Fraudster Must Serve Time and Lose His Residence to Pay Restitution
Barry Zalma
Dec 27, 2023
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Post 4698
Armando Valdes appealed his 60-month sentence for health care fraud after he pleaded guilty. Valdes’s conviction and sentence arose out of his scheme to submit millions of dollars in fraudulent medical claims to United Healthcare and Blue Cross Blue Shield for intravenous infusions of Infliximab, an expensive immunosuppressive drug. These infusions, purportedly given to patients at Valdes’s medical clinic, Gasiel Medical Services (“Gasiel”), were either not provided or were medically unnecessary.
In United States Of America v. Armando Valdes, No. 22-12837, United States Court of Appeals, Eleventh Circuit (December 19, 2023) the Eleventh Circuit disposed of the arguments asserted by Valdes.
LOSS AMOUNT
Federal Courts sentence convicted defendants based upon offense levels set by federal statutes. The sentences are increased with the amount of “loss” caused by the offense. In Valdes’s case, his base offense level was increased by 22 levels because the district court found that the loss amount was $38 million, and thus more than $25 million.
Section 2B1.1(b)(1)(L) provides that a defendant’s base offense level is increased by 22 levels if the loss from the fraud offense was more than $25 million but less than $65 million. Intended loss includes harm “that would have been impossible or unlikely to occur.”
ANALYSIS
Valdes did not show the Eleventh Circuit that the district court’s loss amount of $38 million was clearly erroroneous. Valdes admitted that through Gasiel, he submitted approximately $33 million in fraudulent claims to United Healthcare and approximately $5 million in fraudulent claims to Blue Cross Blue Shield.
Even if United Healthcare was unlikely to reimburse Valdes for the entire amount billed or for duplicate claims those claims were nonetheless properly included in the intended loss amount. At the sentencing hearing, Valdes’s own fraud analyst testified that, even accounting for duplicate claims, the total loss amount was above $25 million, the threshold for the 22-level increase in Valdes’s offense level.
SOPHISTICATED MEANS ENHANCEMENT
If a defendant’s fraud offense involved sophisticated means, his offense level is increased by two levels. Whether conduct is sophisticated is based on the conduct as a whole, not on the individual steps. The Eleventh Circuit reviews a district court’s factual findings for clear error and its application of the guideline provision to those facts.
Since the Eleventh Circuit found no error in the district court’s application of the two-level sophisticated means enhancement that part of the sentence was affirmed. The Eleventh Circuit noted that Valdes operated an elaborate, years-long scheme to defraud insurance companies for expensive Infliximab infusions, obtaining over $7 million as a result. The large amount of money defrauded and the six-year period the scheme went undetected supported a finding of sophisticated means.
Valdes hid behind two licensed doctors, Hilario Isaba and Ramon Santiago, who claimed no ownership interest in Gasiel and did not prescribe Infliximab. In light of these facts, the district court properly applied a two-level sophisticated means enhancement.
FORFEITURE OF VALDES’S RESIDENCE
Valdes argued the district court erred by ordering the forfeiture of his home as substitute property. Valdes admitted, however, that as part of his plea agreement, he agreed to forfeit his primary residence as substitute property.
Valdes’s statements made during the plea colloquy are taken to be true. In these statements, Valdes acknowledged he had read and understood his indictment and plea agreement.
Because Valdes failed to show any plain error in the district court’s accepting his guilty plea as to the forfeiture allegations, he has not shown the district court erred in ordering the forfeiture of his primary residence as substitute property.
ZALMA OPINION
People who earn millions by defrauding health insurers find it difficult to believe that they were found guilty of a crime and were required to serve time in jail and pay restitution to their victims. Valdes admitted his crime only to be so shocked by his sentence that he filed an appeal to eliminate or reduce the sentence to the crimes he admitted by asserting a plea of guilty. He wasted the time of the trial court and the Eleventh Circuit and should have been punished further for attempting the appeal. He was lucky that the Eleventh Circuit only affirmed the sentence.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
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Happy Law Day
ZIFL – Volume 30, Issue 9 – May 1, 2026
Read the full article at https://www.linkedin.com/pulse/zalmas-insurance-fraud-letter-may-1-2026-barry-zalma-esq-cfe-2tywc, see the video at at and at https://zalma.com/blog plus more than 5300 posts.
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
ZIFL – Volume 30, Issue 9 – May 1, 2026
Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year and is written by Barry Zalma.
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Post number 5347
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