Amgad Mikhail, DAB CR6627 (2025)

DECISION

The Inspector General (IG) of the United States Department of Health and Human Services excluded Amgad Mikhail (Petitioner) from participation in Medicare, Medicaid, and all other federal health care programs for a minimum period of 15 years pursuant to section 1128(a)(1) of the Social Security Act (Act) (42 U.S.C. § 1320a-7(a)(1)).  For the reasons discussed below, it is determined that the IG had a basis to exclude Petitioner from program participation, and a mandatory exclusion must be imposed.  Based on the facts and evidence presented in this case, I find that a 15-year exclusion is not unreasonable based on the presence of two aggravating factors and one mitigating factor.

I.     Background and Procedural History

By notice letter dated June 28, 2024, the IG informed Petitioner that he was being excluded from participation in Medicare, Medicaid, and all federal health care programs for a minimum period of 15 years pursuant to section 1128(a)(1) of the Act.  The exclusion was imposed due to Petitioner’s conviction, in the United States District Court, Eastern District of New York (District Court), “of a criminal offense related to the delivery of an item or service under the Medicare or a State health care program,

Page 2

including the performance of management or administrative services relating to the delivery of items or services, under such programs.”  IG Exhibit (Ex.) 1.  The IG identified two aggravating factors and one mitigating factor.

The Civil Remedies Division (CRD) received Petitioner’s request for a hearing on August 20, 2024.

On August 26, 2024, the CRD issued my Standing Pre-Hearing Order (Standing Order) and a letter, at my direction, acknowledging receipt of Petitioner’s hearing request.  The letter notified the parties that a telephone prehearing conference was scheduled for September 17, 2024, at 2:00 p.m. EST.  On the date of the prehearing conference, [REDACTED] appeared on behalf of Petitioner and [REDACTED] appeared on behalf of the IG.  The parties agreed to a briefing schedule.  An Order Following Prehearing Conference and Setting Briefing Schedule (September 17, 2024 Order) was issued on September 17, 2024.

On November 1, 2024, the IG filed a brief (IG Br.) along with seven exhibits (IG Exs. 1-7).  On January 6, 2025, Petitioner filed a brief (P. Br.), along with five exhibits (P. Exs. 1-5).  The IG filed a reply brief (IG Reply Br.) on January 21, 2025.

II.     Admission of Exhibits and Decision on the Written Record

The IG indicated that an in-person hearing is not necessary to resolve this matter.  IG Br. at 9, 10.  Petitioner indicated that an in-person hearing is necessary and submitted written direct testimony.  P. Br at 6.  As stated in the September 17, 2024 Order, a hearing will be held only if a party asks to cross-examine a witness for whom the opposing party has provided written direct testimony and the witness’ proposed testimony is found to be relevant and non-cumulative.  September 17, 2024 Order at 5; Civil Remedies Division Procedures § 19(d).  The IG did not request to cross-examine Petitioner.  Therefore, a hearing is not necessary, and this matter will be decided on the written record.

Absent objections, IG Exhibits 1-7 and P. Exhibits 1-5 are admitted into evidence.  All evidence will be given the proper weight and consideration.

III.    Issues

The issues to be decided are:  

Whether the IG had a basis to exclude Petitioner from participation in Medicare, Medicaid, and all other federal health care programs under section 1128(a)(1) of the Act.  42 C.F.R. § 1001.2007(a)(1)(i).

Page 3

Whether the 15-year exclusion imposed by the IG is unreasonable.  42 C.F.R. § 1001.2007(a)(1)(ii).

IV.   Jurisdiction

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

V.     Findings of Fact

1. Petitioner was a licensed physical therapist in the State of New York.  IG Ex. 2.  Bensonhurst Mega Medical Care P.C. (Bensonhurst) was a New York State corporation that purported to provide physical and occupational therapy and diagnostic tests to Medicare and Medicaid beneficiaries.  IG Ex. 2 at 4.  Petitioner worked at Bensonhurst and other medical clinics in New York between 2009 and 2016 and submitted claims to Medicare and Medicaid through Bensonhurst.  IG Ex. 2 at 5.  Petitioner owned a company named St. Pavly.  After leaving Bensonhurst, Petitioner submitted Medicare and Medicaid claims through St. Pavly.
2. On January 6, 2017, Petitioner was charged, by Superseding Information, with one count of Conspiracy to Commit Health Care Fraud and Wire Fraud (Count One) in violation of 18 U.S.C. § 13491 and one count of Conspiracy to Defraud the United States and Pay Health Care Kickbacks in violation of 18 U.S.C. § 371 (Count 2).2  IG Ex. 2 at 7, 8.
3. It was alleged that Petitioner, along with others, participated in a health care fraud scheme from approximately February 2009 to March 2016.  IG Ex. 2 at 5.  Petitioner allegedly increased demand for medical services by providing Medicare and Medicaid beneficiaries with cash payments to be subjected to unnecessary procedures, services, and tests; submitted and caused to be submitted claims to Medicare and Medicaid for medically unnecessary services; submitted and caused to be submitted Medicare and Medicaid claims that were fraudulently induced by

Page 4

kickbacks; and engaged in deceptive acts intended to hide information, mislead, avoid suspicion and avert further inquiry into the fraud scheme.  IG Ex. 2 at 5, 6.

4. As a result of the fraudulent scheme,  Petitioner, along with his co-conspirators, submitted more than $11 million in claims to Medicaid and Medicare from February 2009 through March 2016.  Petitioner was paid more than $3.9 million for those claims.  IG Ex. 2 at 7.
5. On January 6, 2017, Petitioner entered into a Cooperation Agreement and admitted guilt to Counts One and Two of the superseding information.  IG Exs. 4, 5.
6. On April 26, 2023, the United States Attorney for the Eastern District of New York issued a 5K1.1 motion3 on behalf of Petitioner, moving to allow the court to depart downwardly from the applicable sentencing guidelines due to Petitioner’s substantial assistance in the investigation.  IG Ex. 6.
7. The District Court accepted Petitioner’s guilty plea and adjudicated him guilty on May 24, 2023.  IG Ex. 3.  Petitioner was sentenced to two years of probation for each count, to run concurrently.  The District Court ordered Petitioner to pay $4,226,316.28 in restitution, with $3,120,734.32 payable to the Centers for Medicare and Medicaid Services.  IG Ex. 3 at 7.

VI.   Legal Authorities

The Secretary of the United States Department of Health and Human Services (Secretary) shall exclude an individual from participation in Medicare, Medicaid, and all other federal health care programs if that individual has been convicted of a criminal offense related to the delivery of an item or service under Medicare or any state health care program.  42 U.S.C. § 1320a-7(a)(1).  The Act requires a minimum exclusion period of five years when the exclusion is mandated under section 1320a-7(a).  42 U.S.C. § 1320a-7(c)(3)(B).

In exclusion cases, the IG has the burden of proving the basis for the exclusion and the existence of any aggravating factors.  42 C.F.R. § 1005.15(c); Standing Order ¶ 6.  Petitioner has the burden of proving any affirmative defenses or factors to mitigate the length of the exclusion if aggravating factors have been established.  42 C.F.R. § 1001.102(c); Standing Order ¶ 6.  The standard of proof is a preponderance of the

Page 5

evidence, which means a fact is proven if the evidence shows that it is more likely true than not true.  42 C.F.R. §§ 1001.2007(c), 1005.15(d).  In this case, the IG must prove that Petitioner was convicted of an offense related to the delivery of an item or service under Medicare or a state health care program.

An excluded individual may request a hearing before an administrative law judge (ALJ), but only on the issues of whether the IG had a basis for the exclusion and whether an exclusion longer than the required minimum period is unreasonable in light of any applicable aggravating and mitigating factors.  42 C.F.R. §§ 1001.2007(a), 1005.2(a).

VII.    Analysis and Conclusions of Law

1. Petitioner was convicted of a criminal offense related to the delivery of an item or service under the Medicare program, which subjects him to a mandatory exclusion from all federal health care programs for a minimum of five years.

In order to prevail, the IG must prove that Petitioner was convicted of a criminal offense related to the delivery of an item or service under Medicare or a state health care program.  Under the Act, an individual is considered to have been convicted of a criminal offense when “a plea of guilty or nolo contendere by the individual or entity has been accepted by a Federal, State, or local court.”  Act § 1128(i)(1), (3) (42 U.S.C. § 1320a-7(i)(1), (3)); see also 42 C.F.R. § 1001.2 (paragraphs (a) and (c) under the definition of “Convicted”).  It is undisputed that the District Court accepted Petitioner’s guilty plea and adjudicated him guilty on May 24, 2023.

Next, to prove that Petitioner’s conviction was related to the delivery of an item or service under Medicare, the IG must show a nexus between the offense and the delivery of an item or service under Medicare.  The Departmental Appeals Board (Board) has repeatedly held that the phrase “related to” within the context of section 1128(a)(1) requires only that a common‑sense nexus exist between the offense and the delivery of an item or service under Medicare.  Summit S. Shah, M.D., DAB No. 2836 at 6 (2017) (citing cases).  The evidence shows that Petitioner and his co-conspirators unlawfully paid kickbacks for referrals and filed fraudulent claims with Medicare and Medicaid.  IG Exs. 2, 6.  “The filing of a false claim or facilitating the filing of a false claim is considered related to the delivery of an item or service under [Medicare and Medicaid].”  Yolanda Hamilton, M.D., DAB No. 3061 at 11 (2022) (citing cases therein).  The IG has proven that Petitioner’s conviction is related to the delivery of an item or service under Medicare and Medicaid, which Petitioner does not dispute.  See P. Br.  Therefore, the IG had a legal basis to impose an exclusion against Petitioner.

Page 6

2. The IG identified two aggravating factors that support an exclusion beyond the five-year minimum.

Exclusions imposed under section 1128(a)(1) carry a five-year mandatory minimum exclusion period.  Act § 1128(c)(3)(B) (42 U.S.C. § 1320a-7(c)(3)(B)); 42 C.F.R. § 1001.102(a).  The IG may extend the five-year exclusion period based on the application of the aggravating factors listed in 42 C.F.R. § 1001.102(b).  If any of the aggravating factors set forth in 42 C.F.R. § 1001.102(b) justifies an exclusion longer than five years, mitigating factors listed at 42 C.F.R. § 1001.102(c) may be considered as a basis for reducing the period of exclusion to no less than five years.  In this case, the IG has proposed a 15-year exclusion based on two aggravating factors and one mitigating factor.  Petitioner argues that there are additional mitigating factors that should be considered when determining the length of his exclusion.

The IG identified the following aggravating factors as a basis for imposing a 15-year exclusion against Petitioner:  loss to a government program or other entities as a result of Petitioner’s criminal conduct was greater than $50,000; and the acts that resulted in the conviction, or similar acts, were committed over a period of one year or more.  IG Ex. 1; 42 C.F.R. § 1001.102(b)(1)-(2).  Each factor is discussed below.

1. The acts resulting in the conviction, or similar acts, caused, or were intended to cause, a financial loss to a government program of $50,000 or more.

The record shows that as a result of the fraudulent scheme, Petitioner and his co-conspirators submitted $11,968,509.30 in claims to Medicare and Medicaid.  IG Ex. 6.  Petitioner and his company were paid over $3.9 million for those claims.  IG Ex. 6 at 3.  The District Court ordered Petitioner to pay $3,949,775.28 in restitution to Medicare and Medicaid, in addition to $276,541 owed to the IRS.  IG Ex. 3 at 7.  It is well-established that an amount ordered as restitution constitutes proof of the amount of financial loss to a government program.  Yolanda Hamilton, DAB No. 3061 at 12-14.  The total loss incurred is 239 times the $50,000 threshold.  Petitioner’s portion alone is over 78 times the threshold.  Therefore, the IG has established that the restitution amount may be used as an aggravating factor.

2. The acts that resulted in Petitioner’s conviction, or similar acts, were committed over a period of one year or more.

The second aggravating factor identified by the IG is the acts that resulted in the conviction, or similar acts, were committed over a period of one-year or more.  “[T]he purpose of this aggravating factor ‘is to distinguish between petitioners whose lapse in integrity is short-lived from those who evidence a lack of such integrity over a longer

Page 7

period . . . .’”  Vinod Chandrashekhar Patwardhan, M.D., DAB No. 2454 at 7 (2012) (quoting Donald A. Burstein, Ph.D., DAB No. 1865 at 8 (2003)).  It is undisputed that the acts that resulted in Petitioner’s conviction occurred from approximately February 2009 to March 2016.  IG Ex. 6.  Participating in criminal activity for approximately seven years is indicative of deliberate participation and not merely a temporary lapse in judgment.  IG Ex. 2.  The IG has proven the existence of a second aggravating factor which is significant and supports an enhancement to the mandatory minimum five-year exclusion.

3. The IG identified one mitigating factor in determining the length of Petitioner’s exclusion.

The regulations provide three mitigating factors that may be considered to reduce an exclusion to no less than five years if aggravating factors are present:  (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 the court determined that a petitioner had a mental, physical, or emotional condition before or after the commission of the offense that reduced their culpability; and (3) a petitioner’s cooperation with federal or state officials resulted in others being convicted or excluded, additional cases being investigated, or a civil money penalty being imposed.  42 C.F.R. § 1001.102(c).

Here, the IG identified Petitioner’s cooperation with officials that led to the conviction of a co-conspirator as a mitigating factor.  The record shows that Petitioner’s cooperation was substantial and warranted the government to file a motion with the District Court requesting a downward departure in sentencing guidelines.  IG Ex. 6.  It is undisputed that the information and testimony provided by Petitioner was instrumental in the successful prosecution of others also involved in the fraudulent scheme, and Petitioner began cooperating with authorities even before he obtained legal counsel.  IG Ex. 6 at 5‑7, 17; P. Br. at 2.  Petitioner argues that the IG “grossly undervalues” the extent of Petitioner’s cooperation with authorities and that Petitioner cooperated with the officials for over six years.  However, the IG notes that Petitioner’s cooperation with federal and state officials was considered in determining the length of the extension, but it does not negate the seriousness of Petitioner’s crime.  IG Br. at 7.  Additionally, the IG noted that Petitioner’s exclusion would have been substantially longer if not for this mitigating factor.  IG Reply Br. at 2.

Petitioner argues that the IG failed to consider his physical conditions as a mitigating factor.  P. Br. at 3.  Petitioner suffers from very serious health conditions including hypertrophic cardiomyopathy and cutaneous T-cell lymphoma.  P. Exs. 3-4.  However, to apply this mitigating factor it is not enough for a physical, mental, or emotional health condition to merely exist, but there must be evidence that the condition somehow reduced Petitioner’s culpability before or after the commission of the crime.  In the sentencing

Page 8

transcript, Petitioner’s attorney mentions the health conditions to dissuade the District Court judge from imposing incarceration as part of the sentence.  IG Ex. 7 at 13, 14.  Similarly, the U.S. Probation Department Sentence Recommendation makes mention of Petitioner’s heart condition, while noting that Petitioner is “mentally healthy.”  P. Ex. 1 at 2.  There is no evidence in the record showing that Petitioner’s health conditions affected his culpability.  Therefore, the Petitioner has not proven that his physical condition qualifies as a mitigating factor.

Based on the evidence provided, the only mitigating factor that may be considered in this case is Petitioner’s cooperation with authorities.

3. Based on the two aggravating factors and one mitigating factor, I find that the 15-year exclusion imposed by the IG is not unreasonable.

In determining whether the length of exclusion is unreasonable, I must determine whether the length of the exclusion falls into a “reasonable range” based on the evidence submitted.  The regulations provide that the IG’s proposed exclusion must be upheld as long as the length of exclusion is not unreasonable.  42 C.F.R. § 1001.2007(a)(1)(ii).  It is important to note that it is the quality of the aggravating (or mitigating) factors that is most important when considering the length of exclusion and not the sheer number of aggravating factors that are present in a given case.  The Secretary stated in the preamble to the final rule establishing the exclusion regulations that:

We do not intend for the aggravating and mitigating factors to have specific values; rather, these factors must be evaluated based on the circumstances of a particular case.  For example, in one case many aggravating factors may exist, but the subject’s cooperation with the OIG may be so significant that it is appropriate to give that one mitigating factor more weight than all of the aggravating.  Similarly, many mitigating factors may exist in a case, but the acts could have had such a significant physical impact on program beneficiaries that the existence of that one aggravating factor must be given more weight than all of the mitigating.  The weight accorded to each mitigating and aggravating factor cannot be established according to a rigid formula, but must be determined in the context of the particular case at issue.

57 Fed. Reg. 3298, 3314-15 (Jan. 29, 1992).

Here, Petitioner engaged in a fraudulent billing scheme, along with his co-conspirators, that resulted in the submission of over $11 million in false and fraudulent claims to Medicare and Medicaid.  IG Ex. 2 at 7.  Petitioner alone was paid over $3,900,000 for

Page 9

those claims.  Id.  This is a significant amount of fraud, particularly for programs designed to provide healthcare to some of this country’s most vulnerable populations.  Additionally, the Board has held that “it is entirely reasonable to consider a program loss amount substantially larger than” the threshold program loss amount to be “an ‘exceptional aggravating factor’ to be accorded significant weight.”  Laura Leyva, DAB No. 2704 at 9-10 (2016).

Even more concerning is that Petitioner willingly participated in the fraudulent scheme for approximately seven years.  This calls into question Petitioner’s integrity and trustworthiness.  The amount of fraud and the length of the fraudulent scheme are significant aggravating factors which justify an exclusion substantially longer than the mandatory minimum.  Petitioner argues that the IG grossly undervalued the extent of Petitioner’s cooperation in the criminal case.  However, based on the evidence, I am convinced that the IG considered the mitigating factor in determining the length of Petitioner’s exclusion and would have imposed a considerably longer exclusion, but for Petitioner’s cooperation with authorities.

Petitioner argues that the District Court and the U.S. Probation Department considered Petitioner’s cooperation, health, and lack of criminal history in determining that a non-custodial sentence was appropriate, intimating that the exclusion determination should mirror the factors considered by the District Court.  P. Br. at 3-4.  Petitioner adds that failure to take into further consider Petitioner’s cooperation may result in discouraging others from cooperating in the future.  P. Br. at 5.  However, it is important to note that criminal sentencing and administrative exclusions have very different objectives.  “The goals of criminal law generally involve punishment and rehabilitation of the offender, possibly deterrence of future misconduct by the same or other persons, and various public policy goals,” whereas “[e]xclusions imposed by the I.G. . . . are civil sanctions, designed to protect the beneficiaries of health care programs and the federal fisc, and are thus remedial in nature rather than primarily punitive or deterrent.”  Andrew Louis Barrett, DAB No. 2887 at 6 (2018) (citing Henry L. Gupton, DAB No. 2058 at 7 (2007), aff’d, Henry L. Gupton v. Leavitt, 575 F. Supp. 2d 874 (E.D. Ill. 2008)); see also Gracia L. Mayard, DAB No. 2767 at 9 (2017) (noting that “criminal justice policy is irrelevant” in the exclusion context).

Petitioner argues that the length of the exclusion will impair his ability to work as a physical therapist effectively for the remainder of his working life.  P. Br. at 3; P. Ex. 5.  Petitioner also provides a letter from his clergy stressing Petitioner’s acceptance of responsibility and remorse for his actions.  P. Ex. 2.  Although I understand Petitioner’s concerns, they do not serve as a basis to lessen the length of his exclusion.  To the extent that Petitioner’s arguments may be construed as a request for equitable relief, an ALJ is not empowered to grant such relief.  Matthew J. Girardy, DMD, DAB No. 2987 at 7 (2020).

Page 10

Based on the facts and evidence presented in this case, I find that a 15-year exclusion is not unreasonable based on the presence of one mitigating factor and two aggravating factors which include a significant amount of restitution and the lengthy duration of the fraudulent activity.

VIII.    Conclusion

For the foregoing reasons, I find that the IG has proven, by a preponderance of the evidence, that Petitioner was convicted of an offense that requires exclusion under section 1128(a)(1) of the Act.  I also find that a 15-year exclusion from participation in Medicare, Medicaid, and all other federal health care programs, effective twenty days from June 28, 2024, is not unreasonable based on the circumstances of this case.