United States v. Luna, No. 18-1814 (8th Cir. 2020)
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In these consolidated appeals, Defendants Luna, Forthun, and Hussein were convicted of charges related to their membership in a recruitment-and-kickback scheme involving car-accident victims, a chiropractic clinic, and automobile insurers.
The Eighth Circuit held that the evidence was sufficient for a jury to conclude beyond a reasonable doubt that Forthun committed mail and wire fraud, that both Luna and Hussein were his accomplices, and that all three entered into a conspiracy to defraud insurers. The court also held that the district court failed to consider the possibility of offsets to Forthun's sentence and to the size of the restitution awards. Therefore, the court vacated Forthun's sentence and remanded for resentencing. However, the court held that the forfeiture order stands because the reimbursement for all 500 patients were "gross proceeds" of the fraud itself.
Court Description: [Stras, Author, with Loken and Shepherd, Circuit Judges] Criminal case - Criminal law and sentencing. In a scheme to defraud insurers under Minnesota's no-fault insurance system, the evidence was sufficient to establish a scheme to defraud and defendants' role in the scheme, and the evidence was, therefore, sufficient to support defendants' convictions for mail- and wire-fraud; the district court erred in calculating the amount of the loss in setting defendant Forthun's sentence because it failed to deduct the value of the legitimate, compensible services provided patients under the scheme; in sum, the offsets which should have been made could have made a difference in the length of Forthun's sentence and the size of his restitution award and his sentence is vacated and the matter remanded for resentencing; the government did not waive its right to seek forfeiture; the offset argument which applied to restitution does not apply to forfeiture because the focus in forfeiture is the gross proceeds traceable to the commission of the offense; the reimbursement for all of the patients were gross proceeds of the fraud, and the forfeiture was properly calculated on that basis.
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