Business Law

Dubin v. United States, 599 U.S. __, 2023 WL 3872518 (June 8, 2023)

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“Aggravated identity theft” sentence enhancement is inappropriate in healthcare fraud case based on overbilling Medicare

David Dubin overbilled Medicaid $338 by overstating the qualifications of employees who performed psychological testing. A jury convicted him of healthcare fraud under 18 U.S.C. § 1347 and aggravated identity theft under § 1028A. The Government sought a 2-year prison sentence enhancement for aggravated identity theft under § 1028A(a)(1). That statute applies when “‘during and in relation to any [predicate offense, including healthcare fraud]’” a defendant “‘knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person.’” The Government argued that § 1028A(a)(1) applied because Dubin committed healthcare fraud using patients’ Medicaid reimbursement number, a “‘means of identification.’” The district court was dubious because the crux of the case was fraudulent billing, not identity theft, but nonetheless imposed the sentence enhancement due to controlling Fifth Circuit precedent.

The U.S. Supreme Court granted review to determine “whether in defrauding Medicaid, [Dubin] also committed ‘[a]ggravated identity theft.’” The Supreme Court reversed the Fifth Circuit, holding that “under § 1028A(a)(1), a defendant ‘uses’ another person’s means of identification ‘in relation to’ a predicate offense when the use is at the crux of what makes the conduct criminal” and does not merely facilitate the crime.  The Court reasoned that the title and language of § 1028A(a)(1) together reflected a targeted meaning that “accurately captured the ordinary understanding of identity theft, where misuse of a means of identification is at the crux of the criminality.”  Thus, Congress’ decision to title § 1028A “Aggravated identity theft” and to separate identity fraud crimes from identity theft crimes shows the statute “is focused on identity theft specifically, rather than all fraud involving means of identification.” Likewise, the verbs used in § 1028A(a)(1) (transfers, possesses, and uses) speak to classic identity theft where the means of identification is the locus of the criminal undertaking. In contrast, the “Government’s broad reading, covering any time another person’s means of identification is employed in a way that facilitates a crime, bears little resemblance to any ordinary meaning of ‘identity theft.’” The statute’s list of predicate offenses and its separate 2-year sentence enhancement also reflects an intent to target “situations where the means of identification itself is at the crux of the underlying criminality, not just an ancillary billing feature.” Finally, under the rule of lenity, the Court typically eschews broad readings of federal criminal statutes to ensure people have “fair warning” of what conduct is forbidden.

A concurring opinion by Justice Gorsuch opined that § 1028A(a)(1) was unconstitutionally vague, and not merely ambiguous, because it failed to provide even rudimentary notice of what it does and does not criminalize.

The bulletin describing this appellate decision was originally prepared for the California Society for Healthcare Attorneys (CSHA) by H. Thomas Watson, Peder K. Batalden, and Lacey Estudillo at the appellate firm Horvitz & Levy LLP, and is republished with permission.

For more information regarding this bulletin, please contact H. Thomas Watson, Horvitz & Levy LLP, at 818-995-0800.

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