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USA v. Ronald E. Wayland, 08-2194.  A jury found Ronald E. Wayland guilty of making false statements relating to health care matters, in violation of18 U.S.C. §§ 1035(a)(2), 24(b). At sentencing, the district court concluded that Mr. Wayland used “sophisticated means” to perpetrate the fraud and, accordingly, applied a two-level upward adjustment to his offense level, see U.S.S.G. § 2B1.1(b)(9).

The district court sentenced Mr. Wayland to 41 months’ imprisonment; Mr. Wayland filed a timely notice of appeal. Because the district court did not clearly err in determining that Mr. Wayland used sophisticated means to commit this fraud, we affirm the judgment of the district court.

The Illinois Department of Rehabilitation Services (“the Department”) oversees a program through which Illinois residents with disabilities can use Medicaid funds to pay for the services of in-home personal assistants and thereby avoid transfer to nursing homes. Dorothy Wayland, a program participant, was essentially incapacitated. Consequently, her son Ronald Wayland, acted on her behalf under a power of attorney. In that role, Ronald Wayland defrauded the Department of more than $108,000 by claiming that a man named Cyril Sturm was serving as his mother’s personal assistant.

The probation officer recommended a two-level upward adjustment under U.S.S.G. § 2B1.1(b)(9)(C) for Mr. Wayland’s use of sophisticated means to perpetrate the fraud. Mr. Wayland disputed that his conduct met this standard, but the district court stated: “If this wasn’t a sophisticated means of perpetrating a fraud, I don’t know what is.”

We review for clear error a district court’s finding that the defendant employed sophisticated means. United States v. Robinson, 538 F.3d 605, 607 (7th Cir. 2008).

The sentencing guidelines call for a two-level upward adjustment if an individual has perpetrated a fraud through sophisticated means. See U.S.S.G. § 2B1.1(9)(C). Application note 8 to U.S.S.G. § 2B1.1 states: ” ‘[S]ophisticated means’ means especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense.” The note goes on to provide several examples of such conduct, including the use of fictitious entities or corporate shells; but this list is not exhaustive and merely suggests the wide variety of criminal behavior covered by the guideline. United States v. Allan, 513 F.3d 712, 715 (7th Cir. 2008).

Offense conduct is sophisticated if it displays “a greater level of planning or concealment” than a typical fraud of that kind. See Robinson, 538 F.3d at 607-08 (finding defendant’s use of false contact information for check counterfeiting made the scheme sophisticated); United States v. Fife, 471 F.3d 750, 753-54 (7th Cir. 2006) (holding that the defendants’ use of detailed planning and more concealment than typical made the tax fraud sophisticated.)

We must decide whether Mr. Wayland’s crime involved a greater level of planning or concealment than the typical health care fraud case.

Mr. Wayland’s conduct was far more intricate than that in a typical health care fraud scheme.

Mr. Wayland also submits that, because he erred in the design and execution of his fraud, it could not have been sophisticated. He suggests that his admission that he shared an account with Sturm was foolish and that his forgeries must have been amateurish because investigators quickly were able to uncover the fraud. However, a sophisticated scheme need not exhibit intelligence or expertise. See Fife, 471 F.3d at 754.

It does not matter that Mr. Wayland might have done a better job perpetrating and concealing the fraud. See United States v. Madoch, 108 F.3d 761, 766 (7th Cir. 1997) (noting that, even though “more elaborate mechanisms” of concealing fraud were possible, the defendant nevertheless used sophisticated means to perpetrate fraud).

Nor does it matter that Mr. Wayland’s own sloppiness or errors of judgment may have contributed to the unraveling of his scheme. See United States v. Rettenberger, 344 F.3d 702, 709 (7th Cir. 2003). Mr. Wayland’s scheme displayed a greater level of planning and concealment than the typical health care fraud and its failings do not suggest that the district court clearly erred.


For the full opinions visit the 7th Circuit Court of Appeals Web Site.

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