In an extremely consequential decision issued last week, the United States Supreme Court reined in what the Court termed the government’s “boundless interpretation” of the aggravated identity theft statute, 18 U.S.C. § 1028A. Section 1028A provides for a mandatory two-year prison sentence for “any person who, during and in relation to any predicate offense knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person.” The predicate offenses include, among many others, healthcare fraud, wire fraud, and mail fraud.

The “Crux” of the Decision

The government has long charged Section 1028A in cases where the alleged “use” of the means of identification was at most peripheral to the commission of the underlying predicate offense, including where a name or other means of identification just happens to be part of the payment or billing method used in the commission of the offense. That “exceedingly broad” interpretation has given the government enormous leverage in garden variety fraud cases that would never be thought of as involving identity theft in any colloquial use of the term. In Dubin v. United States, the Court rejected the government’s interpretation, holding that “[a] defendant ‘uses’ another person’s means of identification ‘in relation to’ a predicate offense when this use is at the crux of what makes the conduct criminal.” As the court elaborated, “being at the crux of the criminality requires more than a causal relationship, such as ‘facilitation’ of the offense or being a but-for for cause of its ‘success.’” In other words, “the means of identification specifically must be used in a manner that is fraudulent or deceptive.”

Background

Dubin is a good example of how the government’s interpretation resulted in what the Court termed a highly “implausible” result. Dubin, who helped manage a psychological services company, submitted a claim for reimbursement to Medicaid for psychological testing by a licensed psychologist, whereas the testing had actually been performed by a professional without a formal psychologist degree. That falsehood inflated the amount of reimbursement. Despite the fact that the patient for whom the claim was submitted had in fact received psychological testing, the government charged Dubin with violating Section 1028A, arguing that the elements of that offense were automatically satisfied “because Dubin’s fraudulent billing included the patient’s Medicaid reimbursement number (a ‘means of identification’).” Although the district court denied Dubin’s post-trial challenge to his Section 1028A conviction, it explained that contrary Fifth Circuit precedent tied his hands and that it “‘hoped’ the conviction would “get reversed.’”

The Opinion

The district court’s hopes were fulfilled in the Supreme Court’s decision issued last week. The Court pointed to a host of contextual grounds to conclude that the government’s “implausible” result was wrong. Among other things, the Court pointed to Section 1028A’s title, “[a]ggravated identity theft,” and the fact that the broad term “uses” in the statute comes together with the verbs “transfers” and “possesses,” both of which “are most naturally read” in the context of the statute “to connote theft,” and identity theft in particular. The Court also adverted to the principle that it “will avoid reading incongruous breath into opaque language in criminal statutes.” It remarked that the government’s reading would sweep within Section 1028A’s reach a lawyer who inflates her hours, a waiter who serves flank steak but charges for filet mignon, and a building contractor who tacks an extra $10 onto the price of the paint he purchased. In the words of the Court, “[t]o say that such a result is implausible would be an understatement.”

Use of the Aggravated Identity Theft Statute Moving Forward

As a result, henceforth Section 1028A may only be charged where the use of another person’s means of identification “is at the crux” of what makes the conduct criminal. In Dubin, the petitioner’s use of the patient’s name was not at the crux of what made the underlying overbilling fraudulent. The crux of the healthcare fraud was a misrepresentation about the qualifications of Dubin’s employee. In what the Court found was a useful heuristic previously employed by the Sixth Circuit, Dubin’s fraud was in misrepresenting how and when services were provided to a patient, not who received the services.  

With this narrowed interpretation of Section 1028A, the government will no longer have this heavy hammer at its disposal to leverage pleas in run-of-the-mill fraud cases. Section 1028A will be reserved for true identity theft cases as Congress intended.