Brian Edward Sokalsky, DAB CR6806 (2025)

DECISION

Respondent, the Acting Inspector General of the U.S. Department of Health and Human Services (IG), excluded Petitioner, Brian Edward Sokalsky, for 21 years from participation in Medicare, Medicaid, and all federal health care programs pursuant to section 1128(a)(3) of the Social Security Act (Act). 

Petitioner timely challenged the IG’s exclusion action before me.  As explained below, I affirm the basis for the IG’s exclusion action and find the 21-year exclusion period selected by the IG reasonable. 

I. Case Background and Procedural History

On May 30, 2025, the IG notified Petitioner of his exclusion from participation in Medicare, Medicaid, and all federal health care programs for 21 years under 42 U.S.C. § 1320a-7(a)(3).  IG Ex. 1 at 1.  The IG based the exclusion on Petitioner’s felony conviction in the U.S. District Court for the District of New Jersey (District Court) of a criminal offense related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct in connection with the delivery of a health care item or service, or with respect to any act or omission in a health care program (other than 

Page 2

Medicare and a state health care program) operated by, or financed in whole or in part, by any federal, state or local government agency.  Id. 

The IG identified two aggravating factors as bases to increase Petitioner’s exclusion period from five to 21 years:  (1) the acts resulting in the conviction, or similar acts, caused more than $50,000 in damages to government agencies, programs or other entities; and (2) Petitioner’s sentence included a term of incarceration.  Id. 

Petitioner timely requested a hearing before an administrative law judge in the Civil Remedies Division, resulting in my designation to hear and decide this case.  On August 27, 2025, I held a pre-hearing conference by telephone with the parties, the substance of which is summarized in my August 28, 2025 Order Summarizing Pre-hearing Conference (Summary Order). 

Consistent with that order, the IG filed a brief (IG Br.) with proposed exhibits marked as IG Exhibits 1 through 6.  Petitioner filed a brief (P. Br.) with proposed exhibits marked as Petitioner Exhibits 1 and 2.  The IG filed a reply brief (IG Reply). 

II. Admission of Exhibits and Decision on the Record

Neither party objected to the opposing party’s proposed exhibits.  I admit IG Exhibits 1 through 6 and Petitioner Exhibits 1 and 2 into the record.  42 C.F.R. § 1005.8(c); Civ. Remedies Div. P. § 14(e). 

Neither party proposed witnesses or requested a hearing.  IG Br. at 9; P. Br. at 5.  Accordingly, I proceed to a decision based on the parties’ briefs and the exhibits of record.  Summary Order ¶ 9; Civ. Remedies. Div. P. § 19(d). 

III. Jurisdiction

I have jurisdiction to hear and decide this case.  42 U.S.C. § 1320a-7(f)(1); 42 C.F.R. §§ 1001.2007(a)(1)-(2), 1005.2(a).  

IV. Issues

Whether the IG had a basis to exclude Petitioner from participating in Medicare, Medicaid, and all other federal health care programs under 42 U.S.C. § 1320a-7(a)(3);

If so, whether the 21-year exclusion period selected by the IG is reasonable.  

Page 3

V. Applicable Law

The Secretary of Health and Human Services1 must exclude from participation in Medicare, Medicaid, and all federal health care programs any individual who has been convicted, under federal or state law, of a felony criminal offense that occurred after August 21, 1996 relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct committed in connection with the delivery of a health care item or service.  42 U.S.C. § 1320a-7(a)(3); 42 C.F.R. § 1001.101(c)(1). 

An individual has been “convicted” of a criminal offense within the meaning of the Act when:  (1) a judgment of conviction has been entered against him or her in a federal, state, or local court whether an appeal is pending or the record of the conviction is expunged; (2) there is a finding of guilt by a court; (3) a plea of guilty or no contest is accepted by a court; or (4) the individual has entered into any arrangement or program where judgment of conviction is withheld.  42 U.S.C. § 1320a-7(i).  The Act does not distinguish between misdemeanor and felony convictions.  There may be no collateral attack of the conviction that provides the basis of the exclusion.  42 C.F.R. § 1001.2007(d). 

The Act requires a minimum exclusion period of five years for exclusions imposed under section 1128(a) of the Act (42 U.S.C. § 1320a-7(a)).  42 U.S.C. § 1320a-7(c)(3)(B); 42 C.F.R. § 1001.102(a).  Exclusion is effective 20 days from the date of the notice of exclusion.  42 C.F.R. § 1001.2002(b).  The IG may extend the period of exclusion based on the presence of specified aggravating factors.  42 C.F.R. § 1001.102(b).  If the IG applies aggravating factors to extend an exclusion period beyond five years, the regulations identify specific mitigating factors she must consider to reduce the period of exclusion.  42 C.F.R. § 1001.102(c). 

Section 1128(f) of the Act provides an excluded individual with the right to an administrative hearing and to judicial review of the Secretary’s final action.  42 U.S.C. § 1320a-7(f).  The Secretary’s regulations implement the right to a hearing before an ALJ at 42 C.F.R. §§ 1001.2007(a) and 1005.2.  The rights of both the sanctioned party and the IG to participate in a hearing are set forth at 42 C.F.R. § 1005.3.  The standard of proof is a preponderance of the evidence.  42 C.F.R. § 1001.2007(c).  Petitioner bears the burden of proof and the burden of persuasion on any affirmative defenses or mitigating factors, while the IG bears the burden on all other issues.  42 C.F.R. §§ 1001.2007(c), 1005.15(b), (c). 

Page 4

VI. Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are set forth in bold and followed by pertinent findings of fact and analysis. 

1. A. There is a basis for Petitioner’s exclusion pursuant to section 1128(a)(3) of the Act.

Section 1128(a)(3) of the Act mandates exclusion from participation in Medicare, Medicaid, and all federal health care programs where an individual has been convicted, under federal or state law, of a felony criminal offense that occurred after August 21, 1996 relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct committed in connection with the delivery of a health care item or service.  42 U.S.C. § 1320a-7(a)(3); 42 C.F.R. § 1001.101(c).  The IG has established these elements by a preponderance of the evidence. 

1. 1. Relevant Facts

On June 24, 2020, a grand jury sitting in the District of New Jersey charged Petitioner and others with Conspiracy to Commit Health Care and Wire Fraud, as well as the underlying crimes of Health Care Fraud and Wire Fraud.  IG Ex. 4 at 1, 8-27.  The grand jury accused Petitioner, a physician, of authorizing medically unnecessary prescriptions and conspiring with others to cause the submission of false and fraudulent claims for unnecessary prescriptions and patient visits to a pharmacy benefits administrator that provided management services and claims adjudication for beneficiaries of multiple health insurers, including two state insurance programs.  Id. at 1-4.  According to the indictment, this criminal conspiracy took place from approximately April 2015 to February 2016.  Id. at 3. 

On March 27, 2023, Petitioner executed an agreement with federal prosecutors to plead to one felony count of Conspiracy to Commit Health Care Fraud.  IG Ex. 2 at 1.  That same day, the U.S. Attorney for the District of New Jersey filed a superseding information charging Petitioner with one count of Conspiracy to Commit Health Care Fraud.  IG Ex. 3.  The superseding information specified Petitioner conspired with others to defraud a health care benefit program by submitting false and fraudulent insurance claims for prescription medications based on unnecessary patient visits.  Id. at 3-4.  To further the conspiracy, Petitioner signed prescriptions for medications with high reimbursement rates for patients referred to him by his co-conspirators and billed insurance plans to receive payments for seeing these patients.  Id. at 5-6.  In some instances, he prescribed medications before a patient visit and without medical evaluation or documentation of a condition that would warrant the prescription in question.  Id. at 6-7.  Petitioner often prescribed excessive quantities of prescription medication and authorized the maximum number of refills.  Id. at 7. 

Page 5

On October 30, 2024, the District Court accepted Petitioner’s plea and entered judgment against him.  IG Ex. 6.  The court imposed a 15-month sentence of incarceration and ordered Petitioner to pay $5,127,402.62 in restitution to several defrauded health insurers, including the New Jersey Division of Pension and Benefits and the New Jersey Employer Group Waiver Plan.  Id. at 2, 6. 

2. 2. Petitioner was convicted of a felony criminal offense that occurred after August 21, 1996.

Petitioner does not dispute his conviction of an offense committed after August 21, 1996.  P. Br. at 1-2.  The IG has established this element by a preponderance of the evidence. 

1. 3. Petitioner’s criminal offense related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct within the meaning of section 1128(a)(3) of the Act.
2. 4. Petitioner’s criminal offense was committed in connection with the delivery of a health care item or service.

Petitioner concedes both these elements.  P. Br. at 2.  It would be difficult to do otherwise as his offense of conviction on its face constitutes a criminal offense related to fraud or other financial misconduct committed in connection with the delivery of a health care item or service, and thus requiring exclusion by the Act.  The IG has established this element by a preponderance of the evidence. 

1. B. Petitioner must be excluded for a minimum of five years.

Because I have concluded a basis exists to exclude Petitioner under section 1128(a)(3) of the Act, Petitioner must be excluded for a minimum period of five years.  42 U.S.C. § 1320a-7(c)(3)(B); 42 C.F.R. § 1001.102(a).  Neither I nor the IG have the authority to reduce the period of exclusion to less than five years. 

1. C. The IG has established two aggravating factors to support an exclusion period beyond the five-year statutory minimum.

The regulations establish aggravating factors that the IG may consider to increase the period of exclusion beyond the mandatory five-year minimum period.  42 C.F.R. § 1001.102(b).  In this case, the IG identified two aggravating factors to justify excluding Petitioner for more than five years.  IG Ex. 1 at 1; 42 C.F.R. § 1001.102(b)(1), (5).  The IG has established these aggravating factors by a preponderance of the evidence.  

Page 6

1. 1. The IG established the acts resulting in Petitioner’s conviction caused a financial loss of $50,000 or more to a government agency or program.

The IG asserts Petitioner’s criminal acts caused financial loss of $50,000 or more to one or more entities, including a government agency or program.  IG Br. at 7.  The record confirms the District Court ordered Petitioner to pay a total of $5,127,402.62 in restitution to several defrauded parties, including two New Jersey agencies and three private health insurers.  IG Ex. 6 at 6. 

Petitioner objects to the IG’s use of the total loss amount from the conspiracy to establish this aggravating factor.  P. Br. at 2-3.  He acknowledges his joint and several liability for the aggregate loss amount but avers he personally gained only $6,200 from his criminal acts.  Id. at 3 (citing P. Ex. 1 at 22).2  Petitioner’s claim that the financial loss he conspired to cause should not be used to trigger this aggravating factor is without merit.  The plain language of the regulation requires only that the IG establish a loss amount of at least $50,000 to apply this aggravating factor; the amount of gain to the offender is irrelevant.  42 C.F.R. § 1001.102(b)(1) (“ The acts resulting in the conviction, or similar acts, caused, or were intended to cause, a financial loss to a government agency or program or to one or more other entities of $50,000 or more.”) (emphasis added); Craig Richard Wilder, DAB No. 2416 at 9 (2011) (“[T]he regulation does not say that an individual or entity has to benefit from the program loss, only that the offense ‘caused’ or ‘intended to cause’ the loss.”).  The IG has established this aggravating factor by a preponderance of the evidence. 

2. 2. The IG established the sentence imposed against Petitioner included a period of incarceration.

The record confirms the District Court sentenced Petitioner to 15 months of incarceration.  IG Ex. 6 at 2.  Petitioner concedes his sentence included a period of incarceration.  P. Br. at 3.  The IG has established this aggravating factor by a preponderance of the evidence. 

1. D. Petitioner has not established a mitigating factor I may consider to reduce the exclusion period.

The IG did not apply mitigating factors to determine the length of Petitioner’s exclusion.  IG Br. at 8; IG Ex. 1.  Petitioner asserts several bases warrant mitigation, including the fact that his criminal offense was an isolated occurrence, that no patients were harmed, and that he has no prior history of civil or criminal penalties.  P. Br. at 4.  Unfortunately, I 

Page 7

may only consider the three circumstances identified at 42 C.F.R. § 1001.102(c) to establish mitigation.3  Petitioner has not established mitigating factors for me to consider in this case.  

1. E. A 21-year exclusion period is not unreasonable.

I must uphold the IG’s determination as to the length of exclusion unless it is unreasonable.  42 C.F.R. § 1001.2007(a)(1)(ii).  This means that:  

• [s]o long as the amount of time chosen by the OIG is within a reasonable range, based on demonstrated criteria, the ALJ has no authority to change it under this rule.  We believe that the deference § 1001.2007(a)(2) grants to the OIG is appropriate, given the OIG’s vast experience in implementing exclusions under these authorities.  

57 Fed. Reg. 3298, 3321 (Jan. 29, 1992).

The quality of the aggravating or mitigating factors is of greater significance than the mere number of the factors present in a given case.  The preamble to the final rule establishing the exclusion regulations states:  

• 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 

Page 8

• formula, but must be determined in the context of the particular case at issue. 

57 Fed. Reg. at 3314-15 (1992).  

While ALJs theoretically enjoy de novo review of the IG’s exclusion action, I may not substitute my own judgment for that of the IG.  Richard E. Bohner, DAB No. 2638 at 2 (2015) (citations omitted), aff’d, Bohner v. Burwell, No. 15-cv-4088, 2016 WL 8716339 (E.D. Pa. Dec. 2, 2016).  Instead, I must defer to the IG’s self-delegated discretion owing to her extensive experience in exclusion and because these actions are, according to the Board, remedial and non-punitive in nature.  Id. at 9.  I am permitted only to review “whether the facts as proven show the resulting period to be not unreasonable.”  Fuentes, DAB No. 2988 at 9; see also Wilder, DAB No. 2416 at 8 (“the ALJ’s role is limited to considering whether the period of exclusion imposed by the I.G. was within a reasonable range, based on demonstrated criteria.” 

In doing so, I may not consider other exclusion actions taken by the IG.  The Board has characterized the selection of an exclusion period to be so uniquely case-specific that even comparing the IG’s selection in other similarly situated cases is “of limited value” and “not dispositive on the question of reasonableness of an exclusion period in a given case.”  Eugene Goldman, M.D., a/k/a Yevgeniy Goldman, M.D., DAB No. 2635 at 11 (2015).  Moreover, the IG has no obligation to articulate her reasoning for the period of exclusion she does select.  The Board has instead held ALJs may not “intrude on the [IG’s] internal decision-making process” in selecting a proposed exclusion period.  Edwin L. Fuentes, DAB No. 2988 at 10-11 (2020). 

In sum, upon establishing certain aggravating factors, the IG may select a prolonged period of exclusion.  She need not articulate the basis for that selection, including the weight she gave to each aggravating factor.  The IG’s regulations limit me to assessing the unreasonableness of her selection.  But in doing so, neither I nor the excluded party may inquire into the IG’s internal selection process.  Nor may I consider similar exclusion actions.  I must instead defer to the IG’s “vast experience” in excluding individuals.  

It is difficult to imagine a circumstance where, if applicable aggravating and mitigating factors are correctly identified, any ALJ could find any exclusion period selected by the IG in any exclusion action to be anything but “not unreasonable.”  The constraints imposed by the IG’s regulations have the effect of vitiating the impartial adjudication Congress intended ALJs to provide in cases proceeding under the auspices of the Administrative Procedures Act.  As such, it is possible a reviewing court could find a regulatory regime that allows the IG essentially unfettered authority to select prolonged exclusion actions arbitrary and capricious, either on its face or in application.  Until that 

Page 9

time, however, I apply the regulations and applicable Board case law to determine whether the period of exclusion selected by the IG is not unreasonable.

Here, the two aggravating factors identified by the IG appear to support her determination to impose a longer period of exclusion.  First, Petitioner participated in a criminal conspiracy that resulted in profound losses to state and private health insurance plans exceeding $5 million.  IG Ex. 6 at 6.  That amount is over 100 times the regulatory minimum for program loss to be considered an aggravating factor.  42 C.F.R. § 1001.102(b)(1).  This loss amount can only be characterized as exceptional and therefore deserving of significant weight.  Eric X. Alonso, DAB No. 3186 at 10 (2025) (“[L]arge multiples of the applicable threshold for consideration support significant prolongation of an exclusion period”); Phong Hung Tran, M.D., DAB No. 3148 at 20 (2024) (characterizing a loss amount over 20 times the threshold amount as “an exceptional aggravating factor to be accorded substantial weight.”); Hussein Awada, M.D., DAB No. 2788 at 7 (2017) (“The millions of dollars in losses that Petitioner’s actions caused . . . merits a substantial increase in the length of his exclusion beyond the minimum period.”); Laura Leyva, DAB No. 2704 at 9-10 (2016) (observing it is “entirely reasonable” to give significant weight to loss amounts substantially larger than the minimum regulatory threshold). 

Petitioner argues the weight the IG gave to the substantial loss he and his co-conspirators caused is disproportionate to his personal gain from their criminal acts, which he asserts to be only $6,200.  P. Br. at 3 (citing P. Ex. 1 at 22).  Even if true, Petitioner’s claim is irrelevant to the reasonableness of the length of his exclusion, the primary purpose of which is to protect health care programs from untrustworthy individuals.  Yolanda Hamilton, M.D., DAB No. 3061 at 24 (2022); Kimberly Shipper, P.A., DAB No. 2804 at 8 (2017).  That Petitioner purportedly gained so little while causing such a massive loss speaks more to his naiveté as a criminal co-conspirator than his trustworthiness to participate in federal and state health care programs.

The District Court’s imposition of a 15-month sentence of incarceration confirms the significance of Petitioner’s criminal conduct.  IG Ex. 6 at 2.  A sentence of incarceration is a “reasonable proxy . . . for untrustworthiness in the context of deciding how much weight to give the aggravating factor for incarceration.”  Goldman, M.D., DAB No. 2635 at 5.  It is true that in isolation, a 15-month sentence of incarceration does not suggest an unusually serious offense.  In addition, Petitioner points to his lack of criminal history and the one-time nature of his offense of conviction to argue the IG selected an unreasonably long exclusion period.  P. Br. at 4. 

But these features suggest the opposite of what Petitioner claims they establish:  despite his lack of criminal history and the non-violent nature of his isolated white-collar offense, the District Court still opted to impose a sentence of incarceration.  In this context, the imposition of even a relatively short period of incarceration reflects the significance of 

Page 10

Petitioner’s offense.  See Roji Esha, DAB No. 3076, at 26 (2022) (“[W]hile the [90-day] term of incarceration in [p]etitioner’s sentence was relatively short, the fact that her sentence included a term of incarceration alone serves as evidence of additional untrustworthiness. . . .”); Jason Hollady, M.D., a/k/a Jason Lynn Hollady, DAB No. 1855 at 8 (2002) (characterizing even a sentence of nine months as “relatively substantial”).  Similarly, Petitioner’s early release after seven months does not speak to his trustworthiness to participate in governmental health care programs.  He may simply have been released to alleviate crowding or to reward good behavior; neither are reasons to ignore the lack of trustworthiness reflected by Petitioner’s criminal conduct. 

Petitioner also asserts a 21-year period of exclusion is unreasonable because his patients were not harmed by his criminal conduct.  P. Br. at 4.  This is not at all clear from the record.  To resolve the charges against him, Petitioner conceded to prescribing medications in excessive amounts for patients referred to him by his co-conspirators without medical need, often without bothering to evaluate the patients in question or document their condition.  IG Ex. 2; IG Ex. 3 at 3-7.  It is at least likely Petitioner created some risk of harm to his patients by failing to meet the most basic professional standards of care. 

In any case, evidence of actual patient harm is not necessary to justify a prolonged period of exclusion.  But Petitioner’s apparent lack of concern for his patients, all while conspiring to bilk several health insurers for millions of dollars, suggests the IG properly weighed the significance of Petitioner’s offense.  I conclude the IG reasonably assessed the nature of Petitioner’s criminal conduct in light of the aggravating factors she established to conclude Petitioner’s offense of conviction reflected a profound level of untrustworthiness that demanded a significant period of exclusion.  The 21-year exclusion period selected by the IG is not unreasonable. 

VII. Conclusion

I affirm the IG’s determination to exclude Petitioner for 21 years from participating in Medicare, Medicaid, and all federal health care programs pursuant to 42 U.S.C. § 1320a-7(a)(3).