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United States v. Skaff

United States District Court, S.D. West Virginia, Charleston Division

December 14, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
ANTOINE E. SKAFF, Defendant.

          MEMORANDUM OPINION AND ORDER

          JOSEPH R. GOODWIN, JUDGE.

         I. Background

         Dr. Antoine Skaff used the privilege of a dental license to engage in thousands of individual acts of fraud charged by the United States as one fraudulent scheme. This case began in 2015 when an unnamed individual filed a complaint with the United States Drug Enforcement Agency (“DEA”) reporting that a high volume of patients were only briefly visiting Dr. Skaff's dental office. In late 2015, the DEA referred the investigation to the West Virginia Board of Dental Examiners. During the investigation, the West Virginia Board of Dentistry received credible information that Dr. Skaff was improperly billing Medicaid based on an audit by Scion Dental, a provider network and administrator of the Medicaid dental benefits for the Managed Care Organizations (“MCOs”) under contract with West Virginia Medicaid. The West Virginia Board of Dentistry continued investigating Dr. Skaff based on this information. On July 20, 2017, Dr. Skaff entered into a Consent Decree and Order with the West Virginia Board of Dentistry, agreeing to a reprimand for his inappropriate opioid-prescribing practices and his fraudulent billing practices, and to a suspension of his license to practice dentistry, among other conditions.

         The charges before me are the result of further investigation of Dr. Skaff, jointly conducted by the United States Department of Health and Human Services/Office of the Inspector General, the DEA, the West Virginia Medicaid Fraud Control Unit, and the West Virginia Department of Health and Human Resources Bureau of Medical Services (on behalf of West Virginia Medicaid). This further investigation revealed that by August 31, 2016, Dr. Skaff had been engaged in an extensive fraudulent billing scheme for at least five and a half years. Dr. Skaff executed this scheme in two different ways. First, he engaged in “upcoding.” Second, he engaged in “double billing.” Between these two schemes, Dr. Skaff executed at least 7, 836 individual acts of criminal fraud against Medicaid.

         On July 17, 2017, the United States Attorney filed a single-count information against Dr. Skaff for health care fraud, in violation of 18 U.S.C. § 1347. Information [ECF No. 1]. On August 21, 2017, Dr. Skaff pleaded guilty to the information. Written Plea of Guilty [ECF No. 9]. At the December 7, 2017 sentencing hearing, I sentenced Dr. Skaff to sixty (60) months' imprisonment followed by three (3) years' supervised release. I articulate my reasons for imposing this sentence below.

         II. The Advisory Guideline Range

         In imposing sentence, a district court “must treat the [United States Sentencing] Guidelines [(“Guidelines”)] as the starting point and the initial benchmark.” Kimbrough v. United States, 552 U.S. 85, 108 (2007) (internal quotation marks omitted). Then, it must consider the sentencing factors set forth in 18 U.S.C. § 3553(a). I will begin by calculating the advisory Guideline range in this case.

         Dr. Skaff pleaded guilty to violating 18 U.S.C. § 1347. Since violations of that statute carry a statutory maximum penalty of ten (10) years' imprisonment, section 2B1.1(a)(2) of the Guidelines provides for a base offense level of 6.

         Several specific offense characteristics call for upward adjustments to Dr. Skaff's offense level. First, section 3B1.3 of the Guidelines mandates a two-level increase if the defendant “abused a position of public or private trust, or used a special skill, in a manner that significantly facilitated the commission or concealment of the offense.” The Fourth Circuit recognizes that medical providers, such as Dr. Skaff, are in a position of trust due to their relationship to Medicaid and its MCOs. United States v. Bolden, 325 F.3d 471, 505 (4th Cir. 2003). The parties agree that this enhancement applies. Plea Agreement 5 [ECF No. 10]. Therefore, I FIND that the section 3B1.3 enhancement applies, raising the offense level to 8.

         Second, section 3C1.1 of the Guidelines mandates a two-level increase if the defendant “willfully obstructed or impeded, or attempted to obstruct or impede, the administration of justice with respect to the investigation, prosecution, or sentencing of the instant offense of conviction and . . . the obstructive conduct related to . . . the defendant's offense of conviction and any relevant conduct.” Dr. Skaff altered patient charts in an attempt to conceal his double billing scheme from Scion Dental, which performed the audit of Dr. Skaff's Medicaid billings. Plea Agreement, Ex. B at 5. On account of that behavior, the parties agree that this enhancement applies. Plea Agreement 5. Neither party objects to the application of this enhancement in the presentence report. Therefore, I FIND that the section 3C1.1 enhancement applies, raising the offense level to 10.

         Third, section 2B1.1 of the Guidelines requires an enhancement based on the amount of “loss” caused by the defendant's fraudulent conduct. For the purposes of section 2B1.1, loss is defined as the greater of actual loss or intended loss. U.S. Sentencing Guidelines Manual § 2B1.1 cmt. n.3(A) (U.S. Sentencing Comm'n 2016) [hereinafter “U.S.S.G.”]. Actual loss means “the reasonably foreseeable pecuniary harm that resulted from the offense.” U.S.S.G. § 2B1.1 cmt. n.3(A)(i). Intended loss means “the pecuniary harm that the defendant purposely sought to inflict” and includes “intended pecuniary harm that would have been impossible or unlikely to occur.” U.S.S.G. § 2B1.1 cmt. n.3(A)(ii).

In a case in which the defendant is convicted of a Federal health care offense involving a Government health care program, the aggregate dollar amount of fraudulent bills submitted to the Government health care program shall constitute prima face evidence of the amount of the intended loss, i.e., is evidence sufficient to establish the amount of the intended loss, if not rebutted.

U.S.S.G. § 2B1.1 cmt. n.3(F)(viii). Finally, loss is reduced by “the fair market value of . . . the services rendered, by the defendant . . ., to the victim before the offense was detected.” U.S.S.G. § 2B1.1 cmt. n.3(E)(i); see United States v. Miller, 316 F.3d 495, 499 (4th Cir. 2003) (“[W]hen determining losses for sentencing purposes, a court must subtract the amount of money or benefits to which a defendant is legitimately entitled from the amount fraudulently claimed.”).

         In this case, Dr. Skaff fraudulently billed Medicaid a total of $1, 443, 570 and was fraudulently paid by Medicaid a total of $1, 391, 207. Dr. Skaff was legitimately entitled to $656, 130 for the services he actually rendered. This results in an intended loss of $787, 440 and an actual loss of $735, 077. See Miller, 316 F.3d at 504-05 (acknowledging “the common inference that the amount billed is the amount that is intended to be paid” and rejecting the defendant's argument that intended loss should be based on the amount paid, not the amount billed). I FIND that the loss caused by the defendant's conduct for purposes of calculating specific offense characteristics to be $787, 440. Under section 2B1.1(b)(1)(H), loss of more than $550, 000 but less than $1, 500, 000 mandates a fourteen-level enhancement. Therefore, Dr. Skaff's offense level rises to 24.

         Section 3E1.1(a) of the Guidelines mandates a two-level decrease if a defendant “clearly demonstrates acceptance of responsibility for his offense.” However, “[c]onduct resulting in an enhancement under [section] 3C1.1 (Obstructing or Impeding the Administration of Justice) ordinarily indicates that the defendant has not accepted responsibility for his criminal conduct. There may, however, be extraordinary cases in which adjustments under both [sections] 3C1.1 and 3E1.1 may apply.” U.S.S.G. § 3E1.1 cmt. n.4. (emphasis added). In the Fourth Circuit, “the question of whether a defendant who obstructed justice is entitled to an acceptance-of-responsibility reduction [is] a largely factual matter to be determined by the district court.” United States v. Knight, 606 F.3d 171, 176 (4th Cir. 2010).

         Here, Dr. Skaff's obstruction was relatively simple: during the investigation, he retroactively altered patients' charts in an attempt to hide his double billings from Scion Dental. There is a stipulation of facts wherein Dr. Skaff admits to this obstruction.

         At the sentencing hearing, the government stated that Dr. Skaff pleaded guilty to his offense of health care fraud only a month after the execution of a federal search warrant of his dental office. The government noted that this guilty plea resolved the criminal investigation of Dr. Skaff's fraudulent billing practices much more quickly than the average health care fraud case. The defendant also argued that he entered into a substantial civil settlement with the government and promptly paid a sum of $2, 205, 231. This sum provides full restitution to West Virginia Medicaid for its loss and double that amount to the United States as punishment. Therefore, I FIND that this case presents extraordinary circumstances for granting acceptance of responsibility. I grant the two-level reduction for acceptance of responsibility. At the sentencing hearing, the government moved for the additional one-level reduction under section 3E1.1(b), which I granted.

         Therefore, Dr. Skaff's total offense level is 21. Dr. Skaff has no criminal history, establishing a Criminal History Category of I. Given a total offense level of 21 and a Criminal History Category of I, the advisory Guidelines range is as follows: a term of imprisonment of thirty-seven (37) to forty-six (46) months; a term of supervised release up to three (3) years; a fine of $15, 000 to $1, 470, 154 (twice the pecuniary loss resulting from the defendant's conduct); restitution; and a $100 special assessment.

         III. Statement of Reasons

         Congress has identified four “purposes” of sentencing: just punishment, deterrence, incapacitation, and rehabilitation. 18 U.S.C. § 3553(a)(2). To achieve these ends, § 3553(a) requires sentencing courts to consider not only the advisory Guideline range, but also the facts of the specific case through the lens of seven factors. 18 U.S.C. §§ 3553(a)(1)-(7).

         A. The Nature and Circumstances of the Offense

         Describing Dr. Skaff's criminal behavior in this case as the offense is legally correct but misleading. In actuality, Dr. Skaff's habitual criminal behavior encompassed at least 7, 836 individual and deliberate acts of fraudulent billing to Medicaid over the course of more than five and a half years. To put this number in perspective, consider that between January 1, 2011 and August 31, 2016, there were a total of 2, 068 days, including weekends and holidays. This means that on average, assuming Dr. Skaff worked every day of the year, he was billing Medicaid for nearly four fraudulent transactions per day, for at least five and a half years. Moreover, each of Dr. Skaff's individual criminal exploits were contrived-i.e., not the spontaneous or natural consequence of a prior misdeed.

         Beyond the sheer volume of criminal acts that Dr. Skaff committed, the nature of each fraudulent transaction is blameworthy. Dr. Skaff had two distinct schemes for defrauding Medicaid. The majority of his fraudulent billings (7, 490 of 7, 836) were upcodings on tooth extractions. For this part of the scheme, when Dr. Skaff performed a simple tooth extraction on a patient, he represented in his claim to Medicaid that he performed a complex tooth extraction, usually an impacted tooth extraction. Medicaid pays more for impacted tooth extractions because they are more involved than simple extractions. Based on Medicaid's reimbursement rates, on each of these occasions, Dr. Skaff received between $92 and $105 more than he deserved for the extraction actually performed. The remaining 346 fraudulent claims constituted double billing. In those claims, by altering the location and/or date of service, Dr. ...


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