United States v. Yoon: Face-Value Billing Presumption for Intended Loss in Private Health-Insurance Fraud; Health-Care Providers as “Positions of Trust” Under U.S.S.G. § 3B1.3

Court: U.S. Court of Appeals for the First Circuit

Date: February 20, 2026

Case: United States v. Yoon, No. 24-1520 (Aframe, J.)

I. Introduction

United States v. Yoon arose from a multi-year billing scheme by Chang Goo Yoon, a Massachusetts-licensed physical therapist and clinic owner, who submitted over $1 million in claims to private insurers for services never rendered. A jury convicted Yoon of two counts of health care fraud under 18 U.S.C. § 1347. On appeal, Yoon challenged (i) several evidentiary rulings, including the admission of evidence about prior insurer/licensing investigations and testimony from insurer investigators, and (ii) two guideline enhancements: the intended-loss calculation under U.S.S.G. § 2B1.1 and the “abuse of trust/special skill” enhancement under U.S.S.G. § 3B1.3.

The First Circuit affirmed across the board. Most notably, it (1) reaffirmed that in fraud “rife with fraud” the face value of billed claims may be used as presumptive intended loss—including in private health-insurance fraud notwithstanding guideline amendments—unless the defendant produces evidence of a lower subjective intent; and (2) joined the majority of circuits in holding that a health-care professional can occupy a position of trust vis-à-vis private insurers for § 3B1.3 purposes, rejecting any requirement that the defendant be a fiduciary of the victim.

II. Summary of the Opinion

  • Evidentiary rulings affirmed: The district court properly admitted limited evidence that Yoon knew he was under investigation by Blue Cross (2015/2018 correspondence) and that Colorado authorities had investigated his billing previously, as this evidence was highly probative of intent and was carefully cabined under Rules 401 and 403 with redactions and limiting instructions.
  • Investigator testimony upheld as lay opinion: Insurer investigators’ testimony about their companies’ billing practices and atypical patterns in Yoon’s claims was admissible under Rule 701 because it derived from job-based perception and “everyday” reasoning, not specialized expert analysis.
  • Intended loss affirmed: The court endorsed the United States v. Alphas framework: total billed amount as a starting presumption of intended loss, rebuttable by defendant evidence. Guideline amendments concerning government programs and subjective intent did not abrogate that approach for private insurance claims.
  • § 3B1.3 enhancement affirmed: Yoon abused a position of trust vis-à-vis insurers because insurers rely on health-care professionals’ discretion and good faith when processing claims; fiduciary status is unnecessary (consistent with United States v. Sicher).

III. Analysis

A. Precedents Cited (and How They Shaped the Decision)

1. Evidentiary framework: relevance, prejudice, and appellate deference

  • United States v. Villa-Guillen (balanced trial-evidence summary): The court invoked it to justify providing a “balanced” recitation given that evidentiary rulings were contested.
  • Alaniz v. Bay Promo, LLC (standards of review): Used to frame abuse-of-discretion vs. plain-error review and to note that the court could assume preservation where the claims failed even under the more favorable standard.
  • United States v. Rathbun and United States v. Cruz-Ramos (Rule 401’s “very low threshold”): Supported the conclusion that knowledge-of-investigation evidence cleared relevancy easily.
  • United States v. Soler-Montalvo and United States v. Rodríguez-Soler (rare reversal of on-the-scene Rule 403 calls): Reinforced deference to the district judge’s probative/prejudice balancing, especially after imposing limiting conditions.
  • Samia v. United States (jurors follow limiting instructions): Underwrote the panel’s reliance on the trial court’s instruction that the Blue Cross letters were admitted only for knowledge/intent, not for truth.

2. Mens rea proof and “knowledge” relevance in fraud prosecutions

  • United States v. Troisi (health care fraud requires knowing and willful conduct; “specific intent”): The anchor for why “knowledge of investigations” was probative—Yoon’s defense was negligence/overwork, so the government needed evidence negating mistake.
  • United States v. Iwuala (fraud requires proof of knowledge unlawfulness; also intended-loss presumption): Appeared in two roles—first, as a mens rea authority, and later as a loss-calculation authority.
  • United States v. Cassell and United States v. Landrau-López (prior-acts evidence probative of knowledge): Provided analogies demonstrating that prior encounters with enforcement/illegality can make “accident/mistake” less plausible.
  • United States v. Muñoz-Franco and United States v. Christo (“alternative standards of guilt” concern): These cases framed Yoon’s argument that insurer-rule violations could confuse the jury, but the panel held the district court’s tight limits prevented that risk.
  • United States v. Liriano, United States v. Orsini, and United States v. Castillo (waiver/forfeiture): Crucial to rejecting parts of Yoon’s evidentiary attacks where counsel either agreed to admission, failed to request further redactions, or failed to argue plain error.

3. Lay versus expert testimony about business practices

  • United States v. O'Donovan and United States v. Maher (Rule 701 permits job-based perceptions): Supported admitting insurer investigators’ descriptions of company practices and common patterns as lay testimony.
  • United States v. Sepúlveda-Hernández (Rule 701 requires “everyday” reasoning): Used to distinguish ordinary pattern recognition from specialized expertise.
  • United States v. Vega (line between Rule 701 and Rule 702; Medicare-regulation expertise): A cautionary comparator; the panel emphasized the investigators did not interpret technical Medicare regulations but rather described insurer practices and flagged unusual patterns.
  • United States v. Wilkerson and United States v. Amador-Huggins (harmlessness and “contributed to the verdict”): Even assuming some policy-violation testimony should have been excluded, these cases supported affirmance due to lack of prejudice given Yoon’s defense theory.

4. Intended loss: the continuing vitality of the “face value” presumption

  • United States v. Alphas (framework for fraud “rife with fraud”): The central methodology—use total billed as starting presumption; defendant may rebut with evidence of lesser intent; court makes a reasonable estimate.
  • United States v. Ahmed, United States v. Rivera-Ortiz, and United States v. Arif (breadth of Alphas approach across schemes): Demonstrated that the First Circuit has applied the approach beyond a single fraud context.
  • United States v. Bertram (6th Cir.; private insurance; billed amount as intended loss absent contrary evidence): Offered persuasive support against Yoon’s argument that guideline commentary about government programs implicitly forbids the same in private-insurance fraud.
  • United States v. Carrasquillo-Vilches (post-2015 subjective intended-loss standard): The panel used this to acknowledge that “intended loss” is subjective (“purposely sought to inflict”), while holding this change does not displace the Alphas evidentiary presumption.
  • United States v. Flete-Garcia (deference to district court’s loss findings; reliability determinations): Supported affirming the district court’s estimate where defendant did not supply a concrete alternative.
  • United States v. Sarmiento-Palacios (use guidelines in effect at sentencing): Explained why the 2023 Guidelines governed and how amendments were analyzed.
  • Other circuits (comparative support): United States v. Geevers, United States v. Miller, United States v. Isiwele, United States v. Popov, United States v. Singh, and United States v. Holthaus were cited to show widespread acceptance of face-value-as-prima-facie-intended-loss, with opportunity for rebuttal.

5. § 3B1.3: health-care providers and “position of trust” toward insurers

  • United States v. Hoogenboom and United States v. Hodge (medical discretion; insurer reliance): Provided the conceptual basis for treating providers as occupying trust positions because insurers cannot exhaustively verify medical necessity and must rely on professional judgment and honesty.
  • Majority-circuit alignment: The panel expressly “join[ed]” circuits recognizing a provider’s position of trust vis-à-vis insurers: United States v. Ntshona, United States v. Sherman, United States v. Adam, United States v. Valdez, United States v. Rutgard, and United States v. Bikundi.
  • Rejection of fiduciary-only approach: The panel noted the Eleventh Circuit’s contrary view in United States v. Garrison and United States v. Williams, but relied on the First Circuit’s prior rejection of a fiduciary requirement in United States v. Sicher.
  • United States v. Nelson-Rodriguez (facilitation requirement): Cited for the point that the skill/trust must “significantly facilitate” the offense; the panel found that requirement met through provider discretion and insurer reliance.

B. Legal Reasoning

1. Investigation evidence: intent, not propensity

The evidentiary core of the appeal was Yoon’s attempt to reframe insurer and licensing scrutiny as either irrelevant or unfairly prejudicial “bad character” evidence. The panel accepted the district court’s key limiting move: the jury would learn only that Yoon knew he was being investigated, not what the investigations concluded. That distinction mattered because the government’s burden under § 1347 was not merely that claims were false (which Yoon largely did not contest), but that he acted knowingly and willfully.

Within Rules 401 and 403, the panel treated knowledge-of-investigation as a high-probative rebuttal to the defense of negligence/overwork. The court also relied heavily on process safeguards: redactions, limiting instructions (admitted for knowledge/intent, not truth), and a minimal two-question presentation for the Colorado investigation. Where Yoon wanted to challenge residual prejudice (e.g., “pre-payment review” implying wrongdoing), the court treated the failure to request further redactions as waiver under United States v. Liriano.

2. Lay opinion testimony: company practices and pattern recognition vs. specialized expertise

The panel drew a clean line: insurer employees may testify under Rule 701 about their companies’ billing practices and what they had (or had not) seen in their work (for example, unusual address patterns or payment-routing requests), because this is experience-based observation and ordinary inference. The testimony did not purport to apply technical regulatory regimes such as Medicare rules (contrast United States v. Vega), and therefore did not require Rule 702 expert qualification.

3. Intended loss after guideline amendments: Alphas survives, but must be applied subjectively

Yoon’s principal sentencing argument attempted to convert two guideline amendments into a categorical bar on using billed amounts as presumptive intended loss in private insurance fraud: (i) the 2011 amendment addressing government health care programs, and (ii) the 2015 shift to a subjective intended-loss test. The panel rejected both.

First, the 2011 government-program commentary was treated as additive, not exclusive: it created a specific prima facie rule for government programs but did not strip courts of the longstanding evidentiary presumption in other fraud settings. Second, the subjective standard was treated as compatible with the Alphas framework: the billed amount is presumptive evidence of what the defendant intended to obtain, but the defendant may rebut by producing concrete evidence of a lower target. Yoon did not supply a reliable alternative estimate beyond pointing to reimbursement practices generally; the district court was not required to “guess” a discount.

4. § 3B1.3: trust runs from insurer reliance on professional discretion

On § 3B1.3, the panel reasoned that health-care billing is structurally dependent on professional discretion: providers decide what is necessary and appropriate, and insurers—“swamped” with claims—cannot verify each submission ex ante. That reliance is the functional hallmark of a position of trust under § 3B1.3’s commentary. Importantly, the panel made explicit doctrinal room for trust relationships outside classic fiduciary categories, consistent with United States v. Sicher.

C. Impact

  • Loss calculations in private insurance fraud: The decision strengthens the First Circuit’s continued use of billed-amount presumptions after the 2015 subjective-intent amendment. Defendants will likely need to present concrete, claim-specific evidence (e.g., known fee schedules, historical reimbursement caps, negotiated rates, or internal records) to rebut billed amount as intended loss—general awareness that insurers “pay less than billed” will often be insufficient.
  • § 3B1.3 applicability broadened and clarified: By expressly joining other circuits, the First Circuit reduces uncertainty in private-insurance prosecutions: licensed providers who submit claims can be treated as occupying positions of trust toward insurers when their professional discretion and unsupervised claiming materially enable the scheme.
  • Evidentiary playbook for intent: The opinion signals that carefully limited “knowledge of investigation” evidence can be a powerful tool to prove willfulness, particularly where defendants argue mistake, disorganization, or negligent billing. Trial courts are encouraged to use redactions, narrow questioning, and limiting instructions to manage prejudice.
  • Rule 701 testimony in complex commercial cases: Insurer employees can often explain internal practices and flag anomalies as lay witnesses; litigants seeking to force Rule 702 treatment will need to show the testimony rests on specialized technical knowledge rather than workplace observation and ordinary inference.

IV. Complex Concepts Simplified

  • Health care fraud (18 U.S.C. § 1347) “knowing and willful”: It is not enough that the claims were wrong; the government must show the defendant knew the claims were false and meant to defraud. That is why proof that the defendant had been warned or investigated can matter—because it makes “accident” less believable.
  • Rule 401 relevance vs. Rule 403 unfair prejudice: Rule 401 asks whether evidence makes a consequential fact even slightly more or less likely. Rule 403 allows exclusion only when the risk of unfair prejudice or confusion substantially outweighs probative value—especially hard to show when the judge uses limiting instructions/redactions.
  • Lay (Rule 701) vs. expert (Rule 702) testimony: A lay witness may testify from personal work experience and ordinary reasoning (e.g., “this pattern is atypical in our claims”). Expert testimony is required when the witness is applying specialized technical knowledge (e.g., interpreting complex regulatory schemes).
  • “Intended loss”: Under the Guidelines, intended loss is the amount of money the defendant meant to obtain (or harm the victim by), even if the victim did not actually pay it. Courts may treat the face value of a fraudulent bill as presumptive evidence of that intent unless the defendant produces concrete evidence showing a lower target.
  • “Position of trust” (U.S.S.G. § 3B1.3): This enhancement applies when the defendant’s role involves discretion and low supervision, and that role significantly helped the fraud. In health-care billing, insurers’ reliance on providers’ professional judgment can create that trust relationship even without a formal fiduciary duty.

V. Conclusion

United States v. Yoon is a consolidating decision in First Circuit fraud jurisprudence. It reinforces that (1) evidence that a defendant knew of investigations into billing practices, when tightly limited to knowledge/intent and paired with redactions and instructions, is admissible and highly probative against a “negligence” defense; (2) insurer investigators may testify as lay witnesses about company practices and anomalous patterns based on workplace experience; (3) the United States v. Alphas face-value billing presumption remains a valid framework for intended-loss estimates in private insurance fraud after guideline amendments, with the burden on defendants to rebut it with concrete evidence; and (4) licensed health-care providers can occupy a position of trust vis-à-vis insurers for § 3B1.3 purposes, without any fiduciary requirement.