United States v. Herod

* Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
United States Court of Appeals
Fifth Circuit
F I L E D
October 3, 2005
Charles R. Fulbruge III
Clerk
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 05-40089
Summary Calendar
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
MICHAEL L. HEROD,
Defendant-Appellant.
--------------------
Appeal from the United States District Court
for the Eastern District of Texas
USDC No. 1:03-CR-200-1
--------------------
Before SMITH, GARZA, and PRADO, Circuit Judges.
PER CURIAM:*
Michael L. Herod appeals his conviction and sentence for 13
counts of health care fraud and six counts of mail fraud. He
argues that the evidence was insufficient to establish that he
knowingly intended to defraud; that the district court erred in
finding that he abused a position of trust pursuant to U.S.S.G.
§ 3B1.2; that the amount of loss was improperly calculated under
the sentencing guidelines; that his sentence is unconstitutional
pursuant to United States v. Booker, 125 S. Ct. 738 (2005); and

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No. 05-40089
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that the district court abused its discretion in ordering the
restitution award.
Herod contends that the evidence did not establish his
criminal intent beyond a reasonable doubt because he testified
that he was distanced from the billing practices of his office
and that he had no knowledge of the office procedures regarding
Medicaid. However, Herod’s own testimony reflects a knowledge of
the Medicaid procedures and the office billing practices. Herod
stated that he was often not paid for the total amount billed to
Medicaid. He also stated that Medicaid accounted for 15 to 20
percent of his income.
Additionally, Herod’s dental license expired in April 1999.
Testimony from Diana Costello Stark and from Loren Barnes
established that Herod was aware of the expiration of his
license. As an enrollee in the Texas Medicaid Program, he had
been provided with a copy of the policies and procedures manual.
To participate in the program, a health care provider must be
licensed. Herod was required to inform the program if his
license expired and would no longer be entitled to participate.
Herod never informed the program of the expiration of his dental
license, and his license was not renewed. The evidence is
sufficient for a reasonable trier of fact to conclude beyond a
reasonable doubt that Herod possessed the requisite criminal
intent. United States v. Mendoza, 226 F.3d 340, 343 (5th Cir.
2000).

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No. 05-40089
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Herod also argues that the district court clearly erred in
applying an upward adjustment to his base offense level for
abusing a position of trust. It is established in this court
that an abuse of trust enhancement is appropriate where a
physician abuses the trust of his patients. See United States v.
Iloani, 143 F.3d 921, 923 (5th Cir. 1998). The argument that the
Medicaid program does not qualify as a victim is without merit.
Such programs rely on the honesty and integrity of doctors and
their “representations that the treatments for which the
companies are billed were in fact performed.” Iloani, 143 F.3d
at 923. The enhancement for abuse of trust is not clearly
erroneous. United States v. Angeles-Mendoza, 407 F.3d 742, 750
(5th Cir. 2005).
Herod contends that the amount of loss as used in the PSR
calculation for his total offense level is erroneous. There is
no evidence to establish that the amount of loss is below
$200,000. The district court’s finding is not clearly erroneous.
Angeles-Mendoza, 407 F.3d at 750.
With regard to the enhancements for abuse of trust and the
amount of loss, Herod asserts that they violate his Sixth
Amendment rights pursuant to Booker. He states that these facts
were not found by a jury and that he did not admit to them.
Herod articulated objections in the district court on these
grounds and cited to the decision of Blakely v. Washington, 542
U.S. 296 (2004). Therefore, this court will ordinarily vacate

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and remand for resentencing unless the Government can establish
harmless error beyond a reasonable doubt. United States v.
Pineiro, 410 F.3d 282, 284 (5th Cir. 2005).
The finding that the amount of loss was greater than
$200,000 was a fact found by the jury. The amount of loss was
alleged in the indictment, and the jury found the defendant
guilty as charged of all counts. Thus, the amount of loss is not
a Booker error. See Booker, 125 S. Ct. at 756. Nevertheless,
the finding by the district court that Herod abused a position of
trust does qualify as a Booker error, and the Government concedes
that it cannot establish harmless error beyond a reasonable
doubt. As such, the sentence must be vacated, and the case must
be remanded.
Herod asserts that the district court abused its discretion
in the amount of restitution awarded. He claims that he lacks
the ability to pay the award. Herod was ordered to pay
restitution pursuant to 18 U.S.C. § 3663A, which mandates
restitution. The district court must order the full amount of
restitution due the victim, without regard for the defendant’s
economic circumstances or ability to pay. United States v.
Myers, 198 F.3d 160, 168-69 (5th Cir. 1999). The district court
did not abuse its discretion in awarding restitution. See United
States v. Hughley, 147 F.3d 423, 436 (5th Cir. 1998).
Accordingly, Herod’s conviction is AFFIRMED. His sentence
is VACATED, and the matter is REMANDED for resentencing.

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