Braxton Alan Norwood, DAB CR6740 (2025)

DECISION

Petitioner, Braxton Alan Norwood, was the owner and Chief Executive Officer of Expesicor, LLC, a company that received grants from the National Institutes of Health (NIH) to research neurological disorders.  He became embroiled in a scheme involving his receiving NIH funds to which he was not entitled.  In a 38-count indictment, he was charged with:  Theft from a Program Receiving Federal Funding; Wire Fraud; Money Laundering; and Submitting False, Fictitious, and Fraudulent Claims, all felonies.  He pleaded guilty in U.S. District Court to one count of Falsifying Records in a Federal Investigation, also a felony.

Based on his conviction, the Inspector General (IG) has excluded him for four years from participating in Medicare, Medicaid, and all federal health care programs, as authorized by section 1128(b)(2) of the Social Security Act (Act).  Petitioner appeals.

For the reasons discussed below, I find that the IG is authorized to exclude Petitioner under section 1128(b)(2) and that length of the exclusion is reasonable.

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Background

The conviction.  Petitioner Norwood was the owner and CEO of Expesicor, a company affiliated with the University of Montana, Missoula, that researched neurological disorders.  An indictment, filed July 26, 2023, charged him with:  

• One count of Theft from a Program Receiving Federal Funding, in violation of 18 U.S.C. § 666(a)(1)(A); the indictment alleged that, as CEO of Expesicor, Petitioner “intentionally misapplied, embezzled, stole, obtained by fraud and otherwise without authority knowingly converted . . . property valued at more than $5,000 . . . .”  IG Ex. 4 at 4.
• Twenty-four counts of Wire Fraud, in violation of 18 U.S.C. § 1343; the indictment alleged that, having devised a scheme to defraud, Petitioner knowingly transmitted “by means of wire communication[,] in interstate and foreign commerce, . . . writings, signs, signals, pictures, and sounds for the purpose of executing such scheme and artifice . . . .”  IG Ex. 4 at 4-7.
• Three counts of Money Laundering, in violation of 18 U.S.C. § 1957; the indictment alleged that Petitioner knowingly engaged in a monetary transaction derived from unlawful activity.  IG Ex. 4 at 7.
• Ten counts of Making False Claims, in violation of 18 U.S.C. § 287; the indictment alleged that Petitioner submitted false and fraudulent claims to NIH.  IG Ex. 4 at 7-8.

On May 28, 2024, Petitioner agreed to plead guilty to “Falsification of Records in a Federal Investigation,” a violation of 18 U.S.C. § 1519.  He also agreed to be responsible for “complete restitution,” which, as alleged in the indictment, totaled $165,446.71.  IG Ex. 5.  In admitting guilt, he acknowledged that he: 

• Knowingly altered, destroyed, concealed, or falsified a record, document, or tangible object; and
• Acted with the intent to impede, obstruct, or influence the actual or contemplated investigation of a matter within the jurisdiction of any department or agency of the United States.

IG Ex. 5 at 3.  He acknowledged that he “freely and voluntarily” endorsed the plea agreement.  IG Ex. 5 at 8.

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On October 30, 2024, Petitioner pleaded guilty, in Federal District Court for the District of Montana, to one felony count of Falsification of Records in a Federal Investigation, in violation of 18 U.S.C. § 1519.  IG Ex. 8.  He was sentenced to four years probation and ordered to pay a $100 assessment, a $2,500 fine, and $165,446.71 in restitution.  IG Ex. 8 at 2, 5.  In his sentencing memorandum, Petitioner told the court that he did not minimize the seriousness of his offense and understood the harm his behavior had on society.  IG Ex. 9 at 3-4.

The IG notice and Petitioner’s appeal.  In a letter dated March 31, 2025, the IG notified Petitioner that he was excluded from participation in Medicare, Medicaid, and all federal health care programs for a minimum period of four years, because he had been convicted of a “criminal offense in connection with the interference with or obstruction of any investigation or audit related to a criminal offense as described in section 1128(a) or 1128(b) of the [Social Security] Act or the use of funds received, directly or indirectly, from any Federal health care program.”  IG Ex. 1.  Petitioner requested review.

The parties agree that an in-person hearing is not necessary.  IG Br. at 9; P. Br. at 3.  I therefore close the record and issue this decision based on the parties’ written submissions.

The IG submitted a brief (IG Br.) and nine exhibits (IG Exs. 1-9).  Petitioner submitted a brief (P. Br.).  The IG submitted a reply brief (IG Reply).  In the absence of any objections, I admit into evidence IG Exs. 1-9.

Issue

The issues before me are:  whether the IG has a basis for excluding Petitioner from program participation; and, if so, whether the length of the exclusion is reasonable.

Discussion

1. Because Petitioner was convicted of a criminal offense relating to the obstruction of an HHS-IG investigation of financial misconduct involving federal program funds, the IG may exclude him from participating in all federal health care programs.1

Section 1128(b)(2) of the Act allows the Secretary of Health and Human Services to exclude from participation in all federal health care programs an individual who has been convicted, under federal or state law, “in connection with the interference with or

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obstruction of any investigation or audit related to” – i) any offense described in section 1128(a) or 1128(b)(1); or ii) the use of funds received, directly or indirectly, from any Federal health care program (as defined in section 1128B(f)).  See 42 C.F.R. § 1001.301(a).

Relevant here are the offenses described in section 1128(b)(1)(B), including a criminal offense relating to fraud, theft, embezzlement, breach of fiduciary responsibility or other financial misconduct with respect to any act or omission in a program (other than a health care program) operated by or financed in whole or in part by any Federal, State or local government agency.2  See 42 C.F.R. § 1001.101(c)(2) (describing financial crimes other than those involving Medicare and state health care programs).

Although, Petitioner admits that he was convicted of a criminal offense (P. Br. at 1), he argues that he is not subject to exclusion because he interfered with an investigation involving NIH research grant funds, not a “health care program” like Medicare, Medicaid, or Tricare.  P. Br. at 2.  In his view, if “individuals involved in non-healthcare federal research programs” were subject to exclusion, “individuals involved in non-healthcare research programs . . . could face identical sanctions, even in the absence of any impact on a federal healthcare program.”  In Petitioner’s view, this is “inconsistent with the statute’s intent.”  P. Br. at 2.

In fact, the plain language of the statute establishes that, for purposes of section 1128 exclusions, “programs” include “plans” and “grants.”  Section 1128(b)(1)(B) explicitly applies to programs that are not “health care programs.”  And section 1128B(f) defines “Federal health care program” broadly, to include 1) any plan or program that provides health benefits, whether directly, through insurance or otherwise, which is funded directly, in whole or in part, by the United States Government, or any state healthcare program, as defined in section 1128(h).  Section 1128(h) defines “state health care program” as:  1) a state plan approved under title XIX (Medicaid); 2) any program receiving funds under title V (maternal and child health services block grants); 3) any program receiving funds under subtitle I of title XX (social services and elder justice block grants); or 4) a child state health plan approved under title XXI (children’s health insurance program).

Thus, section 1128(b)(1) is explicitly not limited to Medicare, Medicaid, Tricare, or any similar health care program.  And its language reflects Congressional recognition that threats to program integrity are not limited to those who steal from those programs.  Individuals convicted of financial crimes against other institutions or individuals can also pose a threat.

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Petitioner also claims (somewhat disingenuously) that “the conduct underlying the plea involved no proven use of federal health care program funds and no demonstrated misuse of NIH grant money.”  P. Br. at 3.  He claims that he was convicted for “submitting a spreadsheet with an unsubstantiated link to federal grant funding” and that he is “unaware” of which, if any of the purchases listed were charged to a federal grant program.  P. Br. at 2.  He submits no evidence in support of this claim, not even his own written declaration.  That he was not aware of the details of his crime is simply not credible.

In any event, the court’s sentencing order lists the “National Institutional [sic] of Health” as payee of the ordered restitution and directs that the funds be sent to the attention of Deborah Kearse at an address in Bethesda, Maryland.3  IG Ex. 8 at 4.  This should resolve the question of whether his crimes were related to NIH money.

Petitioner nevertheless complains that the IG has pointed to his indictment as evidence that his crime was related to a program financed by the federal government.4  Whether the allegations contained in the indictment were proven is not the issue.  The indictment is important because it shows that the HHS-IG special agent was investigating alleged crimes relating to NIH grants.  IG Ex. 4.  It does not matter whether the information Petitioner submitted to the special agent was related to NIH grants (or any other federal program).  What matters is that Petitioner submitted the document in order to obstruct the investigation, and the investigation was related to financial misconduct involving federal grants.  Petitioner could have submitted total gobbledygook, simply to distract the special agent and impede the investigation.  He is subject to exclusion because, as he admitted in

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his plea agreement and guilty plea, he submitted material to an HHS-OIG special agent, in order to mislead him in his investigation of alleged crimes related to NIH grants, which meant that he obstructed an investigation.  IG Ex. 7 at 2.

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

Having found a basis for the exclusion, I now consider whether a four-year exclusion falls within a reasonable range.  A permissive exclusion based on section 1128(b)(2) is for three years unless the Secretary determines, in accordance with published regulations, that a shorter period is appropriate because of mitigating circumstances or that a longer period is appropriate because of aggravating circumstances.  Act § 1128(c)(3)(D); 42 C.F.R. § 1001.301(b)(1).  So long as the period of exclusion is within a reasonable range, based on demonstrated criteria, I have no authority to change it.  Bryant Pryor, DAB No. 3165 (2024); Joann Fletcher Cash, DAB No. 1725 at 16-17 (2000) (citing 57 Fed. Reg. 3298, 3321 (1992)).

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:  “[t]he acts resulting in the conviction, or similar acts, caused or reasonably could have been expected to cause, a financial loss of $50,000 or more to a government agency or program or to one or more entities[,] or had a significant financial impact on program beneficiaries or other individuals.”  42 C.F.R. § 1001.301(b)(2)(viii).  The presence of an aggravating factor, not offset by any mitigating factor, justifies lengthening the period of exclusion.  “Simply meeting the threshold for an aggravating factor is a clear indication of untrustworthiness.”  Mrugeshkumar Shah, M.D., DAB No. 3079 at 10 (2022); Hussein Awada, M.D., DAB No. 2788 at 10 (2017).  Financial losses of even one dollar over the $50,000 threshold justify extending the length of the period of exclusion.  Edwin L. Fuentes, DAB No. 2988 at 13 (2020).

The sentencing court ordered Petitioner to pay $165,446.71 in restitution.  IG Ex. 8 at 5.  Restitution has long been considered a reasonable measure of losses.  Awada, DAB No 2788 at 7; Farzana Begum, M.D., DAB No. 2726 at 16 n.8 (2016), aff’d, Begum v. Hargan, No. 16 CV 9624, 2017 WL 5624388 (N.D. Ill. Nov. 21, 2017); Juan de Leon, Jr., DAB No. 2533 at 5 (2013); Craig Richard Wilder, DAB No. 2416 at 9 (2011).  Thus, the financial loss was more than three times the threshold amount for aggravation.  Such significant financial losses here more than justify the relatively minor increase (one year) in the length of the exclusion.

Petitioner argues, again, that the “conduct underlying his plea involved no proven use of federal healthcare program funds, and no demonstrated misuse of NIH grant money.”  P. Br. at 2-3.  As noted above, the sentencing order lists NIH as payee, and NIH is the only

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payee listed.  Further, the amount Petitioner was ordered to pay in restitution is exactly – to the penny – the amount listed as losses traceable to the offenses alleged in the indictment:  $165,446.71 (theft from a program receiving federal funding, wire fraud, money laundering, and false claims).  Although not necessary to support the exclusion, this fact further supports the existence of a link between his criminal conduct and the obstruction of an investigation related to a section 1128(b)(1)(B) offense.

Finally, even if NIH were not so plainly the injured party, the aggravating factor would apply because this factor is triggered by the financial loss, not by the identity of the victim.  The regulation explicitly includes a financial loss to one or more entities, or significant financial impact on individuals who are not program beneficiaries.  42 C.F.R. § 1001.301(b)(2)(viii).

Petitioner concedes that no mitigating factors justify shortening the length of the exclusion.  P. Br. at 3.

Conclusion

The IG was authorized to exclude Petitioner from participating in Medicare, Medicaid, and other federal health care programs.  Based on one aggravating factor and no mitigating factors, the length of the four-year exclusion is reasonable.