United States Court of Appeals
For the First Circuit
Nos. 24-1592
24-1716
UNITED STATES,
Appellee,
v.
GUSTAVO KINRYS,
Defendant, Appellant.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Denise J. Casper, U.S. District Judge]
Before
Montecalvo, Thompson, and Aframe,
Circuit Judges.
Judith H. Mizner, Assistant Federal Public Defender, for the
appellant.
Alexia R. DeVincentis, Assistant United States Attorney, with
whom Leah B. Foley, United States Attorney, was on brief, for the appellee.
September 21, 2026
AFRAME, Circuit Judge. In this sentencing appeal,
Gustavo Kinrys challenges the intended loss and restitution
calculations resulting from his conviction for committing health
insurance fraud. We affirm the district court's decisions in both
respects.
I.
Kinrys worked as a licensed psychiatrist, operating his
own private practice in Massachusetts. During the charged conduct
period, between 2015 and 2018, Kinrys defrauded private and public
health insurers, including Blue Cross Blue Shield ("BCBS"), Tufts,
Aetna, Optum, Beacon, and Medicare. For example, he billed for
over a thousand sessions while either he or the purported patient
was out of the country. For at least some of the defrauded
insurers, Kinrys was an "in-network" provider, which means that he
had a contract with the insurer that detailed the amount that it
would pay for a given service.
Starting in 2017, Kinrys's conduct caught up with him.
Over the next two years, at least two insurers asked him to provide
more detailed billing records. Kinrys delayed responding by
directing the insurers to a fictitious office manager. He also
created false records indicating that he had provided services
that he had not actually rendered. Eventually, at least one
insurer informed Kinrys that it would stop paying his invoices
until he complied with its records request. And another insurer
-2-paid Kinrys contingent on his obtaining preauthorization for a
submitted service.
A couple of years later, the federal government indicted
Kinrys for fraud. And in October 2023, a jury convicted Kinrys
on fourteen of fifteen counts arising from his scheme.
At sentencing, the district court calculated Kinrys's
base offense level to be seven and then added twenty-eight
levels-worth of enhancements, including a twenty-level enhancement
for the loss amount. This yielded a recommended guideline range
of 168 to 210 months for the first seven counts of conviction, and
sixty months for the remaining counts. The district court
sentenced Kinrys to ninety-nine months in prison on the first seven
counts and sixty concurrent months in prison on the remaining
counts. It also required Kinrys to pay $6,537,309.59 in
restitution and $6,527,391.19 in criminal forfeiture.
II.
Kinrys appeals the loss calculation for his sentencing
enhancement and the restitution amount imposed. Kinrys preserved
both challenges. Accordingly, for these issues, we review
findings of fact for clear error, interpretations of law de novo,
and judgment calls for abuse of discretion. See United States v.
Yoon, 167 F.4th 556, 564 (1st Cir. 2026) (application of
enhancement); United States v. Cardozo, 68 F.4th 725, 733 (1st
Cir. 2023) (restitution calculation).
-3-A.
We start with the loss amount under the sentencing
guidelines. In this context, the loss amount is the greater of
actual or intended loss. U.S.S.G. § 2B1.1(b)(1)(A). 1 The
district court pegged Kinrys's intended loss to the amount he
billed and so, based on the presentence report's accounting of
Kinrys's billing, determined that he intended to steal a little
over nineteen million dollars. As we indicated above, this
yielded a twenty-level sentencing enhancement. See U.S.S.G.
§ 2B1.1(b)(1)(K). Kinrys argues that the amount he billed does
not accurately reflect his intended loss. He contends that a more
appropriate measure of his intended loss is the amount he
anticipated receiving pursuant to the contract reimbursement
rates, which, at roughly $8.3 million, would yield an
eighteen-level enhancement. Id. § 2B1.1(b)(1)(J).
1 Generally, courts use the version of the sentencing
guidelines in effect at the time of sentencing. See Yoon, 167 F.4th at 564 n.6. At the time of Kinrys's sentencing in June 2024, a commentary to the guidelines defined loss as the greater of
actual or intended loss. See U.S.S.G. § 2B1.1 cmt. n.3(A) (2023). The level of deference that courts owe to commentary notes in the guidelines is an issue currently before the Supreme Court. See
Beaird v. United States, ___ S. Ct. ___, 2026 WL 1052007 (Apr. 20, 2026) (Mem.) (granting certiorari). But we may avoid the question of whether we must apply this note because the United States
Sentencing Commission amended the guidelines so that the
definition of loss now appears in the guidelines' main text. See
U.S.S.G. § 2B1.1 amend. 827. As Kinrys concedes, this amendment
"clarif[ies]" the guidelines and thus applies retroactively to his sentencing. Unites States v. Cates, 897 F.3d 349, 358 n.4 (1st
Cir. 2018).
-4-The government bears the burden to prove that a
sentencing enhancement applies by a preponderance of the evidence.
United States v. Alphas, 785 F.3d 775, 784 (1st Cir. 2015). In
cases like this one, where the defendant's scheme was "rife with
fraud," courts may calculate intended loss using the
burden-shifting framework derived from Alphas. Id.; see also
Yoon, 167 F.4th at 565-66. That approach permits a sentencing
court to use the billed amount as prima facie evidence of intended
loss. Alphas, 785 F.3d at 784. The burden then shifts to the
defendant, who may "rebut" the face value of the bills by
"proffering evidence establishing that he intended to reap some
lesser amount." Yoon, 167 F.4th at 565; see also United States
v. Iwuala, 789 F.3d 1, 14 (1st Cir. 2015). Once both parties have
put forth their competing loss amounts and the record is fully
formed, the district court must make a "reasonable estimate of the
loss," bearing in mind that the government retains the ultimate
burden of proving the applicability of the enhancement. Yoon, 167
F.4th at 565 (quoting U.S.S.G. § 2B1.1, cmt. n.3(C)). The court
determines reasonable loss based on the defendant's subjective
intent, that is, the "pecuniary harm that the defendant purposely
sought to inflict." United States v. Carrasquillo-Vilches, 33
F.4th 36, 42-43 (1st Cir. 2022) (quoting U.S.S.G. § 2B1.1 amend.
792).
-5-The district court applied the Alphas framework here.
After the court indicated that it would start with the face value
of Kinrys's claims, Kinrys attempted to rebut the presumption that
he intended to be reimbursed for the full billed amount by
contending that as an "in-network" provider, he expected to obtain
the contract amount for the given claim, regardless of the billed
amount. He further argued that his inaction in collecting co-pays
from his patients was proof that he intended to obtain only the
contract amount.
The district court was unpersuaded. It provided two
reasons that supported its decision to stick with the billed amount
as the appropriate metric. First, in 2023, as his criminal trial
was approaching, Kinrys filed two pro se civil suits -- one against
BCBS and another against Optum -- alleging, inter alia, that the
insurers had breached their contract with him for services he
alleged to have rendered between 2017 and 2021, largely after the
charged conduct. He asserted that the insurers had refused to
reimburse him for "billed charges," rather than the negotiated
in-network amount, and requested damages that exceeded the amount
he had billed. 2 Second, during the offense period, Kinrys
sometimes received the full amount that he billed and kept that
full payment. Based on these facts, the district court found that
2 Kinrys's civil suits were subsequently removed to federal court and have since been dismissed.
-6-Kinrys had intended to "scoop" as much as he could from the
insurers. (Quoting Iwuala, 789 F.3d at 14).
On appeal, Kinrys repeats his arguments that intended
loss is captured better by the amounts he anticipated receiving
under his agreements with the insurers as compared to the amount
he billed. Kinrys's subjective intent is a factual question, so
we review the district court's decision for clear error. See
United States v. Arif, 897 F.3d 1, 11 (1st Cir. 2018). Surmounting
the clear error standard is difficult because it requires us to
have a "definite and firm conviction" that there has been a
mistake. United States v. Gonzalez, 68 F.4th 699, 703 (1st Cir.
2023) (quoting United States v. Centeno-González, 989 F.3d 36, 50
(1st Cir. 2021)). We are not so convinced.
To begin, Kinrys's decision to refrain from collecting
co-pays from his patients does not move us to conclude that he
clearly intended to accept only the contract amounts. Had Kinrys
sought to supplement payment for services never rendered, he would
have drawn his patients' attention to his fraud scheme. Moreover,
many doctors choose not to pass along excess costs to their
patients as it can discourage those patients from returning to the
provider. So Kinrys's decision to write off co-pays from patients
does not show that he intended to obtain from insurers less than
he billed them.
-7-The other fact that Kinrys cites -- his status as an
in-network provider -- has more force. The insurance contracts
that Kinrys signed established predictable amounts that Kinrys
would receive in return for the claims he submitted. They support
his assertion, then, that he expected to take only the amounts
contemplated by the agreements, regardless of the amount that he
billed. Indeed, that Kinrys was an in-network provider
distinguishes this case from our recent decision in Yoon, which
also applied the Alphas framework to a health insurance fraud
scheme. 167 F.4th at 565-67. There, the defendant was an
out-of-network provider. Id. at 566. And based on that fact, we
affirmed the district court's determinations that he would not
have known how much he would receive in response to each bill and,
because he failed to detail the amount he expected, it was fair to
assume that he intended to take as much as he could get. Id. at
566-67. Here, by contrast, Kinrys's assertion that he intended
to obtain only the contract amounts is stronger, given that his
contracts with the insurers dictated that he would receive an
amount that was less than the amount he billed. See United States
v. Singh, 390 F.3d 168, 193 (2d Cir. 2004) (rejecting use of billed
amount by acknowledging that providers often are familiar with the
fixed rates that insurers pay for medical services).
Nevertheless, considering all the information before the
district court, Kinrys's status as an in-network provider does not
-8-demonstrate that the court clearly erred in determining, as a
factual matter, that Kinrys intended to take from the insurers as
much as he could, up to the billed amounts. As the court pointed
out, Kinrys filed multiple pro se civil lawsuits on the eve of his
criminal trial. In the complaints for these suits, Kinrys
asserted that the insurers had breached their respective contracts
and owed him for the amounts he billed. Moreover, he sought
damages that reflected even greater amounts. Though these suits
covered payments that occurred largely after his charged conduct,
they still shed light on Kinrys's intent when he submitted claims
throughout his scheme, particularly because he wrote and filed his
complaint pro se.
Kinrys acknowledges these facts but responds that the
civil complaints also refer to the "negotiated contract rates" he
had with each insurer. He argues that these references suggested
that he had the contracted amounts in mind when he submitted the
claims. Kinrys's reading of the complaint is plausible and could
have supported a decision to rely on the contract amount instead
of the billed amount to determine intended loss. But, on this
question, we do not step into the district court's shoes; we
determine only whether it committed a clear error. The court
conducted a full trial and sentencing hearing, where it heard
firsthand the evidence and the respective parties' case
presentations. Indeed, the district court's view of Kinrys's
-9-complaints is buttressed by the other fact it relied on, namely,
that the insurers sometimes paid Kinrys the full amount billed and
that he did not reimburse the insurers for payments that exceeded
the contract rate.
Kinrys may have had evidence that the civil suits and
his acceptance of overpayments were not probative of his intent.
But if he did, he failed to present it at his sentencing hearing.
Instead, he chose to rely exclusively on argument by his counsel.
"Attorney argument or embellishment cannot substitute for missing
evidence." Rios v. Centerra Grp. LLC, 106 F.4th 101, 118 n.5 (1st
Cir. 2024) (affirming summary judgment where the plaintiff failed
to produce record evidence supporting his employment retaliation
claim). That is particularly true here: Because Kinrys submitted
claims rife with fraud and because the Alphas framework allows the
sentencing court to use the billed amount as prima facie evidence
of intended loss, the burden shifted to Kinrys to demonstrate that
he intended to receive a lesser amount than the amount he billed.
See Yoon, 167 F.4th at 565. Between the evidence relied upon by
the district court and Kinrys's failure to proffer contrary
evidence, we see no clear error in the court's determination that
Kinrys intended to take as much as he could from the insurers,
even up to the billed amounts.
-10-B.
Kinrys also challenges the district court's restitution
calculation. Under the Mandatory Victims Restitution Act of 1996,
defendants convicted of certain crimes -- including "any offense
committed by fraud or deceit" -- are required to pay restitution
to their victims. 18 U.S.C. § 3663A(c)(1)(A)(ii). In the
criminal context, restitution is a non-punitive process through
which a defendant compensates victims for actual losses caused by
the defendant's criminal actions. United States v. Simon, 12
F.4th 1, 64 (1st Cir. 2021); United States v. De Jesús-Torres, 64
F.4th 33, 44 (1st Cir. 2023). The goal of restitution is to make
the victims "whole again." Carrasquillo-Vilches, 33 F.4th at 46
(quoting United States v. Innarelli, 524 F.3d 286, 293 (1st Cir.
2008)). But restitution orders should "not . . . confer a
windfall upon a victim." Id. (quoting United States v. Naphaeng,
906 F.3d 173, 179 (1st Cir. 2018)).
On appeal, Kinrys argues that his roughly $6.5 million
restitution order should be offset by claims for legitimate
services that went unpaid by the victims. In the past, we have
vacated and remanded restitution calculations when they include
both fraudulent and legitimate claims, explaining that only
fraudulent claims may serve as the basis for a restitution
calculation. See, e.g., Alphas, 785 F.3d at 786-87. But Kinrys
does not argue that the district court included legitimate claims
-11-in its restitution calculation. Rather, he concedes that the
court's restitution calculation was based only on fraudulent
claims. Instead, Kinrys asserts that a separate set of
claims -- ones he submitted for which he was never paid -- are
legitimate. He contends that the court should have offset the
restitution amount by the sum claimed in these bills and that its
failure to do so afforded the insurers a windfall. We disagree.
A restitution hearing is not a place to bring civil
claims against victims, which is effectively what Kinrys seeks to
do here. See United States v. Maurer, 226 F.3d 150, 152 (2d Cir.
2000) (per curiam). Kinrys's allegedly legitimate claims
implicate a distinct set of reimbursement requests from those that
serve as the basis for the restitution amount. And it is unclear
whether Kinrys is entitled to payment for these allegedly
legitimate claims.
Kinrys appears to have submitted all these claims toward
the end of his scheme, in circumstances where an insurer had made
payment contingent on either preauthorization (which Kinrys failed
to obtain) or Kinrys's production of requested documents (which he
failed to complete).3 Whether those claims were properly withheld
(and whether they may now be owed) is a question to be resolved
3 No party indicates that Kinrys submitted legitimate
unpaid claims in circumstances where the insurers did not require preauthorization or the production of billing records.
-12-through a civil suit or an administrative process with the insurer,
avenues that Kinrys may attempt. See United States v. Cupit, 169
F.3d 536, 540 n.3 (8th Cir. 1999) (per curiam). But a criminal
restitution hearing, where distinct, unrelated, and contested
billing is not before the court, is not the proper venue to resolve
such claims. See Maurer, 226 F.3d at 152. Accordingly, we affirm
the district court's decision to decline offsetting the
restitution order based on Kinrys's allegedly legitimate claims.
Affirmed.
-13-