Tag Archives: 18 USC 1028A

Supremes Put Identity Theft In Its Place – Update for June 9, 2023

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We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.

IDENTITY THEFT TAKES A ‘ROAD TRIP’

roadtrip230609The Supreme Court yesterday unanimously but unclearly narrowed the circumstances when aggravated identity theft under 18 USC § 1028A can be included as part of federal criminal charges, with Justice Gorsuch grousing in a concurrence that “criminal statutes are not games to be played in the car on a cross-country road trip. To satisfy the constitutional minimum of due process, they must at least provide ordinary people with fair notice of the conduct they punish…”

Dr. David Dubin was convicted of healthcare fraud under 18 USC § 1347 after he overbilled Medicaid for psychological testing performed by the company he managed. The Doc would overstate the qualifications of the employee who actually performed the testing, sort of like having a patient get a shot from a nurse and then claiming a doctor performed the jab. Dave’s falsehood inflated the amount of reimbursement by a princely $338.00.

Dave was also convicted of aggravated identity theft under § 1028A(a)(1), because when he submitted the false claim to Medicaid, the claim included the name and numeric identifier of the patient. Section 1028A(a)(1) applies when “during and in relation to” certain offenses – including healthcare fraud – a defendant “knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person.”

The Government told SCOTUS that § 1028A(a)(1) was automatically satisfied because Dave’s fraudulent Medicaid billing included the patient’s Medicaid reimbursement number — a “means of identification.”

identitythefy230609Writing for the 9-0 Court, Justice Sotomayor rejected the government’s “sweeping reading, as long as a billing or payment method employs another person’s name or other identifying information, that is enough.” She observed that by that metric, “a lawyer who rounds up her hours from 2.9 to 3 and bills her client electronically has committed aggravated identity theft. The same is true of a waiter who serves flank steak but charges for filet mignon using an electronic payment method.”

The “staggering breadth” of the Government’s reading – under which everyday overbilling cases would account for the majority of violations – “underscores the implausibility of the Government’s interpretation,” the Court ruled. “While the Government represents that prosecutors will act responsibly in charging defendants under its sweeping reading, this Court cannot construe a criminal statute on the assumption that the Government will use it responsibly.”

The Court held instead that under § 1028A(a)(1), a defendant “uses” another person’s means of identification “in relation to” a predicate offense only when the use is “at the crux of what makes the conduct criminal… A far more sensible conclusion from the statutory structure is that § 1028A(a)(1)’s enhancement targets situations where the means of identification itself is at the crux of the underlying criminality, not just an ancillary billing feature.”

The decision did not go far enough to satisfy Justice Gorsuch, who argued in a concurrence that § 1028A was unconstitutional,

not much better than a Rorschach test. Depending on how you squint your eyes, you can stretch (or shrink) its meaning to convict (or exonerate) just about anyone… We have a term for laws like that. We call them vague. And in our constitutional order, a vague law is no law at all.

aggidentityrohr230609The Dubin ruling is important because the ID theft law adds a two-year mandatory prison sentence onto underlying offenses that do not impose a mandatory prison sentence of any kind. Sentencing judges may not consider the severity of the offense, even if the amount of money involved is quite small or there are other mitigating factors.

The impact on people currently serving time for violations of 18 USC § 1028A is unclear but likely to be positive. For those beyond the deadline to file post-conviction motions under 28 USC § 2255, the traditional 28 USC § 2241 petition for habeas corpus will likely be available under the § 2255(e) saving clause. The extent of that remedy will be further defined in Jones v. Hendrix, Case No. 21-857, due to be decided by the Supreme Court in the next three weeks.

Because the Dubin decision is a statutory interpretation and not a constitutional holding (despite Justice Gorsuch’s persuasive argument that it could easily have been), the route of filing a second or successive § 2255 motion (under the rules set up by § 2255(h)) is probably unavailable.

Dubin v. United States, Case No. 22-10, 599 U.S. —, — S.Ct. —, — L.Ed.2d —, 2023 U.S. LEXIS 2420 (June 8, 2023)

New York Times, Supreme Court Narrows the Reach of an Aggravated Identity Theft Law (June 8, 2023)

– Thomas L. Root

Supremes Skeptical About Identity Theft Policy – Update for March 6, 2023

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We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.

AGGRAVATED IDENTITY THEFT HAS ROUGH RIDE AT SCOTUS

identitytheft230306The government’s habit of using the two-year mandatory consecutive minimum sentence for aggravated identity theft provided by 18 USC § 1028A as a cudgel against simple fraud took its own beating during last week’s Supreme Court oral argument.

The case concerned David Dubin, who was convicted of healthcare fraud. Dubin was accused of bilking Medicaid by misrepresenting who had conducted medical testing and rounding up the time spent carrying out each test from 2.5 to 3 hours, so that a bill submitted for services to Peter Patient was higher than it should have been.

Dubin’s sentence included a two-year mandatory minimum term for “aggravated identity theft” because the Medicaid submission included the identity of the patient but misrepresented the particulars of the test. As The New York Times put it and countless federal defendants who have been clobbered by § 1028A’s extra two-year consecutive sentence, the statute “does not seem to require identity theft in the ordinary understanding of that phrase.”

Dubin’s lawyer argued that his client had not used a patient’s identity in any meaningful way: “It has to be a lie about who receives services or who obtains services,” he said, “not a lie about how those services were rendered.”

The Supreme Court was generally sympathetic. Justice Neil Gorsuch  said, “If the government’s theory is correct and every time I order salmon at a restaurant I’m told it’s fresh, but it’s frozen, and my credit card is run for fresh salmon, that’s identity theft.” The government’s position in the case, Gorsuch suggested, would transform everyday fraud into identity theft “whether it’s in a restaurant billing scenario, a health care billing scenario, or lawyers who round their hours up.”

Justice Ketanji Jackson appeared to agree. “It’s like every fraud in the world,” she told the government’s lawyer, “And you just admitted in response to Justice Thomas that it could be a teeny, teeny fraud.”

Justice Sonia Sotomayor said “the vagueness” of the statute—a due process issue—”is a problem.” She noted that it is hard to nail down the government’s definition of the crime “because every time you point to something that seems absurd, they come up with a limiting rule.” She complained that “the issue of vagueness permeates this statute,” and mentioned the rule of lenity, which favors a narrow reading of ambiguous criminal laws.

Justice Clarence Thomas asked the government where its position that any fraud, no matter how small, “stand[s] in terms of vagueness, notice to the world, fair notice to the world? I’m not sure most waiters in America appreciate that they’re committing identity theft when they bill for that bottle of wine.”

identitytheft1028A230306Dubin’s lawyer said said § 1028A’s mandatory minimum sentence was “a very strong cudgel to use against people to procure pleas in very low-level fraud cases. And that’s not what Congress [] aimed for in this case. Congress wasn’t trying to create a two-year mandatory minimum all of a sudden for ordinary fraud offenses. It was aimed at a particular new form of misconduct that’s simply not present in the words ‘aggravated identity theft.’”

Dubin v. United States, Case No. 22-10 (Oral argument, Feb 27, 2023)

The New York Times, Supreme Court Seems Skeptical of Broad Sweep of Identity Theft Law (February 27, 2023)

Reason, SCOTUS Questions the Government’s Absurdly Broad Definition of ‘Aggravated Identity Theft’ (March 2, 2023)

– Thomas L. Root

Supremes Mull Identity Theft – Update for February 27, 2023

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We post news and comment on federal criminal justice issues, focused primarily on trial and post-conviction matters, legislative initiatives, and sentencing issues.

GOOD INTENTIONS RUN AMOK?

almaty230227There was a time when the still-nascent Internet was spawning a land-office business in identity theft. Aided by “cyberspace,” hackers, code crackers and slackers had stopped wasting time with all  the chatroom yakkers, and instead were using your personally identifiable information (PII) to get new credit cards in your name. Next thing you know, you had bought a 400,000-tenge set of new tires in Almaty, Kazakhstan, the same day you had a 200,000-peso steak dinner in Ushuaia, Argentina.

This use of an innocent person’s PII to get a bogus line of credit and sticking them with the consequences became known as “identity theft.” And it was perceived as a real problem.  Congress responded with 18 USC § 1028A, the “aggravated identify theft” statute.

Just as the government is loathe to ever let a serious crisis go to waste, the Dept of Justice has  broadly applied the federal identity theft statute to hammer situations that are nowhere close to the hold that all sorts of misconduct that happens to use someone’s name or personal information in the offense is aggravated identity theft.

ushuia230227The statute imposes a two-year mandatory minimum sentence on any person who, “during and in relation to” certain enumerated felonies, “knowingly transfers, possesses, or uses without lawful authority, a means of identification of another person.” And the government loves offenses with mandatory minimums.

Today, the brakes may be applied to § 1028A (lucky we have those new tires). SCOTUS will consider the reach of the statute in Dubin v. United States.

Dr. Dubin, the managing partner of a psychological services company that provided mental health testing to youths at emergency shelters, was convicted of Medicaid fraud for a claim he submitted for a patient’s treatment. The patient had in fact been treated by the practice and no one doubts the Doc had the right to submit the claim. But the government argues that Dr Dubin overbilled for the treatment provided, and that ran afoul of § 1028A.

Dr. Dubin did not commit identity theft in any normal sense. No Argentina steaks, no Kazakh tires. But the statute’s language, the government argues, means that the Doc’s conduct “squarely fits” within the statutory text: As SCOTUSBlog put it, the government contends that “he ‘used’ the patient’s name ‘in relation to’ health care fraud, and he ‘plainly acted’ without ‘lawful authority’ when he committed the fraud.”

words221110Dubin’s lawyers argue that the statutory phrase ‘in relation to’ must be read in tandem with the verb ‘uses.’ Dubin contends that the statute “requires a meaningful nexus between the employment of another’s name and the predicate offense.” Using another’s identity “without lawful authority” requires a showing that the defendant used another’s person’s name “without permission that was lawfully acquired.”

The 5th Circuit ruled for the government, and on rehearing the case en banc, upheld the conviction by a razor-thin 9-8 margin.

Writing in Reason, Berkeley law professor Orin Kerr said that “the stakes are high. A lot of crimes are technically felonies under Title 18 but are pretty low-level felonies, the kind of thing likely to lead to probation or at most a short prison term. But if § 1028A applies, it tacks on a two-year prison sentence. So you could have a probation offense that becomes a two-years-in-jail offense if § 1028A is triggered, with the § 1028A punishment dwarfing the predicate felony punishment.”

SCOTUS Relists Grants Safety-Valve Cert Petition: [Update]:  The Supreme Court granted certiorari to Pulsifer v. United States on February 27.  The case will be argued next fall].

The drug safety-valve statute, 18 USC 3553(f), provides that a sentencing court may ignore drug mandatory minimums if (among other requirements) it finds that the defendant does not have (A) more than 4 criminal history points, excluding any criminal history points resulting from a 1-point offense, as determined under the sentencing guidelines; (B) a prior 3-point offense, as determined under the sentencing guidelines; and (C) a prior 2-point violent offense, as determined under the sentencing guidelines.

safetyvalv200618Pulsifer v. United States and Palomares v. United States ask whether a defendant is ineligible for safety valve relief from the mandatory minimum if his or her criminal history runs afoul of any one of the disqualifying criteria or only if his or her criminal history runs afoul of all three disqualifying criteria, subsections (A), (B), and (C). Circuits are divided on the issue 3-4. John Elwood of SCOTUSBlog predicts that of the two cases, “probably at least one will get the grant.”

Last week, the 4th Circuit joined the debate, holding in United States v. Jones that a defendant has to lose on all three criteria before he or she can be denied the safety valve. The Circuit said, “Ultimately, whether or not this is a prudent policy choice is not for the judiciary to decide: that determination lies solely with the legislative branch. And “the Government’s request that we rewrite 3553(f)(1)’s ‘and’ into an ‘or’ based on the absurdity canon is simply a request for a swap of policy preferences… We cannot “rewrite Congress’s clear and unambiguous text” simply because the Government believes it is better policy for the safety valve to apply to fewer defendants.

Dubin v. United States, Case No 22-10 (oral argument Feb 27, 2023)

SCOTUSBlog.com, Literalism vs. lenity in a case on the scope of federal identity theft (February 24, 2023)

Reason, Thoughts on Dubin v. United States and the Aggravated Identity Theft Statute (February 19, 2023)

United States v. Jones, Case No 21-4605, 2023 U.S. App. LEXIS 3963 (4th Cir., February 21, 2023)

– Thomas L. Root