United States v. Perryman – Second Circuit Clarifies Use of “Intended Loss” Under § 2X1.1 in Conspiracy-Based Health-Care Fraud Sentencing

Introduction

In United States v. Perryman, No. 24-1729-cr (2d Cir. Aug. 18, 2025), the United States Court of Appeals for the Second Circuit affirmed the conviction and 72-month sentence of Laura Perryman, founder and former CEO of Stimwave. A jury found Perryman guilty of conspiracy to commit wire fraud and health-care fraud (18 U.S.C. § 1349) and substantive health-care fraud (18 U.S.C. § 1347) for marketing an inert “White Stylet” as a functional receiver so that physicians would bill insurers under CPT code 64590.

On appeal, Perryman raised five principal challenges—constructive amendment, defective jury instructions, erroneous evidentiary rulings, an inflated loss calculation, and improper imposition of a leadership-role enhancement. The Second Circuit rejected each claim. Although the decision is a “Summary Order” without precedential effect under Local Rule 32.1.1, the panel offers a notable clarification: when sentencing a defendant convicted of a conspiracy, district courts must—by virtue of U.S.S.G. § 2X1.1(a)—consider intended loss, regardless of ongoing debates about the meaning of “loss” under § 2B1.1. This commentary unpacks that holding, the court’s reasoning on all remaining issues, and the likely ramifications for future fraud and health-care prosecutions.

Summary of the Judgment

• Conviction affirmed. No constructive amendment occurred; jury instructions were proper or harmless; evidentiary exclusions, even when erroneous, were harmless given overwhelming proof of fraudulent intent.
• Sentencing affirmed. The district court properly:
  • Used intended loss (≈ $14.5 million) under § 2X1.1(a).
  • Applied a four-level leadership enhancement under § 3B1.1(a).
• Key clarification. For conspiracy counts, § 2X1.1(a) mandates inclusion of intended loss; therefore, disputes about § 2B1.1’s commentary do not alter the Guidelines calculation when a conspiracy conviction is present.

Analysis

1. Precedents Cited and Their Influence

• Constructive Amendment
  • United States v. Dove, 884 F.3d 138 (2d Cir. 2018)
  • United States v. Salmonese, 352 F.3d 608 (2d Cir. 2003)
  • United States v. McGinn, 787 F.3d 116 (2d Cir. 2015) (plain-error standard)
  These cases define a constructive amendment and guided the panel to conclude that any allegation that the White Stylet was “useless plastic” was surplusage, not an essential element, and thus its removal or deemphasis could not amount to constructive amendment.
• Jury-Instruction Error
  • United States v. Applins, 637 F.3d 59 (2d Cir. 2011)
  • United States v. Sabhnani, 599 F.3d 215 (2d Cir. 2010)
  • United States v. Reifler, 446 F.3d 65 (2d Cir. 2006) (no need to prove success of fraud)
  The court found no prejudice because the verdict form showed the jury convicted under both prongs of § 1347, establishing fraudulent intent even if the second-prong language might have been overbroad.
• Evidentiary Rulings
  • United States v. Scully, 877 F.3d 464 (2d Cir. 2017)
  • United States v. Litvak, 889 F.3d 56 (2d Cir. 2018)
  • United States v. McCallum, 584 F.3d 471 (2d Cir. 2009)
  Even where the district court abused its discretion in excluding expert testimony, the panel deemed the error harmless given overwhelming evidence of intent.
• Sentencing – Loss Amount
  • United States v. Rosa, 17 F.3d 1531 (2d Cir. 1994)
  • United States v. Uddin, 551 F.3d 176 (2d Cir. 2009)
  • United States v. Kukoyi, 126 F.4th 806 (2d Cir. 2025) (quoted for the same proposition)
  Those authorities validated the district court’s reliance on intended loss for conspiracy counts and its method of estimating that loss.

2. Key Legal Reasoning

1. No Constructive Amendment. The grand-jury indictment and proof at trial both centered on Perryman’s misrepresentation that the White Stylet was a receiver. Any additional allegation (e.g., that the stylet was useless) was surplusage and its modification posed no risk the jury convicted on a different offense.
2. Jury Instructions. The district judge gave a limiting instruction that Perryman was not charged with misbranding. For health-care fraud, the charge mirrored § 1347’s bifurcated text, allowing conviction where the defendant either (1) devised a scheme to defraud or (2) obtained money by false pretenses. Because the jury convicted under both prongs, any arguable misstatement on intent for the second prong was harmless.
3. Evidentiary Exclusions.
   • The district court improperly excluded two defense experts and certain physician testimony, but the panel deemed these errors harmless given extensive direct evidence—emails, training materials, and co-conspirator testimony—showing Perryman’s intentional deception.
   • The billing-records exclusion was affirmed because Perryman failed to link her knowledge to those submissions, rendering the records irrelevant to her state of mind.
4. Intended Loss vs. Actual Loss. The pivotal holding: Where a defendant is convicted of conspiracy, § 2X1.1(a) expressly instructs courts to incorporate “any intended offense conduct” when cross-referencing the substantive Guideline (here, § 2B1.1). Thus, debates about the meaning of “loss” in § 2B1.1’s commentary (sparked by United States v. Banks and the post-Booker landscape) do not matter; intended loss is required for conspiracy counts.
5. Leadership Enhancement. Evidence that Perryman orchestrated marketing, engineered the White Stylet, directed misrepresentations, and trained physicians justified a four-level increase under § 3B1.1(a), even though many subordinates were “unknowing participants.”

3. Potential Impact

• Sentencing Clarity. District courts in the Second Circuit now have an explicit reminder that intended loss must be used when sentencing conspiracy defendants, even if § 2B1.1’s commentary is narrowed or disregarded elsewhere.
• Health-Care Fraud Prosecutions. The panel reiterates that the government need not prove actual deception of doctors; a fraudulent scheme targeting insurer reimbursement suffices. Prosecutors can therefore focus on the defendant’s intent and misrepresentations rather than evidentiary proof that physicians were fooled.
• Expert-Witness Challenges. While the court ultimately found the exclusion harmless, it faulted the district judge for demanding overly specific qualifications. Litigants may invoke this criticism to argue for broader acceptance of practitioners as coding or billing experts.
• Surplusage in Indictments. The decision underscores that extraneous descriptive language (e.g., calling a device “useless”) does not become an element. Defense counsel must distinguish between core elements and colorful surplusage when crafting constructive-amendment claims.

Complex Concepts Simplified

• Constructive Amendment. A mismatch between the indictment and trial proof that alters an essential element → unconstitutional. Surplus details may change without consequence.
• Misbranding vs. Fraud. Misbranding (FDCA misdemeanour) is labeling a device/drug inconsistently with FDA requirements. Health-care fraud focuses on deceptive schemes to obtain money from insurers. Evidence of misbranding can be background but is not automatically the charged crime.
• Intended vs. Actual Loss.
  • Actual loss: Verified dollars insurers actually paid out.
  • Intended loss: Dollars the defendant sought to obtain, whether or not paid. Under § 2X1.1, courts must use intended loss for conspiracies.
• Leadership-Role Enhancement (§ 3B1.1). Adds 2–4 levels if the defendant organized five or more people or an “otherwise extensive” scheme, even if some participants were unaware of the illegality.
• Harmless Error. An error that does not affect the verdict or sentence is not grounds for reversal. Courts examine the entire record—especially strength of the prosecution’s case—to decide harmlessness.

Conclusion

The Second Circuit’s decision in United States v. Perryman leaves Perryman’s conviction and sentence intact but, more importantly, provides authoritative guidance on two recurring issues in fraud cases:

1. District courts must calculate intended loss under § 2X1.1 when sentencing for a conspiracy, insulating the calculation from uncertainty surrounding § 2B1.1’s commentary.
2. Proof that victims (here, physicians) were actually deceived is unnecessary so long as the defendant orchestrated a scheme capable of defrauding a health-care benefit program.

Although rendered as a non-precedential Summary Order, the court’s reasoning will undoubtedly influence plea negotiations, trial strategy, and sentencing advocacy in complex fraud prosecutions, especially within the Second Circuit. Practitioners should heed the panel’s analysis when contesting loss calculations, crafting expert-witness strategies, or framing constructive-amendment arguments.