United States District Court, M.D. Tennessee, Nashville Division
MEMORANDUM AND ORDER
E. Aspen United States District Judge.
matter is before us for the sentencing of Defendant Troy
Mitchell McCormick, who pled guilty to two counts of wire
fraud, 18 U.S.C. § 1343 (Counts Two and Three), and one
count of mail fraud, 18 U.S.C. § 1341 (Count Nine), on
March 29, 2016. (See generally Plea Agreement, Dkt.
No. 37.) Following completion of a presentence investigation
report (“PSR”) and submission of sentencing
positions and sentencing memoranda, we held a sentencing
hearing on September 20, 2016. As detailed below, that
hearing was continued to January 10, 2017. We requested that
the United States Probation Office conduct additional
presentence investigation and invited additional briefing
from the parties in order to investigate and address a number
of apparent misstatements and misrepresentations McCormick
made during the September 20, 2016 hearing.
considering all of the evidence, the testimony presented at
both the September 20, 2016 and the January 10, 2017
sentencing hearings, the PSR and two supplements thereto, the
initial and subsequent related filings by the parties, and
the arguments presented by counsel, we address whether
adjustments to the advisory guideline range are warranted
here under the United States Sentencing Guidelines
(“U.S.S.G.”) for obstruction of justice under
§ 3C1.1 and acceptance of responsibility under §
3E1.1. For the reasons that follow, we adopt the second
supplemental PSR and determine application of § 3C1.1 is
proper here, but we decline to apply credit for acceptance of
responsibility under § 3E1.1 as advocated by
McCormick's attorney. After considering all of the
factors set forth in 28 U.S.C § 3553(a), we determine a
downward variance from the sentencing guideline range of 57
to 71 months to 46 months imprisonment, as advocated by the
parties, is reasonable and appropriate under the
circumstances. Accordingly, we sentence McCormick to 46
undisputed factual basis for McCormick's guilty plea is
set forth in detail in the plea agreement and will not be
fully repeated here. We discuss solely the facts relevant to
the sentencing issues before us as detailed below.
Crime of Conviction
was charged in a 14-count indictment with mail fraud, wire
fraud, and aggravated identity theft in violation of 18
U.S.C. §§ 1341, 1343, and 1028A, respectively.
(See Indictment, Dkt. No. 1.) McCormick engaged in
fraudulent conduct in connection with his employment at
Emdeon, a company headquartered in Nashville, Tennessee that
provided data and information services to hospitals, health
systems and other customers in the healthcare industry.
(Id. ¶ 1.) Emdeon hired McCormick as a sales
representative and a vice president for business development,
responsible for overseeing the accounts of certain Emdeon
customers located in Michigan. (Plea Agreement (Dkt. No. 37)
¶ 8.) Over the course of three years, he fraudulently
forged and fabricated contracts and contract addenda
involving Emdeon customers and submitted the forged contracts
to Emdeon. (Id.) Emdeon subsequently billed the
customers inflated amounts based on the fraudulent contracts,
and McCormick received increased commissions as a result of
the inflated billing. (Id.) In furtherance of this
scheme, his conduct included vastly inflating the monthly fee
customers agreed to pay Emdeon, forging the signature of
Emdeon customer employees, creating fabricated email accounts
and fictitious names of customer employees, and creating
counterfeit checks. (Id.)
total, McCormick fraudulently inflated the bills of Emdeon
customers by more than $625, 000, generating $107, 587 in
incentive compensation for himself. (Id.) After
Emdeon learned of McCormick's scheme, it reversed or
refunded any improper billing to its customers.
(Id.) Thus, the only financial harm was suffered by
Emdeon in the amount of the $107, 587 it paid McCormick in
commissions. (Id.) In addition to the fraudulently
obtained incentive compensation, McCormick also continued to
receive substantial salary from Emdeon, despite the fact
that, apparently unbeknownst to Emdeon, he had also started a
full-time job with another company. (Id.)
pled guilty on March 29, 2016 to two counts of wire fraud in
violation of 18 U.S.C. § 1343 and one count of mail
fraud in violation of 18 U.S.C. § 1341 and agreed to the
entry of a forfeiture judgment in the amount of $107, 587.
McCormick's March 29, 2016 guilty plea, the probation
office completed the PSR on August 12, 2016 and supplemented
it on September 13, 2016. The September 13, 2016 PSR
calculated an advisory sentencing guideline range of 33 to 41
months. While McCormick did not object to the guideline range
as calculated, he filed a sentencing memorandum arguing that
upon consideration of the factors set forth in 18 U.S.C.
§ 3553(a), a downward departure from the guidelines
range was warranted, such that he should only be sentenced to
a maximum term of five years of probation along with no less
than one year of house arrest. (See Dkt. Nos. 44,
relevant part, McCormick argued that a departure was
warranted and a non-custodial sentence was required based on
“his caretaking role for his wife, son and
mother.” (Dkt. No. 45 at 18.) McCormick stressed the
fact that he was the “primary caregiver for three
others, his wife, son and mother, ” (id. at 5,
18), who relied on his “solid income of approximately
$120, 000/yr. plus commissions” as well as his health
insurance-benefits he argued were particularly necessary for
his wife, who was battling cancer, (id. at 12, 17).
The PSR indicates McCormick reported to probation that he was
employed by Technosoft Corporation as a vice president of
business process management since July 2015. While he
reported that his employer was aware of the criminal charges
against him, McCormick did not have signing authority for the
company's business contracts.
September 20, 2016 Sentencing Hearing
a sentencing hearing on September 20, 2016. McCormick asked
that the court “punish [him] in [his] home” in
order to “continue to allow [him] to be a father to
[his] son and a caretaker and ensurer [sic] to [his]
wife.” (Tr. Vol. I-A (Dkt. No. 55) at 13-14.) McCormick
represented that “[o]n her own, my wife can't raise
or take care of [my son]. Due to the side effects of her
treatment, she's not even allowed to lift five pounds. So
it's very difficult at times to - to live our daily
life.” (Id. at 14; see also Id. at
15-16.) He further testified “I'm the only source
of income for my family. They're all under my insurance,
and the loss of either income or insurance will have an
extremely devastating effect on my family and their lives.
The loss of insurance alone would cause an extreme detriment
to my wife's life, more importantly.” (Id.
respect to his present employment, McCormick testified:
I've been successfully employed and have signed good,
legal contracts. My doing so, I have removed myself from
signature authority to my -- with my current employer, so now
I can no longer sign contracts. I can only present them to
the president/CEO for him to sign.
THE COURT: How does your present employer feel about your
THE DEFENDANT: Not happy at all. He is of Indian descent. As
you know, sometimes it's very difficult to work for
people that are from out of the country. He is in this
country however, built a successful business for 26 years.
His feeling is if I am incarcerated, that he can no longer
continue my employment.
Your Honor, I wake up every -
THE COURT: Why did he take a chance on you? Did you tell him
right from the beginning what your situation was?
THE DEFENDANT: I told him when we pleaded, at ...