Justices Appear Ready to Limit Breadth of Identity Theft Law (1)

The US Supreme Court seemed likely to narrow the scope of a law that allows the federal government to tack on aggravated identity theft charges when someone else’s name is used in committing crimes such as healthcare fraud.

Several of the justices, including Justices Neil Gorsuch and Brett Kavanaugh, appeared concerned during arguments Monday that interpreting the Identity Theft Penalty Enhancement Act as broadly as the federal government argues it should be read would trap the unwary. The law carries a mandatory two-year prison sentence.

Kavanaugh noted the court has rejected the broadest interpretation of federal criminal statutes based on fair notice concerns in the past.

“So why does this case not fall within that concern and with that body of precedent with reading it as broadly as possibly could?” he asked.

At the center of the case is David Dubin, who was charged with healthcare fraud for overbilling Medicaid for services his psychological examination company provided to a child at an emergency shelter in Texas.

Because Dubin used the patient’s name in submitting the fraudulent bill, he was charged and convicted of aggravated identity theft, which doubled the sentence he received for healthcare fraud.

Predicate Offense

The Identity Theft Penalty Enhancement Act makes it a crime to knowingly transfer, possess, or use, without lawful authority, a means of identification of another person during and in relation to certain other felony crimes, which include other forms of federal fraud, theft of government property, and immigration crimes.

Vivek Suri, assistant to the solicitor general at the Justice Department, said Congress picked out a specific set of predicate crimes where aggravated identity theft is more likely to arise.

He told Kavanaugh there is no danger of giving federal prosecutors the power to turn otherwise law-abiding critizens into criminals.

“The statute at issue here only comes into play only if a predicate federal offense has already been committed,” Suri said.

But Justice Ketanji Brown Jackson reiterated the argument from Dubin’s attorney that the law applied to a long list of predicated offenses. “It’s like every fraud in the world,” she said. “And you’ve just admitted to Justice Thomas that it could be a teeny, teeny fraud.”

When you get down to it, Justice Elena Kagan said all healthcare fraud is done using people’s names. Suri countered, “there are a lot of different ways you can commit healthcare fraud without using a means of identification of another person without lawful authority in relation to that crime.” He said there’s fraud committed by patients, fraud committed by pharmaceutical companies and provider fraud where for example, a provider lies when enrolling in Medicaid.

Dubin argues he had the authority to use the patient’s name to bill Medicaid and never stole or made any misrepresentations about the patient’s identity. In upholding his identity theft conviction, he says the US Court of Appeals for the Fifth Circuit interpreted the term “use” in the statute too broadly.

The Fifth Circuit said Dubin had “used” the patient’s Medicaid identification number when he submitted a bill for reimbursement of incomplete testing. Under that reading, Dubin said a defendant commits identity theft any time he mentions or otherwise recites someone else’s name while committing a predicate offense.

“If the government is right and if the Fifth Circuit 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’s Congress’s careful design,” Jeffrey Fisher, an attorney with the Supreme Court Litigation Clinic at Stanford Law School, argued on behalf of Dubin.

The justices spent much of the arguments focused on the hypothetical of a server at a restaurant unknowingly committing identity theft by accidentally charging a customer for food that wasn’t ordered.

Gorusch said the court could say this reading of the statute was over broad and that it cannot possibly mean that every time he gets frozen salmon at a restaurant but is billed for fresh salmon that’s federal identity theft.

The case is Dubin v. United States, U.S., No. 22-10.