[co-author: Gradon Cowan*]
On June 8, 2023, the Supreme Court issued a unanimous decision holding that the aggravated identity theft statute –and its mandatory minimum of two years – is not triggered merely because someone else’s identification facilitates or furthers the offense in some way. See Dubin v. United States. We have seen a growing trend of the government adding aggravated identity theft in healthcare fraud cases. As a result of this decision, we may see that statute far less.
Background
Under 18 U.S.C. §1028A(a)(1), a defendant commits aggravated identity theft when, “during and in relation to any [predicate offense], knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person.” Persons convicted under section 1028A(a)(1) face a mandatory minimum sentence of two years in prison.
In Dubin, petitioner was responsible for submitting a fraudulent Medicaid reimbursement claim that overstated the qualifications of the employee who performed psychologic testing. In order to submit the claim, petitioner included the patient’s Medicaid reimbursement number. The government argued that use of the patient’s Medicaid number triggered the aggravated identity theft statute.
In our experience as former federal prosecutors, we know that the government often adds this mandatory minimum in fraud cases, such as healthcare fraud, in order to induce pleas. In other words, we believe the government often charges aggravated identity theft because the government knows defendants may be more likely to plead guilty if the government promises to dismiss the mandatory minimum counts. But in doing so, the government often adds the charge when the identity is merely incidental to the fraud scheme.
Opinion
The Supreme Court declined to apply section 1028A(a)(1) broadly to any case where identification is used in furtherance of the predicate offense. Accepting the government’s position to read it broadly, according to the Supreme Court, results in the overuse of the statue, placing “garden-variety overbilling at the core of §1028A.” Justice Sotomayor wrote, “[t]he government’s reading would sweep in the hour-inflating lawyer, the steak-switching waiter, the building contractor who tacks an extra $10 onto the price of the paint he purchased. So long as they used various common billing methods, they would all be subject to a mandatory two years in federal prison.”
Instead, the Court accepted Dubin’s narrower position that section 1028A(a)(1) applies when “the defendant’s misuse of another person’s means of identification is at the crux of what makes the underlying offense criminal, rather than merely an ancillary feature of a billing method” (emphasis added).
Consequences of the Decision
The decision today significantly limits the government’s ability to induce pleas in white collar cases, especially in healthcare fraud, where identities are routinely used in submitting claims to the government. Now, the government may only use the identity theft statute when the identity itself is at the “crux” of the criminal offense.
*Graydon Cowan is a summer associate in the firm's Dallas office.
