Supreme Court Ruling Narrows Reach of Identity Theft Law
The Supreme Court has ruled against the government, which means federal prosecutors will have to curb identity theft charges and restrict them to cases where the misuse of another person’s identification is the crux of the criminal offense, rather than the current broad interpretation that allows identity theft charges for fraudulent billing, where the use of another person’s identification is merely an ancillary feature of a billing method.
Aggravated identity theft carries a mandatory jail term of 2 years in addition to any sentence for the predicate felony. Prior to the Supreme Court ruling, there was no distinction between an identity thief stealing an individual’s identity and running up huge debts, a lawyer rounding up bills and only charging full hours, a waitress overcharging customers, and a doctor overbilling Medicaid. The Supreme Court decision related to the latter.
William and David Dubin are father and son psychologists who ran a mental health testing company called Psychological ARTs. In 2013, David Dubin was examining a patient when he was informed by his father that the patient’s Medicaid benefits had been exhausted and cut the evaluation short. David Dubin then instructed an employee to file a reimbursement claim to Medicaid that included the patient’s name and Medicaid ID, resulting in the canceled examination qualifying for payment. That fraudulent claim resulted in a payment of $338.
In 2017, federal prosecutors indicted William and David Dubin on 20 counts related to the overbilling of Medicaid, which included 6 counts of aggravated identity theft and resulted in the practice receiving around $300,000 in fraudulent reimbursements. In 2019, David Dubin was sentenced to one year in jail for submitting inflated bills and 2 years for aggravated identity theft, with the sentences to run consecutively. Dubin’s legal team appealed but the U.S. Court of Appeals for the 5th Circuit upheld the identity theft conviction, as under the broad interpretation of the law, it is a felony to use another person’s identity without lawful authority, and David Dubin used patient’s names and Medicaid ID numbers to submit exaggerated claims. The Supreme Court unanimously ruled that it could not support “such a boundless interpretation” of the Identity Theft Penalty Enhancement Act of 2004.
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Prosecutors argued that while the context of the fraud in Dubin’s case was relatively small, it was the correct reading of the statute and that the flat two-year jail term should stand regardless of the scale of the fraud. Under the letter of the law, small-scale fraud and large-scale fraud carry the same sentence for aggravated identity theft. The Supreme Court disagreed.
“Patient names or other identifiers will, of course, be involved in the great majority of healthcare billing, whether Medicare for massages, or for ambulance stretcher services,” said Justice Sonia Sotomayor in the ruling. “Patient names will be on prescriptions, and patients committing fraud on their own behalf will often have to include the names of others on their forms, such as doctors or employers. Under the Government’s own reading, such cases are ‘automatically identity theft,’ independent of whether the name itself had anything to do with the fraudulent aspect of the offense.” She also pointed out that if she sided with the government then the same interpretation could even be applied to mail fraud, where using another person’s name to address a letter to them could similarly be classed as aggravated identity theft and would be punishable with a 2-year mandatory jail term. Dubin’s attorney, Jeffrey Fisher, said the same 2-year jail term could also be imposed on any person who submits a form on behalf of another person that contains a misrepresentation.
“Whoever among you is not an ‘aggravated identity thief,’ let him cast the first stone,” said Justice Neil Gorsuch, concurring with the court’s decision that siding with the 5th Circuit would potentially lead to broad prosecutions in cases involving another person’s identity. “Depending on how you squint your eyes, you can stretch (or shrink) [the Identity Theft Penalty Enhancement Act] meaning to convict (or exonerate) just about anyone,” wrote Gorsuch, potentially putting “every bill splitter who has overcharged a friend using a mobile-payment service like Venmo,” at risk of a 2-year jail term, suggesting the law is vague to the point where it is not much better than a Rorschach test. “The statute fails to provide even rudimentary notice of what it does and does not criminalize,” wrote Gorsuch.
