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United States v. Babaria

United States Court of Appeals, Third Circuit

December 31, 2014

UNITED STATES OF AMERICA
v.
ASHOKKUMAR BABARIA, Appellant

Argued: November 18, 2014

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY D.C. Crim. No. 2-12-cr-00646-001 District Judge: Honorable Claire C. Cecchi

Joseph D. Mancano, Esq. (Argued) Counsel for Appellant

Mark E. Coyne, Esq. Office of United States Attorney, Glenn J. Moramarco, Esq. (Argued) Counsel for Appellee

Before: SMITH, HARDIMAN and BARRY, Circuit Judges

OPINION

BARRY, Circuit Judge

In this appeal, we are asked to consider whether the medical director and manager of a Medicare and Medicaid provider who supervised the payment of kickbacks occupied a position of trust for purposes of U.S. Sentencing Guidelines Manual § 3B1.3 (2013), which provides for a two-level upward adjustment in offense level for abuse of a position of trust. We hold that on the facts of this case, the District Court properly applied the adjustment, and that neither of the two remaining issues raised by Appellant has merit. We, therefore, will affirm the judgment of sentence.

I.

Dr. Ashokkumar R. Babaria was a licensed radiologist and the medical director and manager of Orange Community MRI, LLC ("Orange"), an authorized Medicare and Medicaid provider[1] offering diagnostic testing, including Magnetic Resonance Imaging (MRI), Computed Tomography (CT) scans, and ultrasounds. In 2012, Dr. Babaria pleaded guilty to one count of making illegal payments—kickbacks—in violation of 42 U.S.C. § 1320a-7b(b)(2)(A) (the "anti-kickback statute"). He acknowledged that, from 2008 through 2011, he paid physicians to refer their patients to Orange for diagnostic testing, and that he billed Medicare and Medicaid for diagnostic testing that was tainted by these corrupt referrals. As a result, Orange received $2, 014, 600.85 in payments from Medicare and Medicaid that were directly traceable to the kickback scheme. There is no evidence, however, that Dr. Babaria falsified patient records, billed Medicare or Medicaid for testing that was not medically necessary, or otherwise compromised patient care.

At sentencing, Dr. Babaria objected to the Pre-Sentence Investigation Report ("PSR"), which recommended that he receive a two-level adjustment for abuse of a position of trust pursuant to § 3B1.3, and a four-level adjustment for aggravating role pursuant to § 3B1.1(a), resulting in a recommended Guidelines range of 70-87 months' imprisonment. Ultimately, the Guidelines range as calculated in the PSR was 60 months, capped as it was by the statutory maximum for Dr. Babaria's count of conviction. He argued, however, that the sentencing adjustments were unwarranted and that the correct range was 37 to 46 months. Following oral argument on these and other issues, at sentencing the District Court applied both adjustments but granted a downward variance and sentenced Dr. Babaria to 46 months' imprisonment, a fine of $25, 000, and a three-year term of supervised release. The Court also ordered him to forfeit the $2, 014, 600.85 he conceded had been paid by Medicare and Medicaid.

II.

Dr. Babaria argues that the District Court erred in applying the two-level adjustment under § 3B1.3 because he neither occupied nor abused a position of public or private trust. That Court had jurisdiction pursuant to 18 U.S.C. § 3231, and we have jurisdiction pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a). 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. Sherman, 160 F.3d 967, 969 (3d Cir. 1998). While the standard by which a court must analyze whether a defendant's conduct fits within the § 3B1.3 adjustment is well settled in our Court, whether the adjustment was properly applied under the factual circumstances of this case presents an issue of first impression.

Section 3B1.3 provides for a two-level upward adjustment in offense level where a defendant "abused a position of public or private trust . . . in a manner that significantly facilitated the commission or concealment of the offense." Application note one defines "public or private trust" as follows:

"Public or private trust" refers to a position of public or private trust characterized by professional or managerial discretion (i.e., substantial discretionary judgment that is ordinarily given considerable deference). Persons holding such positions ordinarily are subject to significantly less supervision than employees whose responsibilities are primarily non-discretionary in nature. For this adjustment to apply, the position of public or private trust must have contributed in some significant way to facilitating the commission or ...

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