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United States v. McCormick

United States District Court, M.D. Tennessee, Nashville Division

February 7, 2017

UNITED STATES OF AMERICA,
v.
TROY MITCHELL MCCORMICK, Defendant.

          MEMORANDUM AND ORDER

          Marvin E. Aspen United States District Judge.

         This 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.

         After 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 months imprisonment.

         BACKGROUND

         The 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.

         A. Crime of Conviction

         McCormick 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.)

         In 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.)

         McCormick 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. (Id.)

         B. Original PSR

         Following 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, 45.)

         In 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.

         C. September 20, 2016 Sentencing Hearing

         We held 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. at 17.)

         With 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 particular situation?
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 ...

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