In United States v. Solakyan, --- F.4th ---, No. 22-50023 (9th Cir. 2024), the Court (1) affirmed Sam Sarkis Solakyan’s conviction for (a) conspiracy to commit honest-services mail fraud and health-care fraud and (b) honest-services mail fraud and aiding and abetting; and (2) vacated the district court’s restitution order. Solakyan was the owner and operator of multiple medical-imaging companies that routed unsuspecting patients from complicit physicians and medical schedulers to his companies for superfluous magnetic resonance imagery (“MRI”) scans and other medical services.
The Court considered a host of challenges to the convictions and restitution order. Here are some of the key determinations.
We now hold that under Skilling and Milovanovic, honest-services mail fraud, as proscribed by 18 U.S.C. §§ 1341 and 1346, encompasses bribery and kickback schemes that deprive patients of their intangible right to the honest services of their physicians.
We must [] determine whether § 1346 requires the government to prove in a private-sector case that the victims of the fraudulent scheme suffered some kind of tangible harm as an element of the offenseWe [] hold that actual or intended tangible harm is not a necessary element for prosecution under §§ 1341 and 1346. Rather, the same elements required to prove honest-services fraud in a public-sector case, including fraudulent intent and materiality, apply in a private-sector case as wellThis brings us to Solakyan’s claim that the court erred in ordering a restitution amount that is distinct from the loss amount calculated for purposes of sentencing. The district court did not err. As we recently stated, “[t]here is no categorical rule that restitution must be equal to or less than the amount of loss found when applying Sentencing Guidelines § 2B1.1(b)(1) or similar loss-based Guidelines sections.” “A discrepancy, standing alone, does not establish legal error.” Accordingly, a court’s leniency on the loss calculation for sentencing purposes does not hamstring its discretion to impose a larger restitution order in an amount fully borne by a defendant’s victims.[T]he district court never explained why it did not deduct from the restitution order the value of medically necessary MRIs. This Court’s actual loss rule requires deducting from the total restitution amount the value of services for which insurers would have paid, absent Solakyan’s fraud. Such deductions include any medically necessary and otherwise lawful MRIs had the patients been insured—an analysis that the Government made and the court accepted for determining the “conservative” loss amount under the Sentencing Guidelines. We hold that the district court’s failure to make specific findings supporting its restitution amount, in particular as to offsets, was an abuse of discretion.We affirm Solakyan’s conviction but vacate the restitution order and remand to the district court to determine whether the total loss amount should be reduced, at least in part, by the cost of reimbursement for medically necessary MRIs the insurers would have incurred had Solakyan acted lawfully.
