Edward Gamboa, CR6536 (2024)

DECISION

Petitioner, Edward Gamboa, was the sole owner of Joy Behavioral Health, LLC, a Nevada company that participated in the Medicaid program as a provider of mental and behavioral health services.  Investigators from the state’s Medicaid Fraud Control Unit determined that Petitioner Gamboa, acting through his company, submitted false claims to the Medicaid program.  Petitioner and his company were indicted, and Petitioner pleaded nolo contendere to one misdemeanor count of Acting Without Lawful Authority.  The court found him guilty as charged. 

Based on his conviction, the Inspector General (IG) has excluded Petitioner for seven years from participating in Medicare, Medicaid, and all federal health care programs, as provided for in section 1128(a)(1) of the Social Security Act (Act). 

Petitioner appeals.  

For the reasons discussed below, I find that the IG properly excluded Petitioner and that the seven-year exclusion falls within a reasonable range. 

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Background

In a letter dated March 29, 2024, the IG notified Petitioner that he was excluded from participating in Medicare, Medicaid, and all federal health care programs for a minimum period of seven years because he had been convicted of a “criminal offense related to the delivery of an item or service under Medicare or a State health care program.”  The letter explained that section 1128(a)(1) of the Act authorizes the exclusion.  IG Ex. 1.  

Petitioner timely requested review. 

Exhibits.  The IG has submitted a written brief (IG Br.) with five exhibits (IG Exs. 1-5).  Petitioner has submitted his own brief (P. Br.) with one exhibit (P. Ex. 1). 

In the absence of any objections, I admit into evidence IG Exs. 1-5 and P. Ex. 1.  

Hearing on the written record.  The parties agree that an in-person hearing is not necessary and that this matter may be decided based on the written record.  IG Br. at 5; P. Br. at 4. 

Discussion

1. Petitioner must be excluded from program participation for a minimum of five years because he was convicted, under state law, of a criminal offense related to the delivery of services under the Medicaid program. Act § 1128(a)(1).1

Under section 1128(a)(1) of the Act, the Secretary of Health and Human Services must exclude an individual who has been convicted under federal or state law of a criminal offense related to the delivery of an item or service under Medicare or a state health care program.  42 C.F.R. § 1001.101(a). 

Petitioner Gamboa owned and managed a company called Joy Behavioral Health, LLC.  The company was enrolled in the Medicaid program and provided rehabilitative mental health services to Medicaid beneficiaries.  IG Ex. 4 at 1-2; IG Ex. 5 at 1, 2.  Nevada’s Medicaid Fraud Control Unit investigates criminal financial fraud within the state’s Medicaid program.  IG Ex. 5 at 1.  The Unit’s investigators reviewed Medicaid claims data and the company’s documentary information.  They also interviewed a company employee.  The investigators determined that Petitioner Gamboa “failed to obtain necessary records from Medicaid providers to substantiate claims made to Medicaid” and therefore lacked the authority to submit claims to Medicaid.  IG Ex. 5 at 2. 

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The investigators also concluded that the company, “by and through the actions of” Petitioner Gamboa, submitted claims to and accepted payment from the Medicaid program while “intentionally” failing to maintain necessary records to establish “the nature of the goods or services for which the claims were submitted or payment was received.”  IG Ex. 5 at 2. 

A criminal complaint, filed on May 9, 2023, in Clark County Justice Court, charged Petitioner Gamboa with one count of “Acting Without Lawful Authority,” in violation of Nev. Rev. Stat. § 207.230, a misdemeanor.  IG Ex. 4 at 3.  The complaint charged Petitioner Gamboa’s company with “Intentional Failure to Maintain Adequate Records,” in violation of Nev. Rev. Stat. § 422.570(1), a gross misdemeanor.  IG Ex. 4 at 2-3. 

On June 7, 2023, Petitioner pleaded nolo contendere to the charge of Acting Without Lawful Authority.  The court accepted his plea and found him guilty as charged.  The court ordered Petitioner to pay $40,000 in restitution to the Nevada Attorney General’s Office.  IG Exs. 2, 3. 

Petitioner’s conviction was thus plainly related to the delivery of services under Medicaid, a state health care program. 

Petitioner, however, argues that his offense was not program-related because he was not convicted of an offense listed in the Medicaid chapter of the Nevada Revised Statutes.  He also maintains that, although his company (which was ordered to pay $110,000 in restitution to the Nevada Attorney General’s Office) may have admitted to submitting the false claims, he did not make such admissions “in his individual capacity.”  P. Br. at 2; see P. Ex. 1.  Inasmuch as Petitioner was the 100% owner and sole manager of the company, he is unquestionably responsible for the company’s misdeeds.  

In any event, it is well-settled that, in determining whether a conviction is program-related within the meaning of section 1128(a)(1), I may look beyond the language of the statute under which Petitioner was convicted.  The IG may rely on extrinsic evidence to explain the circumstances underlying a conviction.  The regulations specifically provide that evidence of “crimes, wrongs, or acts other than those at issue in the instant case is admissible in order to show motive, opportunity, intent, knowledge, preparation, identity, lack of mistake, or existence of a scheme.”  42 C.F.R. § 1005.17(g); see Narendra M. Patel, M.D., DAB No. 1736 at 7 (2000), aff’d, Patel v. Thompson, 319 F.3d 1317 (11th Cir. 2003) (“We thus see nothing in section 1128(a)(2) that requires that the necessary element of the criminal offense must mirror the elements of the exclusion authority, nor that all statutory elements required for an exclusion must be contained in the findings or record of the state criminal court.”); Timothy Wayne Hensley, DAB No. 2044 (2006); Scott D. Augustine, DAB No. 2043 (2006); Lyle Kai, R.Ph., DAB No. 1979 at 5 (2005), aff’d, Kai v. Leavitt, No. 05-00514 BMK (D. Haw. July 17, 2006); Tanya A. Chuoke, 

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R.N., DAB No. 1721 (2000); Berton Siegel, D.O., DAB No 1467 at 5 (1994); Carolyn Westin, DAB No. 1381 (1993), aff’d, Westin v. Shalala, 845 F. Supp. 1446 (D. Kan. 1994); Bruce Lindberg, D.C., DAB No. 1280 (1991). 

Petitioner was charged and convicted of acting without lawful authority.  Because he did not obtain necessary records from alleged service providers, he was not authorized to submit claims to Medicaid.  IG Ex. 4 at 3 (Count II).  His conviction is thus directly related to the delivery of an item or service under the Medicaid program, and he is subject to exclusion under section 1128(a)(1). 

2. Based on one aggravating factor and no mitigating factors, the seven-year exclusion falls within a reasonable range.

An exclusion brought under section 1128(a)(1) must be for a minimum period of five years.  Act § 1128(c)(3)(B); 42 C.F.R. § 1001.102(a).  I now consider whether the length of the exclusion, beyond five years, falls within a reasonable range.  See Edwin L. Fuentes, DAB No. 2988 at 8-9 (2020); Hussein Awada, M.D., DAB No. 2788 at 5-6 (2017).  So long as that length falls within a reasonable range, my role is not to second-guess the IG’s judgment.  Jeremy Robinson, DAB No. 1905 at 5 (2004) (ALJ review must reflect the deference accorded to the IG by the Secretary). 

The presence of an aggravating factor, not offset by any mitigating factor or factors, justifies lengthening the mandatory period of exclusion.  “Simply meeting the threshold for an aggravating factor is a clear indication of untrustworthiness.”  Awada, DAB No. 2788 at 10. 

Among the factors that may serve as a basis for lengthening the period of exclusion is the one that the IG relies on in this case:  the acts that resulted in the conviction, or similar acts, were committed over a period of one year or more.  42 C.F.R. § 1001.102(b)(2).2

The length of participation in criminal activity may distinguish the individual whose lapse in integrity is short-lived from those who display a lack of integrity over a longer period of time.  “Participation in, or even knowing but silent acquiescence in, a continuing fraudulent scheme that could be expected to cause repeated misrepresentations and repeated harm over a period of time evidences a continuing lack of integrity.”  Donald A. Burstein, Ph.D., DAB No. 1865 at 8 (2003). 

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Petitioner concedes that he “failed to obtain the necessary records to support the claims submitted to Nevada Medicaid . . . for a period of over one year,” but, again, argues that his company committed the offense.  In his view, since his company pleaded guilty to the charge, he should not be held responsible.  P. Br. at 3-4.  I do not agree that Petitioner is not accountable for his company’s crimes.  As noted in Burstein, even “silent acquiescence” in a long-running criminal scheme justifies increasing the period of exclusion.  And Petitioner’s participation in his company’s misconduct went well beyond “silent acquiescence.” 

In any event, Petitioner, individually, was convicted of activity that lasted for more than a year.  From on or about February 2020 through July 2022, Petitioner, through his company “submitted numerous claims to Medicaid for reimbursement.”  IG Ex. 4 at 2.  Count II of the criminal complaint – on which he was convicted – explains that, in submitting those claims, Petitioner Gamboa “failed to obtain the necessary records from the alleged service providers authorizing [him] to submit claims to Medicaid for the purported services.”  IG Ex. 4 at 3.  Because he did not have the necessary records to substantiate the claims, Petitioner Gamboa was not authorized to submit them.  “All of which” violates Nev. Rev. Stat. § 207.230.  IG Ex. 4 at 3 (Complaint Count II). 

Thus, on its face, Petitioner’s conviction establishes that he engaged in his criminal activities for well over a year (two years and five months).  His criminal activity thus cannot be considered a “short-lived” lapse and justifies the relatively modest increase in his period of exclusion, from the mandatory five years to seven years. 

No mitigating factors.  The regulations consider mitigating just three factors:  1) a petitioner was convicted of three or fewer misdemeanor offenses and the resulting financial loss to the program was less than $5,000; 2) the record in the criminal proceedings demonstrates that a petitioner had a mental, physical, or emotional condition that reduced his culpability; and 3) a petitioner’s cooperation with federal or state officials resulted in others being convicted or excluded, or additional cases being investigated, or a civil money penalty being imposed.  42 C.F.R. § 1001.102(c).  

Characterizing a mitigating factor as “in the nature of an affirmative defense,” the Board has ruled that Petitioner has the burden of proving any mitigating factor by a preponderance of the evidence.  Barry D. Garfinkel, M.D., DAB No. 1572 at 8 (1996). 

Petitioner concedes that no mitigating factors offset the significant aggravating factor present in this case.  P. Br. at 4.  His crime resulted in program losses far greater than $5,000.  No evidence suggests that he had a mental, physical, or emotional condition that reduced his culpability.  He did not cooperate with federal or state officials.  

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Conclusion

The IG properly excluded Petitioner from participating in Medicare, Medicaid, and other federal health care programs.  So long as the period of exclusion is within a reasonable range, based on demonstrated criteria, I have no authority to change it.  Joann Fletcher Cash, DAB No. 1725 at 7 (2000), citing 57 Fed. Reg. 3298, 3321 (Jan. 29, 1992). 

I find that the seven-year exclusion falls within a reasonable range.