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Psychologist charged with identity theft finds sympathy at high court

By compounding convictions for Medicaid fraud and identity theft, the government managed to triple the defendant's prison time.

WASHINGTON (CN) — The Supreme Court appeared skeptical Monday as the government defended a maximalist reading of identity theft that would expose an Austin psychologist to a lengthier prison sentence for defrauding Medicaid.

“When you really get down to it, all health care fraud is done using people's names,” Justice Elena Kagan noted during arguments this morning in Washington.

The case stems from a mental health testing company called Psychological ARTs, operated by father-and-son psychologists William and David Dubin. In 2013, as the son, David, was examining a patient, the visit was cut short after the father realized the patient’s Medicaid benefits had already been exhausted. The younger Dubin still instructed an employee to file a reimbursement claim to Medicaid, including the patient’s name and ID number, which resulted in the canceled exam falsely qualifying for payment. 

A jury later convicted both Dubins on multiple charges. For filing a phony Medicaid reimbursement form, David Dubin, the son, was sentenced in 2019 to three years in prison on health care fraud and identity theft charges. The Fifth Circuit affirmed, but Dubin's lawyer fought Monday for a reversal in Washington, saying the conviction “stretches the aggravated identity theft statute beyond its breaking point.”

“It does not meet any ordinary understanding of the term ‘identity theft,’” said Jeffrey Fisher, an attorney for Dubin with the Stanford Law School Supreme Court Litigation Clinic.

Assistant to the U.S. Solicitor General Vivek Suri insisted that the both convictions should stand.

“In this case, you can't possibly charge a particular Medicaid account fraudulently without using that patient's Medicaid number. And, therefore, the use of the Medicaid number is on any reasonable definition in relation to that particular fraud,” Suri said.

The issue of the authorization appeared to puzzle Justice Clarence Thomas, who used a valet parking service as a hypothetical.

“The valet is authorized to drive it generally," Thomas said. "Not to drive it around the city, but to park it, so I don't see how this is any different from that. “He [Dubin] is authorized to bill the appropriate charges. But it's not a general authorization.”

Fisher saw the instance differently. 

“I think, with all due respect, what your hypothetical would do is ask whether the item was used lawfully, not whether the person had authority in a general sense,” said Fisher. “And I think one other analogy that we give the court in our brief is burglary law, which is a common criminal law thing where you don't ask whether the person had authority to enter the building to commit a crime because nobody has that kind of authority.”

Justice Ketanji Brown Jackson presented another hypothetical Monday, asking Fisher how general his analysis was.

“I give the waiter my credit card, and rather than charging me for the food, he charges me to pay down his mortgage with my credit card. Is that use with or without lawful authority and why?” Jackson asked.

Fisher said it would be use without authority “because, when you give your credit card to the waiter, you are assuming that the waiter is going to charge you for the meal, or at least, at least something from the restaurant.”

Suri said otherwise.

“Let's say the customer ordered steak, and the waiter uses the credit card to ring up a bottle of wine as well. I think the discussion earlier today established that the waiter was acting without lawful authority,” Suri said. “He had the authority to use the credit card number to bill only for the food that was ordered. He didn't have the authority to use it for other things, whether it be wine or products. Or paying down his mortgage.”


Justice Thomas then questioned the assistant attorney general about rounding up hours, and whether a provider rounding up from 2.5 hours to 3 hours would be sufficient to spring the identity theft statute.

Suri allowed that, while fraud in that context is relatively small fraud, it is nevertheless the correct reading of the statute, whose full name is the Identity Theft Penalty Enhancement Act of 2004

“It's not a big fraud but it's inherent in the statute, which has a flat two-year penalty, regardless of the size of the fraud in a particular case," Suri said. "The small fraud is going to be punished the same way as the big fraud."

And with respect to this case, Suri noted, it's true that, while this one Medicaid claim was $338, the trial court found that the scheme involved a lot of claims — $282,000 worth.

“It is possible that, when it's a small amount, we could still prosecute, but we'd have hurdles that we'd have to overcome when it's a small amount. It's going to be harder to convince a jury of fraudulent intent when the amount is extremely small,” Suri said.

Jackson seemed disturbed by the government’s argument.

“You've just admitted in response to Justice Thomas that it can be a teeny, teeny fraud,” she said, concerned that the predicate offense wouldn’t have to be substantial to trigger the two-year mandatory minimum in the identity theft law.

Fisher retorted that, because of the fraud statute’s two-year mandatory minimum, it is “a very, very big deal” both for plea bargaining and back in sentencing if somebody goes to trial. 

“That should be strong medicine for particularly egregious frauds,” he said. “It's not something that ought to be there for every single case.”

Justice Neil Gorsuch also took issue with the government’s argument Monday. 

“It seems to be you've just given up the ghost and clarified things substantially,” Gorsuch said. “That every time anyone overbills for anything, that triggers the statute.”

Gorsuch said that this could apply to Dubin’s act or it could be a lawyer rounding up his hours to the next tenth of an hour. 

“That is still identity theft because you are using somebody's identity in a way that is unlawful and perhaps arguably exceeds their permission,” the Trump appointee said.

“I'm not sure most waiters in America appreciate that they're committing identity theft when they bill for that bottle of wine," he then quipped.

In the petition for Dubin, Fisher warned of major ramifications if the court affirms that the scope of the identity theft law extends to this case.

“Under the Fifth Circuit’s rule, moreover, the additional two-year sentence applies not only to most every commission of healthcare fraud, but would also sweep in tax preparers, immigration attorneys, and anyone else convicted of submitting any form on someone’s behalf that contains a misrepresentation unrelated to the person’s identity,” Fisher wrote.

He spoke to the far-reaching ramifications Monday as well.

“If the government is right about how broad the statute is, what it would do is it would transform fraud prosecutions to having every one of them be essentially an aggravated identity theft prosecution too and that would thwart Congress' careful design,” Fisher said.

Justice Samuel Alito wondered aloud to Fisher at the hearing: “Your argument has lots of intuitive appeal because this does not seem like what one normally thinks of as identity theft. But I'm wondering if you are trying to get too much out of the caption of this album of this provision,”

The identity theft statute applies only when identity theft occurs during the course of someone using another person’s personal data that involves fraud or deception. This statute holds a mandatory two-year sentence that must be stacked on top of the predicate felony. 

“Petitioner’s conduct here — submitting a Medicaid claim seeking reimbursement owed to a specific patient, identified by name and number, for a service that patient never received — qualified for that enhancement,” the U.S. government wrote in its opposition brief last year.

Criminal defense lawyers have referred to the prosecution as a symptom of the federal overcriminalization epidemic.

Criminal defense lawyers — who have said that the Fifth Circuit’s ruling is a symptom of the federal overcriminalization epidemic. A group of them filed a friend-of-the-court brief that urged the justices to hear the case.

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