Submitted: February 15, 2019
from United States District Court for the District of
Minnesota - St. Paul
LOKEN, COLLOTON, and KELLY, Circuit Judges.
Belfrey pleaded guilty to one count of conspiracy to defraud
the United States and one count of failure truthfully to
account for and pay over withheld taxes. The district
court varied below the United States Sentencing
Guidelines range and sentenced him to 96 months of
imprisonment. Belfrey challenges his sentence as procedurally
and substantively unreasonable. Having carefully considered
the issues, we affirm.
1994 until at least the end of 2013, Belfrey and his brother,
Roylee Belfrey, controlled several home healthcare businesses
providing personal care attendant (PCA) services. These PCA
services are reimbursable by the Medicare and Medicaid
programs funded jointly by the U.S. government and the state
of Minnesota. Reimbursable PCA services include light
housework, personal hygiene assistance, and food preparation.
2000, the Minnesota Attorney General opened an investigation
into fraudulent billing by one of Belfrey's companies.
Criminal charges in state court followed, and in 2003 Belfrey
pleaded guilty to felony-level fraud against the Medicaid
program. He was sentenced to 60 days confinement and 20 years
of supervised probation. The following year, the U.S.
Department of Health and Human Services and the Minnesota
Department of Human Services (DHS) ordered Belfrey's
indefinite exclusion from participating in Medicare and
Medicaid programs as a result of his conviction.
his exclusion, Belfrey continued to control at least one PCA
business receiving government funds for almost a decade.
Belfrey's unauthorized role within the company was
extensive. He hired and fired employees; issued policies;
directed the spending of money; controlled bank accounts;
covertly directed communications with state agencies; and
dealt with vendors, banks, and payroll processors. From the
time of his exclusion until the end of 2013, the state of
Minnesota paid Belfrey's business more than $18 million
for PCA services. Belfrey's personal profit was more than
of his control of the company, Belfrey, along with his
brother, who managed a separate healthcare entity, hired
Kenneth Harycki, who would then assist the Belfrey brothers
in committing tax fraud. Beginning in 2007, Harycki
repeatedly prepared and filed tax forms falsely stating that
the Belfreys' businesses were tax-compliant. In reality,
between 2007 and 2013, the Belfreys failed to pay to the
federal government more than $4 million in withheld taxes.
2014, Belfrey and his brother were indicted on one count of
conspiracy to defraud the federal government and one count of
healthcare fraud. In February 2017, the fourth and final
superseding indictment charged the Belfrey brothers and
Belfrey's wife with 43 counts of conspiracy to defraud,
tax fraud, and money laundering. Belfrey pleaded guilty to
two counts: conspiracy to defraud the United States, in
violation of 18 U.S.C. § 286, and failure truthfully to
account for and pay over withheld taxes, in violation of 26
U.S.C. § 7202 and 18 U.S.C. § 2. The factual basis
underlying Belfrey's conviction for conspiracy to defraud
was his continued participation in a Medicare- and
Medicaid-funded business despite his exclusion.
sentencing, the district court calculated a Guidelines range
of 151 to 180 months of imprisonment-driven by Belfrey's
conspiracy conviction-and sentenced him to 96 months for the
conspiracy and 60 months for the tax offense, to be served
concurrently. It also ordered three years of supervised
release and restitution of $4, 592, 593.74 to the Internal
Revenue Service (IRS) for the tax offense and $4, 351, 443.08
to the Minnesota DHS for the conspiracy, comprising the
amount of Belfrey's personal profit derived from that
offense. Belfrey appeals, challenging his sentence as
procedurally and substantively unreasonable.
reviewing a challenge to a sentence, we first ensure that the
district court committed no procedural error, such as
improperly calculating the Guidelines range. United
States v. Feemster, 572 F.3d 455, 461 (8th Cir. 2009)
(en banc). In so doing, we review the district court's
factual findings for clear error and its application or
interpretation of the Guidelines de novo. United States
v. Petruk, 836 F.3d 974, 976 (8th Cir. 2016). If we find
no procedural error, we then consider the substantive
reasonableness of the sentence under an abuse-of-discretion
standard. Feemster, 572 ...