States v. Craddock, 993 F.2d 338, 340 (3d Cir. 1993), and second, if he was, "whether he abused that position in a way that significantly facilitated his crime." Id.

To determine whether a position of trust exists, we consider three factors:

"(1) whether the position allows the defendant to commit a difficult-to-detect wrong; (2) the degree of authority to which the position vests in defendant vis-a-vis the object of the wrongful act; and (3) whether there has been reliance on the integrity of the person occupying the position." United States v. Pardo, 25 F.3d 1187, 1192 (3d Cir. 1994).

We have explained that " `[t]hese factors should be considered in light of the guiding rationale of the section -- to punish `insiders' who abuse their position rather than those who take advantage of an available opportunity.' " Sokolow, 91 F.3d at 413 (quoting Pardo, 25 F.3d at 1192). ...

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