Imad Hussein Soueid, DAB CR5190 (2018)

Department of Health and Human Services
Civil Remedies Division

Docket No. C-18-837
Decision No. CR5190


I sustain the determination of the Inspector General (I.G.) to exclude Petitioner, Imad Hussein Soueid, from participating in Medicare, Medicaid, and other federally funded health care programs for a period of at least 20 years.

I. Background

The I.G. filed a brief, a reply brief, and seven proposed exhibits, identified as I.G. Ex. 1‑7, in support of his exclusion determination. Petitioner filed a brief challenging the length of the exclusion and four proposed exhibits, identified as P. Ex. 1-4. Neither party requested that I convene an in-person hearing. I receive the parties' exhibits into the record.

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II. Issues, Findings of Fact, and Conclusions of Law

A. Issue

The I.G. excluded Petitioner pursuant to the requirements of section 1128(a)(1) of the Social Security Act (Act), a section that requires the exclusion of any individual convicted of a criminal offense related to the delivery of an item or service under Medicare or a state Medicaid program. Petitioner did not dispute the I.G.'s authority to exclude him. Rather, he challenged the length of the exclusion - 20 years - arguing that it is unreasonable. The sole issue in this case, therefore, is whether the 20-year exclusion is unreasonable.

B. Findings of Fact and Conclusions of Law

Although there is no dispute that the I.G. must exclude Petitioner, the crimes that Petitioner committed are nevertheless an important element of the I.G.'s exclusion determination and of my decision that the I.G.'s exclusion determination is not unreasonable. On November 16, 2016, Petitioner, a pharmacist, pled guilty to one count of a federal criminal indictment that charged him with conspiracy to commit health care fraud and wire fraud. I.G. Ex. 3. In pleading guilty, Petitioner admitted that for a period of about four and one-half years, from October 2009 to April 2014, he willfully conspired to commit fraud by: paying illegal kickbacks to Medicare beneficiaries in order to induce them to bring their prescription medications to his pharmacy and submitting false claims to Medicare and to Michigan's Medicaid program for prescriptions that he alleged to have filled. Id. at 2-3.

Petitioner engaged in a sophisticated scheme to defraud Medicare and Michigan's Medicaid program. He filled prescriptions for medications that he supplied to Medicare beneficiaries and Medicaid recipients. He billed Medicare and Medicaid for those prescriptions and was reimbursed by these programs. However, he repurchased the prescriptions from the beneficiaries and recipients and resold the medications unlawfully. Thus, Medicare and Medicaid paid for prescription medications that beneficiaries and recipients did not use, and Petitioner, effectively, was able to sell those medications twice. I.G. Ex. 2 at 6-7.

The federal district court judge who accepted Petitioner's plea ultimately sentenced Petitioner to 42 months' incarceration and to pay restitution of $6.2 million. I.G. Ex. 7 at 1, 2, 6. The length of Petitioner's prison sentence included a 20 percent reduction from the term suggested by federal sentencing guidelines. In establishing the prison sentence, the federal district court judge took into account the United States' Attorney's representation that Petitioner cooperated substantially with prosecuting authorities. P. Ex. 3.

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Exclusions imposed pursuant to section 1128(a)(1) of the Act must be for a minimum period of at least five years. Act, § 1128(c)(3)(B). The Act gives the I.G. discretion to exclude for a lengthier period than the minimum statutory period.

The purpose of any exclusion is remedial. Individuals who commit acts mandating exclusion are deemed by law to be untrustworthy to provide care to program beneficiaries and recipients and to receive program funds. In any case in which the I.G. determines to exclude an individual for more than the statutory minimum, the ultimate question becomes whether an exclusion of more than the minimum is warranted by that individual's untrustworthiness to provide care.

The Secretary published regulations that establish criteria to be used in determining untrustworthiness and the length of exclusion. For cases involving section 1128(a)(1) of the Act, the governing regulation is 42 C.F.R. § 1001.102. This section defines, at subsections (b) and (c), aggravating and mitigating factors that may be considered in determining the reasonable length of exclusion. These factors function as rules of evidence. They establish and limit what is relevant in addressing the length of exclusion. Evidence that does not fall within one of the factors is, as a matter of law, irrelevant and may not be considered.

The regulation does not dictate specific outcomes. In any case in which the length of an exclusion is at issue, the I.G. and I must consider any evidence falling within the aggravating and mitigating factors and answer this question: what length of exclusion is reasonable in order to protect program funds and program beneficiaries and recipients from an untrustworthy individual?

In this case, the evidence relates to three of the aggravating factors and one of the mitigating factors.

Evidence relates to the following aggravating factors. First, Petitioner's crimes or similar acts caused, or were intended to cause, a financial loss to a government program of $50,000 or more. 42 C.F.R. § 1001.102(b)(1). Second, Petitioner committed his crimes or similar acts over a period of more than a year. 42 C.F.R. § 1001.102(b)(2). Third, Petitioner was sentenced to a period of incarceration. 42 C.F.R. § 1001.102(b)(5).

The evidence addressing these aggravating factors establishes that Petitioner committed his crimes over a period of about four and one-half years, from October 2009 until April 2014. I.G. Ex. 3 at 2. It establishes that he was sentenced to pay restitution for those crimes of $6.2 million. And, it proves that he was sentenced to 42 months' incarceration. I.G. Ex. 7 at 2, 6.

Evidence relates to one of the mitigating factors. Petitioner cooperated with prosecuting authorities in the investigation and prosecution of other individuals. 42 C.F.R.

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§ 1001.102(c)(3). That cooperation led to a recommendation by the United States Attorney for a reduction in Petitioner's prison sentence by 20 percent. P. Ex. 3 at 12-13.

The evidence relating to aggravating and mitigating factors, when considered in its entirety, establishes Petitioner to be highly untrustworthy and to merit the 20-year exclusion imposed by the I.G. I find the exclusion to be reasonable based on this evidence. As I have stated, Petitioner engaged in a sophisticated scheme to defraud Medicare and Michigan's Medicaid program. Petitioner deliberately induced numerous program beneficiaries and recipients to participate in his fraud by selling back to him prescription medications for which he had billed Medicare and Medicaid, thereby allowing him to pocket program money without actually dispensing the medications and then allowing him to resell the medications fraudulently. He perpetrated this scheme over a long period of time - four and one-half years. The length of time during which Petitioner committed his crimes is powerful evidence of Petitioner's intent to systematically steal program funds. It also is evidence of highly calculated fraud. The amount of restitution that that Petitioner was sentenced to pay - $6.2 million - is graphic evidence of the extent of Petitioner's crimes and the deliberateness with which he perpetrated those crimes. Finally, a sentence of incarceration of 42 months, even when reduced from a potentially longer sentence, defines the seriousness of Petitioner's crimes.

I have considered Petitioner's cooperation, and I find that it does not mitigate the length of Petitioner's exclusion beneath the 20 years that the I.G. determined to impose. Petitioner cooperated with prosecuting authorities in order to have the penalties imposed against him reduced. The sentencing judge reduced his sentence somewhat in order to reward Petitioner for cooperating. But, that doesn't gainsay the seriousness of Petitioner's crimes as is established by evidence relating to aggravating factors, nor does his cooperation show Petitioner to be any more trustworthy than the I.G. determined him to be. I find that exclusion for at least 20 years is reasonable here even if Petitioner cooperated with prosecuting authorities and even if that cooperation proved to be useful.

Petitioner raises several arguments to support further mitigation of the length of his exclusion. I find these arguments to be without merit.

First, Petitioner contends that he should be given credit for the fact that he voluntarily ceased engaging in criminal fraud in 2014, about two years before he was indicted for that fraud. He argues that his voluntary cessation of criminal conduct is evidence of his trustworthiness.

I find that argument to be irrelevant because the regulatory factors do not allow for mitigation based on voluntary cessation of criminal conduct. Moreover, the evidence offered by Petitioner as to his cessation of fraud is inconclusive as to why he ceased engaging in fraud. There is no basis for me to speculate as to the reasons why Petitioner ceased committing crimes prior to his being indicted. Indeed, there is nothing in

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Petitioner's indictment that proves that he ceased committing crimes in April 2014. The indictment merely charges that he conspired to defraud Medicare and Medicaid up until that date. It suggests neither that he stopped committing crimes afterward nor that he continued to engage in them.

Petitioner argues next that the federal district court judge may have incorrectly calculated the $6.2 million in restitution that Petitioner was sentenced to pay. That is an attempt by Petitioner to relitigate a judgment that he accepted as part of a plea agreement. Although Petitioner denies that he is now collaterally attacking the judgment imposed against him, that is precisely what he is doing. That is impermissible under regulations governing exclusion determinations. 42 C.F.R. § 1001.2007(d).

Petitioner asserts that there is evidence relating to a second mitigating factor, which the I.G. failed to consider, but which I should consider and use as grounds for reducing the length of exclusion. Citing 42 C.F.R. § 1001.102(c)(2), Petitioner contends that he suffers from mental disabilities that diminish his culpability for the crimes that he committed.

The section at issue allows for evidence relating to an excluded individual's mental condition to be considered as mitigating only where a sentencing court determines that such evidence reduced that individual's culpability. 42 C.F.R. § 1001.102(c)(2). It is not sufficient for an excluded individual to prove that he offered evidence to the sentencing court of his reduced culpability due to some mental or emotional impairment. In order to be relevant, there must be a finding by the court that the excluded individual had diminished culpability due to his or her mental or emotional condition. Begum v. Hargan, 2017 U.S. Dist. LEXIS 193281, at *13 (N.D. Ill. 2017); Patel v. Shalala, 17 F. Supp. 2d 662, 667 (W.D. Ky. 1998).

Petitioner failed to meet this standard. The presentencing report in his case shows that he suffered from anxiety and depression at least as of January 2014. P. Ex. 4 at 10-11. He alleges also that he suffered from alcoholism. At the time of Petitioner's sentencing, his attorney requested that Petitioner receive treatment for alcoholism. P. Ex. 3 at 8. However, although facts concerning Petitioner's mental and emotional problems were presented to the sentencing judge, there is nothing in the record of Petitioner's sentencing to show that the judge made a finding of diminished culpability.

Finally, Petitioner offers essentially equitable arguments to support his contention that exclusion for at least 20 years is unfair. Petitioner asserts that the exclusion will deprive him of his livelihood as a pharmacist, preclude him from providing for his family, impede his efforts at rehabilitation, and bar him from serving his community. I will not address the merits of these arguments because I have no authority to hear them. I must confine my analysis of the reasonableness of an exclusion determination to those factors defined

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by regulation, and equitable considerations are not among those factors. Charice D. Curtis, DAB No. 2430 (2011).