Wansa Nabih Makki, DAB CR6575 (2024)

DECISION

I uphold the determination of the Inspector General (IG) of the United States Department of Health and Human Services to exclude Wansa Nabih Makki (Petitioner) from participation in all federal health care programs for five years.

I.    Case Background and Procedural History

In a June 28, 2024 notice, the IG excluded Petitioner from participation in all federal health care programs under section 1128(a)(1) of the Social Security Act (Act).  See 42 U.S.C. § 1320a-7(a)(1); 42 C.F.R. § 1001.101(a).  The exclusion notice stated that Petitioner was convicted, in the United States District Court for the Eastern District of Michigan, of a criminal offense related to the delivery of an item or service under Medicare or a state health care program.  The IG imposed the five-year minimum length of exclusion.  42 C.F.R. § 1001.102(a); IG Ex. 1 at 1.

Petitioner requested a hearing before an administrative law judge on July 29, 2024, asserting that there is no legitimate basis for her exclusion and that the length of her exclusion is unreasonable.  Petitioner stated that she pleaded guilty to money laundering, not health care fraud, which is not related to the delivery of a health care item or service.

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On July 30, 2024, CRD acknowledged receipt of the hearing request, informed the parties that I would hold a prehearing conference, and issued my Standing Order. 

On August 21, 2024, I held a prehearing conference by telephone, the substance of which is summarized in my August 22, 2024 Order Following Prehearing Conference and Setting Schedule for Prehearing Submissions (August 22 Order). 

At the conference, I stated that the only issue I could decide in this case is whether the IG had a legitimate basis to impose an exclusion on Petitioner under section 1128(a)(1) of the Act.  42 C.F.R. § 1001.2007(a)(1)-(2).  I said that if I conclude that there was a legitimate basis for the exclusion, then the law requires the exclusion to last for a minimum of five years.  42 U.S.C. § 1320a-7(c)(3)(B); August 22 Order at 2. 

In response to a question from Petitioner’s counsel, I also stated at the conference that the regulations require exclusions to take effect 20 days after the date the exclusion notice was issued and that there is no exception to this rule.  42 C.F.R. § 1001.2002(b); see also 42 U.S.C. § 1320a-7(c)(1) (effective date of exclusion will be specified in the regulations); Seide v. Shalala, 31 F. Supp. 2d 466, 469 (E.D. Pa. 1998); August 22 Order at 2. 

Finally, at the conference, the parties agreed to a prehearing submission schedule.  August 22 Order at 3. 

On September 25, 2024, the IG filed a brief (IG Br.) and five proposed exhibits.  On October 28, 2024, Petitioner filed a brief (P. Br.).  The IG then filed notice that the IG would not file a reply brief. 

II.    Issue

Whether the IG had a basis for excluding Petitioner from participating in all federal health care programs for five years under 42 U.S.C. § 1320a-7(a)(1). 

III.   Admission of Evidence and Decision on the Written Record

I admit all of the IG’s proposed exhibits into the record, without objection.  See Standing Order ¶ 13; 42 C.F.R. § 1005.8(c). 

Both the IG and Petitioner indicated that an in-person hearing was unnecessary and that neither had any witness testimony to offer.  IG Br. at 7-8; P. Br. at 2.  Therefore, I issue this decision based on the written record.  Civil Remedies Division Procedures § 19(d);  see also 42 C.F.R. § 1005.6(b)(5) (the parties may waive appearances at a hearing). 

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IV.  Jurisdiction

I have jurisdiction to adjudicate this case.  42 U.S.C. § 1320a-7(f)(1); 42 C.F.R. §§ 1001.2007, 1005.2. 

V.   Findings of Fact

1. On September 30, 2020, a Grand Jury empaneled by the United States District Court for the Eastern District of Michigan (District Court) returned a Third Superseding Indictment (Indictment) charging Petitioner and two other individuals with multiple crimes.  IG Ex. 2.
2. Petitioner’s co-defendants were her husband, H.T., and her brother, M.M.  IG Ex. 2 at 6.
3. The Indictment generally alleged the following:
   1. Petitioner owned and managed a pharmacy that did business under the name LifeCare Pharmacy.  IG Ex. 2 at 5.
   2. On August 21, 2014, Petitioner, her husband, and her brother created a pharmacy called LifeCare of Michigan, which they owned and managed.  IG Ex. 2 at 5.
   3. In December 2015, LifeCare Pharmacy closed and transferred its inventory to LifeCare of Michigan.  IG Ex. 2 at 5.
   4. From 2011 through 2015, Petitioner identified herself on her personal federal tax returns as a pharmacist even though she was not a licensed pharmacist in Michigan.  IG Ex. 2 at 5.
   5. Neither LifeCare of Michigan nor LifeCare Pharmacy had storefronts.  They filled prescriptions by delivery to the patients.  IG Ex. 2 at 5-6.
   6. From January 2013 to January 2018, both LifeCare of Michigan and LifeCare Pharmacy paid Petitioner’s family relatives over $4,500,000 for delivery and consultative services.  IG Ex. 2 at 6.
4. Count 11 of the Indictment charged Petitioner, H.T., and M.M. with Money Laundering Conspiracy under 18 U.S.C. §§ 1956(h) and 1957.  IG Ex. 2 at 14‑19.  Count 11 alleged the following: 

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1. From 2010 through 2018, Petitioner, H.T., M.M., and others combined, conspired, and agreed to commit offenses against the United States involving financial transactions of the proceeds from unlawful activity that were designed to disguise the owners and the source of the money.  IG Ex. 2 at 15.
2. Petitioner, H.T., and M.M. incorporated entities in order to transfer proceeds from a Medicare fraud scheme to family members.  IG Ex. 2 at 16.
3. From 2010 to 2016, LifeCare Pharmacy received $35,635,042 in payments from Medicare and $9,743,862 from Medicaid.  IG Ex. 2 at 16.
4. From 2015 to 2018, LifeCare of Michigan received $19,793,518 in payments from Medicare and $4,888,959 from Medicaid.  “[A]t least $9.8 million worth of these funds paid by Medicare, Medicaid, and [another entity] were based upon fraudulent claims.”  IG Ex. 2 at 16-17.
5. From 2010 to 2016, the bank accounts for LifeCare of Michigan and LifeCare Pharmacy received payments of at least $35,635,042 on behalf of Medicare and $9,743,862 on behalf of Medicaid.  “LifeCare received approximately $8,596,291.80 for dispensing medications that it did not have sufficient inventory to dispense.”  IG Ex. 2 at 17.
6. “LifeCare Pharmacy and or LifeCare of Michigan, transferred proceeds from the scheme to defraud Medicare, to entities controlled by [M.M.].”  IG Ex. 2 at 17-18.  Petitioner and her co-conspirators made multiple other money transfers in furtherance of the conspiracy.  IG Ex. 2 at 18‑19.
   5. On July 13, 2023, Petitioner signed a Plea Agreement in which she pleaded guilty to Count 11 of the Indictment.  IG Ex. 3.  The Plea Agreement included the following:
      1. “The parties agree that the following facts are true, accurately describe the [Petitioner’s] role in the offense, and provide a sufficient factual basis for the [Petitioner’s] guilty plea:  Between January 5, 2018, and December 5, 2018, the [Petitioner] agreed with [H.T.] to knowingly engage in monetary transactions in amounts exceeding $10,000 when she deposited checks totaling approximately $1,100,000 into her personal bank accounts at branches located in the Eastern District of Michigan.  These checks were drawn on bank accounts held in the name of LifeCare of Michigan d/b/a Lifecare Pharmacy of Michigan, and represented the proceeds of a specified unlawful activity.”  IG Ex. 3 at 3. 

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2. “The parities stipulate that under United States Sentencing Guidelines . . . the [Petitioner] is not accountable for the underlying offense, namely healthcare fraud.”  IG Ex. 3 at 7.  
   6. On December 19, 2023, the District Court issued a Judgment in a Criminal Case that indicated:  Petitioner pleaded guilty to Count 11 of the Indictment; the District Court adjudicated Petitioner guilty of Money Laundering Conspiracy (18 U.S.C. § 1956(h)); the District Court sentenced Petitioner to one day in prison and two years of supervised release; and the District Court entered a personal forfeiture money judgment in the amount of $1,100,000, which constituted the amount of money derived from Petitioner’s criminal acts.  IG Ex. 5. 

VI.  Conclusions of Law and Analysis

1. Petitioner was convicted of a criminal offense related to the delivery of a health care item or service under the Medicaid program; therefore, exclusion is required under 42 U.S.C. § 1320a‑7(a)(1).

The IG must exclude an individual from participation in any federal health care program if that individual was convicted under federal or state law of a criminal offense related to the delivery of an item or service under title XVIII of the Act (i.e., Medicare) or a state health care program (i.e., Medicaid).1  42 U.S.C. § 1320a‑7(a)(1).  As explained below, the facts in this case show that Petitioner meets this standard for exclusion. 

Petitioner was convicted of a criminal offense.  For purposes of exclusion, individuals are deemed “convicted” of an offense if the following are met: 

(1) when a judgment of conviction has been entered against the individual or entity by a Federal, State, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged; [or]

*     *     *     *

(3) when a plea of guilty or nolo contendere by the individual or entity has been accepted by a Federal, State, or local court.

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42 U.S.C. § 1320a‑7(i)(1), (3). 

Petitioner does not dispute that she was convicted of a criminal offense.  P. Br. at 2.  Further, the record supports this conclusion because:  Petitioner pleaded guilty to Money Laundering Conspiracy (18 U.S.C. § 1956(h)); the District Court accepted the guilty plea; and the District Court entered a judgment of conviction.  IG Ex. 3; IG Ex. 5 at 1.  Therefore, Petitioner was convicted of a criminal offense.  42 U.S.C. § 1320a‑7(i)(1), (3). 

An exclusion under 42 U.S.C. § 1320a-7(a)(1) also requires that the criminal offense be related to the delivery of a health care item or service under the Medicare or Medicaid programs.  For purposes of exclusion, the term “related to” simply means that there must be a nexus or common-sense connection.  See Quayum v. U.S. Dep’t of Health & Human Servs., 34 F. Supp. 2d 141, 143 (E.D.N.Y. 1998); see also Friedman v. Sebelius, 686 F.3d 813, 820 (D.C. Cir. 2012) (describing the phrase “relating to” in another part of section 1320a-7 as “deliberately expansive words,” “the ordinary meaning of [which] is a broad one,” and one that is not subject to “crabbed and formalistic interpretation”) (internal quotation marks omitted). 

Although Petitioner admits to a criminal conviction, Petitioner argues that there is an insufficient evidentiary nexus between her criminal offense and the delivery of items or services under the Medicare and/or Medicaid programs.  P. Br. at 2.  Petitioner argues that the IG relies too heavily on the facts alleged in the Indictment to prove the nexus.  P. Br. at 1.  Petitioner states that the Plea Agreement specifies that she was not responsible for any health care fraud.  Hearing Req. at 1; IG Ex. 3 at 7.  Finally, Petitioner asserts she is in fact innocent of any crime: 

Petitioner stands by her original filing that the only reason she was charged in the criminal case is that she was the legal owner of a pharmacy where fraud was perpetrated by others, and that she received income from her ownership of that pharmacy.  For over four years, Petitioner maintained her innocence in regards to any participation in health care fraud. In 2023, and in order to resolve her pending case and move on with her life, she accepted to plead guilty to money laundering under 18 U.S.C. § 1957 based on the spending of income she received from the pharmacy she owned.

P. Br. at 1. 

As an initial matter, I must reject Petitioner’s claim that she is innocent of the crime that she pleaded guilty to committing.  Petitioner is foreclosed from re-litigating or collaterally attacking the underlying basis of the criminal conviction.  42 C.F.R.

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§ 1001.2007(d); see Travers v. Shalala, 20 F.3d 993, 998 (9th Cir. 1994).  Therefore, I base my analysis below on the criminal offense Petitioner admitted to perpetrating. 

In the Plea Agreement, Petitioner agreed that the elements for the offense she pleaded guilty to committing under Count 11 of the Indictment were as follows: 

(1) [Petitioner] entered into an agreement with another to knowingly engage in monetary transactions;

(2) The transaction involved property derived from specified unlawful activity;

(3) The [Petitioner] knew that the property had a value greater than $10,000; and

(4) The [Petitioner] knew the transaction involved criminally derived property; and

(5) The monetary transactions took place within the United States.

IG Ex. 3 at 2-3.  Most significantly, Petitioner pleaded guilty to a crime in which elements of the offense require that she engaged in a transaction that “involved property derived from specified unlawful activity,” and that she “knew the transaction involved criminally derived property.”  IG Ex. 3 at 2.  Further, Petitioner agreed in the Plea Agreement that the factual basis for her conviction included financial transactions involving funds that “represented the proceeds of a specified unlawful activity.”  IG Ex. 3 at 3. 

The Plea Agreement does not state what the “specified unlawful activity” was.  However, the Plea Agreement is clear that Petitioner pleaded guilty to Count 11 of the Indictment.  IG Ex. 3 at 1.  While I agree with Petitioner, to a limited extent, that the Plea Agreement does not appear to include an admission of all the alleged facts in Count 11 (i.e., the admitted facts in the Plea Agreement are much more limited than those alleged in the Indictment), it would not be rational for me to discount all of the alleged facts in Count 11. 

As summarized and quoted in Finding of Fact 4 above, it is clear that much of Count 11 of the Indictment involves financial transactions of funds derived from a Medicare and Medicaid fraud scheme.  I conclude that it is the Medicare and Medicaid fraud scheme that is being referenced in the Plea Agreement as the “specified unlawful activity.”

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The fact that Petitioner’s criminal conspiracy involved funds illegally obtained from fraudulent Medicare and Medicaid claims means that Petitioner’s criminal offense is related to the delivery of healthcare items or services under the Medicare and Medicaid programs.  This is because there is no doubt that a conviction for a crime involving the filing of false claims with the Medicaid programs is “related” to the delivery of an item or service under Medicare or a state health care program.  See Travers, 20 F.3d at 998 (conviction for filing false claims with the Medicaid program is “a program‑related offense” and “such financial misconduct is exactly what Congress sought to discourage” through imposing exclusions); Kahn v. Inspector Gen. of the U.S. Dep’t of Health & Human Servs., 848 F. Supp. 432, 434, 436 (S.D.N.Y. 1994) (concluding that a podiatrist’s conviction for attempted grand larceny was program‑related for purposes of an exclusion because it was related to the filing of false Medicaid claims); Greene v. Sullivan, 731 F. Supp. 835, 838 (E.D. Tenn. 1990) (“There is no question that Mr. Greene’s crime [of filing false claims] resulted in a Medicaid overpayment and was a program-related crime triggering the mandatory exclusion under Section 1320a‑7(a).”). 

Even though Petitioner did not directly engage in health care fraud, Petitioner was convicted of conspiring to launder the proceeds of that health care fraud, which is a sufficient nexus or common-sense connection to the delivery of health care items or services.  Benny R. Bailey, DAB No. 2935 at 8-9 (2019) (holding that there was a nexus and common-sense connection between a conviction for the money laundering offense (18 U.S.C. § 1956(h)), noting that the exclusion statute does not “require that an individual actually deliver a health care item or service” but simply that it be in connection with the delivery of a health care items or service.).  Petitioner’s admission of making financial transfers of funds that she knew to be derived from the unlawful activity of Medicare and Medicaid fraud is sufficient to satisfy the requirements of the statute. 

Therefore, I conclude that the IG had a legitimate basis to exclude Petitioner from all federal health care programs under 42 U.S.C. § 1320a-7(a)(1). 

2. Petitioner must be excluded for a minimum of five years.

Because I have concluded that a basis exists to exclude Petitioner under 42 U.S.C. § 1320a‑7(a)(1), Petitioner must be excluded for a minimum of five years.  42 U.S.C. § 1320a‑7(c)(3)(B).
 

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VII.   Conclusion

I affirm the IG’s determination to exclude Petitioner for five years from participating in all federal health care programs under 42 U.S.C. § 1320a‑7(a)(1).