Duran Sentencing Memo

8/4/2019 Duran Sentencing Memo

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UNITED STATESDISTRICTCOURTSOUTHERNDISTRICTOFFLORIDAMIAMI DIVISIONCASENO. IO-20767-CR-JLK

LTNITEDSTATESOFAMERICA,Plaintiff,

V.

LAWRENCES. DIIRAN, et al.,Defendants.

DEFENDANTLAWRENCE S.DURAN'SSUPPLEMENTALMEMORANDUM ON SENTENCING:VT]LNERABLEVICTIMS(Fla. arNo.133162)I INTRODUCTION

OnFriday, eptember,20t1,PlaintiffUnited tatesfAmerica("the overnment")in thiscaseiled a memorandum n sentencingD.E.294] n which it askedheCourt oimpose nDefendant awrenceS. Duran "Duran")an upward our (4) level"vulnerablevictim"adjustmentursuanto $3Al .1(b),United tates entencinguidelines.thebasis

1 Section A1.1(b),UnitedStates entencinguidelines,rovides:(I ) If thedefendantnewor should aveknown hatavictim oftheoffensewasavulnerable ictim, ncrease y 2 levels.(2) f (A) subdivision1) applies; nd B) theoffensenvolvedalpgenumberofwlnerablevictims, ncreaseheoffenseeveldeterminedndersubdivision1)by 2 additionalevels.

AvErruu coRpoRArEEmR, zoso t BrscayNE LVD.r.,- .o.15.ffi:LT"T: '?" . TELEpHoNE os-7sl?-z:'Ao ' TELEcoptER o5-7ee-zs4www.METscH.coM

Case 1:10-cr-20767-JLK Document 310 Entered on FLSD Docket 09/15/2011 Page 1 of 4


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for that equest as hecontentionhat hepersons hohadbeen ecruited o participatenthePartialHospitalization rogram"PHP";operatedyDefendant mericanTherapeuticCorporation"ATC") were nfirm or aged.

Duran,who haspleadedguilty to conspiracy nd substantive ffensesnvolvingMedicare fraud and money laundering, espectfullyurges the Court to reject theGovernment'svulnerable ictim" upwardadjustmentequestor the reason hatthesolevictim of Duran'smisconduct as he Government.

II DISCUSSIONAttached eretoasExhibit"A" is a oopyof thedecisionn UnitedStates . IAright,

I2F 3d70 6th ir .1993), ponwhichDuranelies.nWright, upra,heCourt fAppealsheld hat hepersonsecruited ythedefendanto file fraudulentncomeaxreturnswiththeInternalRevenue ervice adnotbeen vulnerableictims" or purposesf $ 3A1.1(b),

UnitedStates entencing uidelinesDefendantwasconvicted f conspiracyo defraudhe RS andof making false claims against he United States. Thegovemmentargues hat Defendant'scrimes claimed threevictims: he IRS, Bass,andGarrett. The harm o BassandGarrett s allegedby the governmento be the fact that theywere: l) madenstrumentalitiesf defendant'srime;and 2)subjecto the risk of criminalprosecution.Basswas furtherharmedbecause he ost $600due to her involvementwithdefendant.We believe hatwhile BassandGarrettmayhavebeen victimized"byWright n thesensehathemayhave akenadvantagef them,we donot believehat herwerevictimsofthe offense. Crimesoftenhave ingleaders ut that doesnotmake hoseoining them n thecriminalactivityvictimsof thecrime. Thedeterminationf who arevictimshingesupon he

2THE METSCH LAW RRM, PA .

AvErruRA CoRpoRATE CErrER, zOeO t BtscAyNE BLVD. SurrE 3O8, AvErrTFA, FL. 33 | OOI423 ' TELEPHONE 305'792'2540 ' TELECOPIER 305-792-254WWW,METSCH,COM



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elements f the offense,which in this caseareconspiringodefraudand defrauding he federalgovernment y presentingfalseor fictitiousclaims.Thepayment f falseclaimsharmsheU.S.Treasury, nd herefore, ll federalaxpayers;t doesnotharmco-conspiratorso the offense, uchasBassandGarrett.We hold thatBassand Garrettarenot victimsof defendant'sfraudon he RS. (Footnotesmitted)zF .3d at73-74-The oregoingationale pplieso his case:hevictimof Duran'smisconduct as he

Government,ot hepeoplewhowere ecruitedopopulate TC'sPCP. t is nconceivablethat,orpurposesf $3A1.1(b),UnitedStatesentencingGuidelines,theGovernmentcould

becorrectly haracterizedsa "vulnerable ictim".III CONCLUSION

TheGovernment'sequestor a our(4) evel vulnerable ictim"upwardadjustmentshouldbedenied.

Respectfully ubmitted,

THE METSCHLAW FIRM,P.A.Attorneys or Duran20801 iscayne lvd.,Ste. 08

LAWRENCER. METSCHFBN133162

jTHE METSCH LAW RRM, PA.

AvE[ruRA CoRl'oRATE CEFTER, 2OgO I Btsc yNE BLvD. SUrrE 3O8, AvErruil, FL. 33 | Ae | 423 ' TELEPHONE 3O5'7e2'254O ' TELECOPIER 305-792-254www.METscH.coM

Aventura.FL 33180-1423Telephone:305)792'Telecopier:1305)92-



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CERTIFICATEOFSERVICEI hereby ertiffthat,usingheDistrictCourt'sCIv{/ECFystem,ruecopies f the

foregoingmemorandumwere electronicallyserved his 15ft day ofcounselor all theparties n thiscase.

WRENCER. METSCH

A.t

THE METSCH LAW FIRM, PA.AVEMTRA CoRFoRATE CENTER, 2O8O I BtscayNE BLVo. SurrE 3O8, AvENruRA, FL. 33 | AO | 423 ' TELEPHONE 305-752'2540 ' TELECOPIER 305'792-2541

www.METscH.coM



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EXHIBIT 56r"

Case 1:10-cr-20767-JLK Document 310-1 Entered on FLSD Docket 09/15/2011 Page 1 of 6


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U.S. . Wright,12 F.3d70 (1993)

12 F.3d 70United StatesCourt of Appeals,Sixth Circuit.

UNITED STATESof America, plaintiff-Appellee,Major Junior WRIGHT, Defendant-Appellant.

Nos.93-3o5S,93-3119. ArguedNov. 18,1993. DecidedDec. 14,1993.

Defendantwas convicted n the United StatesDistrict Courtfor the SouthernDistrict of Ohio, S. Arthur Spiegel,J., ofconspiracy o defraudthe United States ntemal RevenueServiceby causing false income tax returns to be filedand making false claims against the United States inconnectionwith schemewhere defendant ecruitedothersto file fraudulentreturns.Defendantappealed.The Courtof Appeals,Kennedy,Circuit Judge,held that: (l) personsrecruited to file fraudulent retums were not ..vulnerablevictims" authorizingenhancementf baseoffense evel,and(2) sentencing djustment asedon relevantconduct hat isrnotelementof offenseof conviction could not be used oadjustsentence nhancementor lrrlnerablevictim.Remanded.West Headnotes5)I Criminal Law{i* ReviewDe Novo

Criminal Law+l* Sentencing

District court's application of SentencingGuidelines s reviewedde novo and supportingfactual findings are reviewed for clear error.U.S.S.G. 1Bl . l etseq. ,8 U.S.C.A.8 Cases hatcite this headnote

Sentencingand Punishmenti" Vulnerabilityof VictimSentencing Guideline enhancement to baseoffense level becauseof "vulnerable victim"applies only if alleged victim is victim ofdefendant'soffense of conviction. U.S.S.G. $3Al. l. 8 u.s.c.A.

3 Caseshat cite this headnote

Sentencing nd Punishment,dn-Vulnerabilityof Victim"Vulnerable victim" for which SentencingGuidelinesauthorizeenhanced aseoffenseevelis one who is harmed by conduct underlyingoffense of conviction. U.S.S.G. $ 34,1.1, lgU.S.C.A.4 Caseshat cite this headnote

Sentencingand Punishmentri* Vulnerabilitvof VictimTaxpayers who defendant recruited to claimfraudulent ncome tax retums were not victimsunder Sentencing Guideline enhancement obase offense level for "wlnerable victim,';conspiracy o defraud govemmentdid not harmcoconspiratorso offense.U.S.S.G. 3Al.l, lgU.S.C.A.4 Cases hatcite this headnote

Sentencing nd Punishmenttu,+Vulnerabilityof VictimDefendant'sharmful criminal conduct towardanother hat is not part of offenseof convictionmay not be consideredby sentencingcourtunder relevantconduct provision of SentencingGuidelines o supportenhancement aseduponfinding of vulnerable victim. U.S.S.G. S$1B1.3(a), B1.3, omment.backg'd.),A1.1, 8u.s.c.A.6 Cases hatcite this headnote

Attorneys and Law Firms*71 Robert E. Lindsay (briefed), Alan Hechtkopf,U.S.Dept. of Justice, Appellate Section, Tax Div., Patricia

Heffeman(argued),U.S. Dept. of Justice,Washington,DC,fo rU.S.Robert L. Abell (arguedand briefed), Lexington,KY, fordefendant-appellant.



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U.S. . Wright,12 F.3d70 (1993)

Before:KENNEDY, MILBURN, andGUY, Circuit Judges.OpinionKENNEDY, Circuit Judge,Defendantwas convictedof conspiracyo defraud heUnitedStates ntemal RevenueService(the "IRS") by preparing,causing to be preparedand causing to be filed incometax returns claiming fraudulent tax refunds in violationof 18 U.S.C. g 286, and of making false claims againstthe United States n violation of 18 U.S.C. g5 287 and2. Defendantappeals he sentence mposedby the UnitedStates District Court for the Southern District of Ohio;specifically, defendantcontests he applicationof UnitedStatesSentencingGuideline ("USSG") g 3Al.l, whichprovidesfor a two-level enhancement f the baseoffenselevelwhen hecrime nvolvesa "vulnerablevictim." For thereasons tatedbelow, we vacatedefendant's entence n allcountsofconviction and remand or resentencins.

I.Defendant developed a schemeto obtain fraudulent taxrefunds rom the IRS. Defendant reparedndividual ncometax returns,either n hisown nameor in the nameof a recruit,that claimeda falsedisproportionate ithholdingand a largerefund,which thenamed axpayerwasnot entitled o receive.Defendantattached raudulentForm W-2, Wage and TaxStatements,o support he false returnsand filed the refurnswith the IRS.On May 6, 1992,defendantwas charged n a seven-countindictment or conspiring o *72 defraud he IRS (Count )and or making alseclaimsagainst heUnited StatesCountsil-VII). In connectionwith the conspiracy, he governmentallegeddefendant repared, aused o beprepared ndcausedto be signedand filed returns n the namesof Carol Bass,Clara Ganett, James Donaldson, Kevin C. Payne, TinaM. Keith, Tonya M. Wallace and in his own name.Thesubstantiveounts ncludedclaims iled in defendant's ame(CountsII and VI), and in the names of Kevin C. Payne(Count III), Tina M. Keith (Count IV), Tonya M. Wallace(CountV), and JamesDonaldson CountVI!.Defendantwas convictedby ajury on all counts.The courtsentencedefendant o concurrent ifty-one month termsonCounts , VI and VII, which werepost-Guidelines ffenses,pursuanto theGuidelines.On the remainingcounts,all pre-Guidelines offenses,defendantwas sentenced o fiftv-one

month sentences n each, to be servedconcurrentlywitheachother and with Counts , VI andVIL Defendant imelyappealed.

il.I Defendant's ole issueon appeal s whether he DistrictCourt erred n applyingUSSG$3A1.1 o enhance efendant'sbaseoffense evel.We reviewtheDistrictCourt'sapplicationof the SentencingGuidelinesde novo, and its supportingfactual findings for clear enor. (JnitedStatesv. Muharnmad.948 F.2d 1449.1455 .6thCir.l99l), cert.denied,502U.S.1119.112 .Ct.1239"l7 L.8d.2d472 1992).Section ,{l.lprovides:

Vulnerable VictimIf the defendant knew or should have known that avictim ofthe offensewasunusuallyvulnerabledue o age,physicalor mentalcondition,or thata victim wasotherwiseparticularlysusceptibleo thecriminal conduct, ncrease y2 levels.

The enhancements not to be applied "if the offenseguideline specifically incorporates his factor." USSG $3A1.1,comment.n. 2) . Section Fl.l, theoffense uidelineused or offenses nvolving fraud or deceit,as in this case,doesnot incorporate he vulnerability of the victim of theoffense.In a sentencingmemorandum,he governmentargued hatthe enhancementndersection3A1.1shouldbe appliedas"[d]efendantchose hose hat he victimizedby this schemebecause hey wereparticularlyvulnerable n someway." Inits attempt o provevulnerability, hegovernment ontinued:

Tina Keith testified hat atthe time defendant ecruitedhershewas very young,only eighteen earsold. Kevin Paynewas only nineteenyears old at the time that defendantconvinced him to participate.Moreover, Payne was afull-time college student n need of money. Carol Basstestified that at the time that she signed "papers" atdefendant'snstruction,shewas down andout and neededmoney.Additionally, defendant bused ispositionof trustwith regard o Bass. Bass testifiedthat when shewas achild, defendantwas her park leader.Defendantusedhisinfluenceoverher to get her to signpaperswithout ettingher know what it was that she was signing, because eknew that she rustedhim. Finally, Clara Garrett estifiedthat at the time that she signed papersat defendant's

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U.S. . Wright,12 F.3d70 (1993)

requestshe was depressed nd in bed, despondent verher father's ecentdeath.Moreover,both Carol BassandClara Garrett were dependentupon public assistance.Defendantmanipulatedhese ndividuals,preyingon theirvulnerabilities in recruiting them to his scheme andtherefore heCourtshould ncrease is offense evel....Gov'tSentencingMemo at 9-10.The sentencing ourtagreedwith the govemment'sposition and applied the two-levelenhancement.Defendant's rgumenton appeal s two-fold. First he arguesthat Bass, Garrett, Keith and Payne are not victims forpurposes f section3A,1.1because1) there s no nexusbetween he allegedharmsufferedand defendant's ffenseofconviction; and(2) they eachbear some evel of culpabilityfor the crimes.Second, ven f considered ictims,theywerenot "unusuallyvulnerable"or "particularlysusceptibleo thecriminal conduct." *73 On appeal,hegovernment oncedesthat Keith and Payneare not victims for purposes f section3A . , Gov'tBr. at I 0, and ocusests argument n BassandGarrett.

A. Nexus2 We find merit in defendant's rgument hatsection3A1.1

is applicable only where the alleged victim is a victimof a defendant'sffenseof conviction.Section3A1.1 maybe invokedwhere a "victim of the offense" is "unusuallyvulnerable" or "otherwise particularly susceptible o thecriminal conduct" and a defendantselectsa victim basedupon this knowledge.An early versionof the commentaryaccompanying ection3A1.1 provided hat the adjustmentapplied to "any offense where the victim's vulnerabilityplayed any part in the defendant'sdecision to committhe offense."USSG$ 3Al.l. comment. n. l) (elfectiveNovember 1, 1987) (emphasis upplied).This note wassubsequentlymended o readas follows: "This adjustmentapplies to offenseswhere an unusually vulnerablevictimis made a target of criminal activity by the defendant."d.(effectiveNovember , 1989).Othercourts have held that a nexus s not required,.UnitedStates v. Yount. 960 F.2d 955-958 (.llth Cir.1992\ ("'vulnerablevictim' provision does not requirea vulnerablevictim who is a victim of the offenseof conviction"); UnitedStatesv. Roberson.872 F.2d 597 (.5thCir.), cert. denied,493U.S.861. 10S.Ct . 75.107L.Ed.2d 31 1989). heRobersoncourt relied upon the 1987commentary;and theYountcourtreliedupon heRobersondecisionn support fits

holding,despite he change n the commentary.Whether heamendment arrowed he definition of "victim" for purposesof section3A1.1 or whether t simply clarified its meaning,we hold thatthe anguage f section3A1.1 tselfrequireshatindividuals argeted y a defendant evictimsofthe conductunderlying heoffenseof conviction.3 The decisionof the SupremeCourt in Hugheyv. United^lrares.95U.S.411. 10S.Ct. 979. 09 .8d.2d4081990),is instructiveof what is meantby "victim of an offense."The Victim and Witness ProtectionAct (the *VWPA,,), lgU.S.C. $$ 3663, 3664,provides, nter alia, that a federal

court may order"a defendantconvictedofan offense"l to"make restitution o any victim of suchoffense."18 U.S.C.$ 3663(aX2).The VWPA containsno definitionof "victim."The SupremeCourt has held the VWPA coversonly victimswho areharmedby the defendant's onduct hat s thebasisofthe offenseof conviction.Hughelt.495 tJ.S.at 413. 10 S.Ct.at 198 . In reaching his conclusion, he Courtstated:

[A] straightforwardeadingof theprovisionsndicateshatthe referent of "such offense" and "an offense" is theoffenseof conviction....T]he repeatedocus n [section36631 n heoffense fwhich thedefendant asconvictedsuggestsstrongly that restitution as authorizedby thestatute s intended o compensate ictims only for lossescaused y the conductunderlying heoffenseofconviction.Id. at 416, 10S.Ct.at 1982.This reasonings consistentwith our conclusionhat section3A1.1'sadjustment aybe appliedonly when a victim is harmedby a defendant'sconduct hat serves s hebasisofthe offenseofconviction.Thus, or purposes f both the VWPA andsection3A1 1,a "victim" is onewho is harmedby the conductunderlyingthe offenseof conviction.

4 Defendantwas convictedof conspiracy o defraud heIRS and of making false claims against he United States.The government rgues hat defendant's rime claimed hreevictims: the IRS, Bass, and Garrett. The harm to BassandGarrett s allegedby the govemment o be the fact that theywere: l) made nstrumentalities f defendant'srime;and 2)subjectedo the risk of criminalprosecution. asswas urtherharmedbecause he ost $600 due to her involvementwithdefendant.2 We believe *74 thatwhile Bass and Garrettmay have been "victimized" by Wright in the sense hathe may have taken advantageof them, we do not believethat they were victims of the offense.Crimes often haveringleaders ut that doesnot make hoseoining them n thecriminal activify victims of the crime. The determination fwho are victims hingesupon the elementsof the offense,

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U.S. . Wright,12 F.3d70 (1993)

which in this caseare conspiring o defraudand defraudingthe federal govemmentby presenting false or fictitiousclaims.Thepaymentof falseclaimsharms he U.S.Treasury,and therefore,all federal taxpayers; t does not harm co-conspiratorso theoffense, uchasBassandGanett.We holdthat BassandGarrettarenot victims of defendant'sraudonthe RS.3

B. RelevantConduct5 Somecourtshaveheld hata defendant's armfulcriminal

conduct owards another hat is not a part of an offenseofconviction may be consideredby a sentencing ourt underthe relevantconductprovision of the Guidelines,USSG glBl.3, to support section A1.1 enhancement.ount.960F.2dat 957-58: UnitedStatesv. Smith. 930 F.2d 1450.1455(10thCir.),cert.denied,502U.S. 879. 12 S.Ct.225.116L.Ed.2d 182(1991);Roberson. 72 F.2d, t 608-09. Jnderthisprovision,

Unless otherwise speciJied, .. adjustments n ChapterThree including ection A1.1],shallbedeterminedn hebasis f the ollowing:

(1)(A) all acts and omissions committed, aided, abetted,counseled, ommanded, nduced,procured,or willfullycaused y the defendant;

that occurred during the commissionof the offense ofconviction, n preparationor that offense,or in thecourseof attempting o avoid detectionor responsibility or thatoffense;

(3) all harm that resulted from the acts and omissionsspecihedn subsectionsa)(l) and a)(2)above....

USSG$ 1B1.3(a) emphasis upplied). n determininghatthe relevantconductprovisionwas applicable o its decisionto apply the victim-relatedadjustment, he Robersoncourtmade referenceo the commentary o section1B1.3,whichprovidesthat "conduct that is not formally chargedor isnot an elementof the offense of conviction may enter nto

the determinationof the applicableGuideline Sentencingrange." Roberson.872 F.2d at 608-09(quoting USSG $1B1.3, comment. (backg'd)).T\te Yountcourt reached hesameconclusion, ut noted n passing hat "arguably,wherelanguagen ChapterThree of the guidelinesspecifically slimited to victims of the offense, elevantconductcannotbeapplicable."Yount.960 F.2dat 957.T\e Yountcourtdid notfurther analyzehis issue.We decline o follow this line of casesas section3A1.1"otherwisespecifies"certain restrictions o its application.Relevant commentary o section 181.3, which is notmentioned in either Roberson or Yount provides that"[s]ubsection (a) establishesa rule of construction byspecifuing, n theabsence f more explicit nstructionsn thecontext of a specific guideline, the range of conduct that isrelevant o determininghe applicable ffense evel...."USSG$ 1B1.3,comment. backg'd) emphasis upplied).n lightof our holding that the victim-relatedadjustmentof section3A1.1 appliesonly in caseswhere here s a victim of theoffense of conviction, we further hold that a court cannotapply the adjustmentbasedupon "relevantconduet" hat isnot anelement f theoffense f conviction. ection 81.3hasno applicationn a section Al.l adjustment.In sum,we conclude hat Bassand Garrettare not "victims"for purposes f section A1.1becauseheywerenot harmedby the offenseof conviction.We thereforedo not reach heissueof whether hey were"unusuallyvulnerable"victimsorwhether heywerevictims"otherwiseparticularlysusceptible*75 to the criminal conduct." We do note that the courtmadeno hndingson this issue, t foundonly that hey "werevulnerablepeople"; the court did not find that they wereunusuallyvulnerable.

III.Our holding appliesonly to the Guidelinescounts.However,we are advised hat the court ndicated ts desire o sentenceto concurrent erms on the Guidelinesand non-Guidelinescounts.Whether t will wish to do so in view of the lessersentencen the Guidelines ounts,we do not know. However,in view ofthat indication,we set aside he sentences n allcountsand REMAND all counts or resentencins.

FootnotesI Covered ffenses re imited o those nder heVWPA andspecificallynumeratedubsectionsf section 02of the FederalAviation ct of 1958, 9U.S.C. 1472.

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U.S. . Wrighl ,12F.3d 0 1993)

2aJ

Basseceived2'000 f theapproximately8,000axrefund he raudulentlylaimed. he RSwithheld totalof $2,600romsubsequentefunds.As we conclude that Bass and Garrett are not victims of defendant's offense of conviction, we do not addressdef-endant,sarzumentthat culpable parties to a crime may never be victims of such crime as a matter law.

Endof Document @2011ThomsonReuters. oclaim o originalU.S.Government orks.

ThomsonReuters.No claim o originalU.S.GovernmentWorks.


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