On June 8, 2023, the U.S. Supreme Court narrowed the reach of the aggravated identity theft statute, 18 U.S.C. § 1028A(a)(1). Criminal defense attorneys and federal prosecutors alike were anxiously awaiting the result in Dubin v. United States, 599 U.S. ____ (2023). The stakes were high. Commonly charged in mail, wire, bank, and healthcare fraud prosecutions, the aggravated identity theft offense revolves around the illegal use of a means of identification of another person. With its mandatory two years of imprisonment, an aggravated identity theft count tends to attract the attention of white-collar defendants.
Dubin is important for criminal practitioners because it narrows the “use” and “in relation to” elements of the aggravated identity theft offense in the context of fraud or deceit crimes involving healthcare billing. After Dubin, the government will need to prove the means of identification specifically was used in a manner that was fraudulent or deceptive, such as misrepresenting who received a service. Moreover, to meet the “in relation to” the predicate offense element, the government will need to show the misuse of the means of identification was at the crux of what made the conduct criminal.
In Dubin, Petitioner David Fox Dubin (“Dubin”) was the managing partner of a psychological clinic (the “Clinic”) in Austin, Texas. The Clinic often received referrals from an emergency shelter for children and sometimes billed Medicaid for treatment of certain patients.
Following an investigation and prosecution by the FBI, Texas Attorney General’s Medicaid Fraud Control Unit, and Department of Justice, a jury convicted Dubin of conspiracy to commit healthcare fraud, one count of substantive healthcare fraud, and one count of aggravated identity theft.
The evidence showed Dubin overbilled in four respects: (1) he billed at the licensed psychologist rate when, in fact, a clinician without that credential saw the patient; (2) he instructed employees to bill the maximum number of hours permitted by Medicaid even if they actually spent less time with the patient; (3) he billed for a full evaluation when only a partial was completed; and (4) he falsified the date that the services were provided.
The aggravated identity theft count involved a specific patient, a minor referred to as “Patient L,” who had undergone psychological testing at the Clinic. For purposes of the aggravated identity theft count, the allegedly misused “means of identification” was Patient L’s name and Medicaid identification number.
Among other grounds, Dubin appealed the aggravated identify theft conviction to the U.S. Fifth Circuit, arguing that he did not “use” Patient L’s identity within the meaning of the statute. Dubin lost his initial appeal but requested a rehearing, which was granted. In an Opinion on March 3, 2022, an en banc (and sharply divided) Fifth Circuit affirmed the conviction. The U.S. Supreme Court granted certiorari.
In a 9-0 Opinion authored by Justice Sotomayor (concurrence by Justice Gorsuch), the Supreme Court vacated Dubin’s aggravated identity theft conviction.
Mindful that it could not construe a criminal statute on the basis that the government would act with restraint, the Court rejected what it called a “sweeping” and “boundless” interpretation of the statute, one that covers “defendants who fraudulently inflate the price of a service or good they actually provided.” Justice Sotomayor used examples of a lawyer who rounds up their hours and a waiter who serves flank steak but charges for filet mignon. The Court was particularly concerned with the reach of the aggravated identity theft statute. “If [the aggravated identity theft statute] applies virtually automatically to a swath of predicate offenses, the prosecutor can hold the threat of charging an additional two-year mandatory prison sentence over the head of any defendant who is considering going to trial.”
In Dubin’s case, the Court found that his use of Patient L’s name and Medicaid number was not at the crux of what made the underlying healthcare overbilling fraudulent. The crux was Dubin’s misrepresentation about the “qualifications of [an] employee.” Patient L’s name was “an ancillary feature of the billing method employed.” Borrowing a formulation from the Sixth Circuit, Justice Sotomayor found that “[Dubin’s] fraud was in misrepresenting how and when services were provided to a patient, not who received the services.”
Moving forward, Dubin may provide criminal defense attorneys fertile ground for a targeted bill of particulars, non-pattern jury instructions, and Rule 29 arguments in cases involving alleged aggravated identity theft.