argues that the evidence shows that Community Medical Center has sustained no "loss" within § 2B1.1.
The Government argues first that we may attribute the total amount that Sodano received in bribes and kickbacks, $ 57,500, as a "loss" to Community Medical Center. Although the Government concedes that § 2B1.1 does not provide for such an analysis, they suggest that we look to Guideline § 2C1.1 ("Offering, Giving, Soliciting, or Receiving a Bribe; Extortion Under Color of Official Right) by analogy. Guideline § 2C1.1 provides that "loss" can be the "value of the benefit received." Government's Letter of March 1, 1993 (citing Sentencing Guideline § 2C1.1, Application note 2). Therefore, the Government has argued, we can use the amount of bribes admittedly taken by Sodano to assess the "loss" to Community Medical Center under § 2B1.1. The Government also argues that Sodano has admitted that he intended to receive over $ 60,000 in bribes from Apple Medical Systems, and that under § 2B1.1, the court can take into account intended loss as well as actual loss.
Under the circumstances, we reject this method of assessing loss under § 2B1.1. Sodano has argued persuasively that, insofar as the Government has stipulated in the plea bargain agreement that § 2B1.1 is the relevant guideline section, it is inappropriate for the court to look to guideline sections other than § 2B1.1 to increase Sodano's sentence. The definition of loss in § 2B1.1 is different than that contained in § 2C1.1, in that the latter discusses "loss" in terms of "benefit received whereas the former limits its definition of "loss" to the "value of the property taken, damaged, or destroyed." Under Third Circuit precedent, the Government is to be held to the terms of a negotiated plea agreement. United States v. Badaracco, 954 F.2d 928, 941 (3d Cir. 1992). Where, as here, the Government has stipulated that a specific guideline provision should be used to calculate the defendant's sentence, it would be inappropriate for the court to deprive the defendant of the benefit of his bargain by applying other provisions of the guidelines by analogy.
Since we will not apply the bribes received by Sodano to determine "loss" sustained by Community Medical Center, we will not increase Sodano's total offense level for the bribes paid in association with the service contracts. The Government has offered no evidence to establish a loss to Community Medical Center based upon the service contracts other than the bribe admitted to by Sodano. Since the Government has failed to establish that Community Medical Center paid Apple Medical Systems any more for the service contracts than it would otherwise have paid, it has not established any "loss" with regard to those contracts.
With regard to the equipment sale, the Government argues that Community Medical Center sustained a $ 39,500 loss on the sale of used x-ray equipment to Apple Medical Center. At the hearing, the Government submitted an appraisal of the value of the various pieces of equipment sold by Community Medical to Apple. Government Exhibit G-3. The appraiser found that the value of the equipment exceeded the sale price by $ 39,500. Id.
The defense argues that Community Medical Center has sustained no loss on the sale of used x-ray equipment because the equipment was sold at or above fair market value. In support of this assertion, the defense offered the testimony of Gerald Arcuri, Director of Northeast Sales for Prime Leasing. Arcuri testified that he had seen the General Electric CT 8800 Scanner in October 1988, shortly before its sale, and that in his opinion the value of the scanner was $ 50,000, or $ 10,000 less than the hospital had received for it from Apple Medical Systems. T90:11-22. He testified that the $ 80,000 figure suggested by the Government would be a reasonable price for the scanner installed and warranted but would be excessive for the mere sale of the used equipment. T90:23-T91:16. Arcuri also testified that, based upon his examination of the equipment, the $ 6,500 received by Community Medical Center for sale of a General Electric Maxie Camera was also in excess of its actual value, because the crystal was hydrated, and a replacement crystal would have cost the buyer approximately $ 30,000. T91:21-T92:16. He testified that, in his opinion, the camera was worth between $ 2,000 and $ 3,000. T92:17-20. Arcuri testified that the Picker GX1050, sold to Apple Medical Systems for $ 6,000, was probably worth between $ 1,000 and $ 2,000. T93:3-25. He also testified that the Picker table, tube stand, collimator table, given to Apple Medical Systems for free, had no value at the time of disposal. T94:18-T95:3.
Sodano also offered into evidence a letter written by Edward J. Dannic, formerly a CT/X-Ray Specialist with GE Medical Systems. Defendant's Exhibit D-1. In this letter, Dannic, in agreement with Arcuri and based upon his personal examination of the equipment, stated that the value of the CT 8800 Scanner sold to Apple Medical Systems was equal to or less than the $ 60,000 received by Community Medical Center.
The Government's burden is to establish Community Medical Center's loss by a preponderance of the evidence. United States v. McDowell, 888 F.2d 285, 291 (3d Cir. 1989). The Government has not sustained its burden of showing by a preponderance of the evidence that Community Medical Center sustained an ascertainable loss on the sale of the used medical equipment. Although the Government submitted the report of an independent appraiser stating that the equipment was sold at $ 39,500 less than fair market value, there is no evidence that the appraiser ever saw the equipment that he was evaluating. The appraisal states that the suggested values "are based upon our experience with such equipment and represent the value at the time of disposal of the equipment." Government's Exhibit G-3. The expert witnesses for the defense, on the other hand, testified in great detail as to the basis for their lower estimates, including such factors as costs of installation and deinstallation, warranties, and actual inspection of the equipment in question. The testimony of Mr. Arcuri that several specific pieces of equipment were either in poor condition or obsolete was unrebutted by the Government. Based upon this, we find that the Government has failed to establish by a preponderance of the evidence that Community Medical Center sustained a "loss" within § 2B1.1. While Sodano admittedly received a bribe in connection with the sale of these items, that in itself is not a basis for increasing his sentence within the stipulated guideline section.
The Government has proven by a preponderance of the evidence that Dover General Hospital sustained a $ 77,600 loss. The Government has failed to prove by a preponderance of the evidence that Community Medical Center sustained any loss. Therefore, Sodano's offense level will increased by 8 levels to account for the loss to Sodano's victims.
JOHN F. GERRY, CHIEF JUDGE
UNITED STATES DISTRICT COURT
DATED: August 27, 1993
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