SUBJECT: Russell Mark Posner,

Petitioner,

Inspector General

FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION

On March 17, 2006, the Departmental Appeals Board (Board) received Russell Mark Posner's (Petitioner) undated pro se appeal of the February 13, 2006 decision of Administrative Law Judge (ALJ) Richard J. Smith. Russell Mark Posner, DAB CR1410 (2006)(ALJ Decision). The ALJ Decision affirmed the Inspector General's (I.G.) imposition on Petitioner of a 14-year exclusion from participation in Medicare, Medicaid, and all other federal health programs. Petitioner asks that the exclusion be reduced to zero, arguing that the statutory basis of his exclusion was not proven and that the use of aggravating factors to extend the exclusion period beyond the five-year minimum was unconstitutional. For the reasons explained below, we find no merit in Petitioner's arguments and affirm the ALJ Decision.

[Page 2] Background ⁽¹⁾

Petitioner was a licensed chiropractor in Florida. In 2001, he was indicted in federal court with five co-defendants on 219 counts. The felony charges included fraud and abuse of publicly-funded health care programs, as well as other public and private programs. On February 24, 2003, Petitioner pleaded guilty to three felonies, numbered as Counts 2 (submitting a false claim to Medicare), 181 (providing false information in a disability claim to the Social Security Administration), and 219 (leading a racketeering scheme extending over more than five years). The court sentenced Petitioner to concurrent terms of incarceration with the longest being 63 months and ordered restitution of $782,187.72. The State Board of Chiropractic Medicine suspended Petitioner's license.

The I.G. notified Petitioner that he was to be excluded for 14 years under section 1128(a)(1) of the Social Security Act (Act). Section 1128(a)(1) requires the mandatory exclusion of any "individual or entity that has been convicted of a criminal offense related to the delivery of an item or service under Title XVIII [of the Act] or under any State health care program." The exclusion must be for a period of not less than five years. Section 1128(c)(3)(B) of the Act; 42 C.F.R. § 1001.101(a). The regulations provide a list of aggravating factors that may be considered as a basis for imposing a longer period, of which the ALJ found that the following three were present:

(1) The acts resulting in the conviction, or similar acts, that caused, or were intended to cause, a financial loss to a Government program or to one or more entities of $5,000 or more. (The entire amount of financial loss to such programs or entities, including any amounts resulting from similar acts not adjudicated, will be considered regardless of whether full or partial restitution has been made).

* * *

(5) The sentence imposed by the court included incarceration.

[Page 3] * * *

(9) Whether the individual or entity was convicted of other offenses besides those which formed the basis for the exclusion, or has been the subject of any other adverse action by any Federal, State or local government agency or board, if the adverse action is based on the same set of circumstances that serves as the basis for imposition of the exclusion.

42 C.F.R. § 1001.102(b)(1), (5) and (9); see ALJ Decision at 6. ⁽²⁾

If, but only if, the period of exclusion has been lengthened beyond five years based on an aggravating factor, one of three listed mitigating factors, but no others, may be considered to reduce the exclusion period, but in no case below five years. 42 C.F.R. § 1001.102(c). The single mitigating factor which Petitioner raised before the ALJ states:

The record in the criminal proceedings, including sentencing documents, demonstrates that the court determined that the individual had a mental, emotional or physical condition before or during the commission of the offense that reduced the individual's culpability . . .

42 C.F.R. § 1001.102(c)(2). The ALJ concluded that Petitioner failed to prove the existence of this mitigating factor. ALJ Decision at 7.

The ALJ granted the I.G.'s motion for summary affirmance. ALJ Decision at 1. This appeal followed.

Standard of review

Our standard of review of the ALJ Decision to uphold the I.G.'s exclusion is set by regulation. We review to determine whether the decision is erroneous as to a disputed issue of law and whether the decision is supported by substantial evidence in the record as a whole as to any disputed issues of fact. 42 C.F.R. § 1005.21(h).

[Page 4] Statement of issues

On appeal, Petitioner raises the following challenges:

(1) Petitioner asserts that no exclusion should apply because the only count to which he pleaded guilty that involved a dollar amount (Count 2) did not "exceed the $5,000 dollar minimum threshold required by the act to exclude." Petitioner Notice of Appeal at 1.

(2) Petitioner argues that only the single count of Medicare fraud to which he pleaded guilty (Count 2) should have been considered in evaluating the aggravating factor involving loss to a government program or other entities and that the ALJ improperly denied his motion to strike from the record as evidence against him all of the indictment except Count 2.

(3) Petitioner contends that the ALJ erred in denying the applicability of the asserted mitigating factor of reduced culpability.

(4) Petitioner claims that a Supreme Court decision, United States v. Booker, 543 U.S. 220 (2005), should be applied here to make the use of any aggravating factors unconstitutional. Further, Petitioner argues that any exclusion greater than five years violates the constitutional bar on double jeopardy.

Before reaching the merits of this dispute, we must first dispose of a procedural matter. The appeal regulations provide for the appellant to submit a written brief with the notice of appeal and for any opposing party to file a response within 30 days of receipt of the notice of appeal. 42 C.F.R. § 1005.21(c). Reply briefs are allowed only as permitted by the Board. Id. The I.G. filed a responsive brief dated April 20, 2006. The Board wrote to the parties to request the I.G. to show whether the April 20 brief was timely filed based on when the I.G. received the notice of appeal. Board letter, dated April 25, 2006. The I.G. responded with a letter dated April 26, 2006, asking the Board to accept the I.G. brief and explaining that the I.G. received the notice of appeal directly from Petitioner on March 15, 2006, but received the Board's acknowledgment of that notice of appeal on March 21, 2006. The I.G. claimed that it used the latter date to calculate that its brief was due on April 20, 2006. Petitioner submitted a reply brief, dated April 26, 2005, without requesting [Page 5] permission from the Board to file a reply brief. Thereafter, Petitioner also submitted a letter asking that the Board exclude the I.G. brief as untimely and that the Board further reverse the ALJ Decision on the ground of the absence of any timely objection from the I.G. Petitioner letter to Board, dated May 2, 2006. Petitioner agreed with the I.G. that the I.G. brief was due on April 20, 2006, and that it was sent by Federal Express on that date, but argued that the Board's receipt date of April 21, 2006 governed and that the I.G. brief was untimely for that reason.

Both parties are mistaken as to the rules governing filing of briefs, and neither has complied with them. The I.G.'s brief was due 30 days after the I.G.'s receipt of Petitioner's notice of appeal, not 30 days after the I.G.'s receipt of the Board's acknowledgment. The timeliness of filings is governed by the date they are mailed, not the date when they are received by the Board. 42 C.F.R. § 1005.11(a)(4). The I.G.'s brief was mailed more than 30 days after it received the notice of appeal from Petitioner and, thus, was filed late. Petitioner filed his reply brief without having first obtained the Board's permission.

In the interest of a full record and to resolve this procedural issue in a manner that is fair to both parties, the Board will accept both the I.G.'s brief and Petitioner's reply brief. As will become clear in our discussion of the merits of the dispute below, however, the outcome would be the same even had we not considered the responsive briefing. ⁽³⁾ The issues are at heart legal in nature and their resolution is controlled by the applicable statute and regulations.

We turn next to the four issues raised by Petitioner's appeal.

1. No minimum dollar amount is required for a mandatory exclusion to apply under section 1128(a)(1).

Petitioner's first exception is based on the false assumption that a mandatory exclusion could only apply here if the Medicare fraud for which he was convicted had, in itself, resulted in a loss of $5,000 or more. The statute does not impose any such prerequisite. As quoted above, section 1128(a)(1) of the Act requires only a conviction "related to the delivery of an item or [Page 6] service" under Medicare or a State health care program. Petitioner does not contest his conviction under Count 2 which the indictment describes as "knowingly and willfully" having made and presented to Medicare a $215 claim "for medical and chiropractic services" knowing the claim to be "false, fictitious and fraudulent." ⁽⁴⁾ I.G. Ex. 1, at 11. On its face, this charge to which Petitioner pleaded guilty meets the elements of section 1128(a)(1). Petitioner points to nothing in the Act that would require that the amount involved in the delivery of an item under Medicare exceed $5,000, and we find no such requirement.

Presumably, Petitioner derived the $5,000 amount from the aggravating factor in the regulations at 42 C.F.R. § 1001.102(b)(1), discussed in the next section, that is triggered by a financial loss of $5,000 or more. Petitioner is mistaken, however, to think that, even if we find no such loss, his exclusion could be reduced below the mandatory minimum of five years. The $5,000 amount in 42 C.F.R. § 1001.102(b)(1) applies only to determining whether an aggravating factor exists for purposes of increasing the length of an exclusion beyond the five-year minimum, not to determining whether the I.G. had a basis for the exclusion.

2. The ALJ did not err in applying the aggravating factor under 42 C.F.R. § 1001.102(b)(1).

Petitioner argues that, since the ALJ relied on only his conviction under Count 2 of the indictment to find that an exclusion under section 1128(a)(1) was mandated, only the single count of Medicare fraud for which he was convicted should be relevant for purposes of calculating the financial loss for the aggravating factor at section 1001.102(b)(1), and that any financial loss caused by the other two criminal counts to which he pleaded guilty should be disregarded for this purpose. Petitioner Notice of Appeal at 1. As noted, the false claim identified in Count 2 was valued at $215. Petitioner further asserts that the other two counts to which he pleaded "do not have any monetary values that are the COUNT DIRECTLY [Page 7] [sic] . . . which must be met to apply to this case." Id. (emphasis and ellipsis in original). ⁽⁵⁾

In his motion filed June 24, 2006, Petitioner requested that the ALJ strike all other portions of his indictment except Count 2 from the record. He argued that those counts dismissed as part of the plea agreement constituted "untrue and unproven facts" which would be prejudicial and inflammatory. Petitioner Motion, June 24, 2006, at 1. The ALJ denied the motion, simply citing 42 C.F.R. § 1005.17(b), (d), and (g). ALJ Order, July 6, 2005, at 1. The cited provisions deal with the admissibility of evidence before the ALJ and state that the ALJ is not bound by the Federal Rules of Evidence. In addition, the ALJ has the power to exclude unreliable evidence or evidence the probative value of which is substantially outweighed by its risk of unfair prejudice or confusion. Further, evidence of crimes, wrongs or acts other than the conviction constituting the basis of the exclusion is admissible to show "motive, opportunity, intent, knowledge, preparation, identity, lack of mistake, or existence of a scheme." Section 1005.17(g). We construe the ALJ's order as reflecting his implicit determination that the probative value of the indictment as a whole outweighed any risk that he would be unfairly prejudiced or confused by it. Here, the I.G. proffered the evidence to establish an element of the aggravating factor, namely whether the conviction which caused the exclusion and any similar acts collectively caused a loss of $5,000 or more to one or more specified programs or entities.

Although the ALJ's order was terse, his fuller discussion of aggravating factors in the ALJ Decision makes clear that his order denying the motion to exclude portions of the indictment was indeed consistent with his detailed evaluation of its probative value under the regulation. ALJ Decision at 8-15. The ALJ pointed out that, while Petitioner "is entirely correct in noting that his plea of guilty to Count 2 established . . . [$215] as the only loss directly linked to an admitted violation of 18 U.S.C. § 287, he fails to acknowledge that the regulation permits the I.G. - and me - to consider 'similar acts' in determining the amount of loss." ALJ Decision at 9. The ALJ also emphasized that Petitioner "pleaded guilty not simply to Count 2 of the Indictment, but to Counts 181 and 219 as well." Id. at 10. The indictment in its entirety was thus clearly relevant to the evaluation of the amount of loss suffered as a result of "similar acts" by Petitioner even though the counts [Page 8] other than 2, 181, and 219 were dismissed as part of the plea agreement. Furthermore, the indictment contains internal cross-references incorporating into the counts to which Petitioner pleaded guilty the allegations made as to many of the other counts. I.G. Ex. 1, at 10, 32, and 56. In addition, because of the extensive cross-referencing and incorporation by reference, any attempt to admit only the parts referenced in the counts to which Petitioner pleaded guilty would likely make the document unintelligible. Finally, we see no reason to conclude that anything in the remaining parts of the indictment would or did prejudice the ALJ in any way. His careful analysis of the relevant facts in the indictment and plea agreement evidences that he was not distracted by any extraneous matter in the indictment. We therefore agree with the ALJ that Petitioner's motion to exclude the full indictment was without merit.

Turning to the substantive basis for the applicability of the aggravating factor, we observe that a variety of amounts have been put forward to gauge the loss Petitioner caused to various programs and entities by his criminal activity. In the notice of exclusion, the I.G. stated that $22,666 was the amount of restitution ordered and relied on that amount in finding a financial loss to the program of more than $5,000. We agree with the ALJ that the basis for the I.G.'s calculation of the amount of restitution was unclear, especially since the Court order itself shows restitution of $782,187.72. I.G. Ex. 3, at 5. The ALJ also correctly noted that Petitioner's plea agreement recites a "relevant amount of actual, probable or intended loss" of "more than $5,000, but not more than $800,000." ALJ Decision at 10, citing I.G. Ex. 2, at 3. Ultimately, however, the ALJ found it unnecessary to determine which, if any, of these amounts could be used to determine whether the $5,000 threshold had been crossed because the record established that Petitioner had "admitted at least one total amount with remarkable precision, and that amount satisfies the requirement of 42 C.F.R. § 1001.102(b)(1) more than sevenfold." ALJ Decision at 10. The ALJ focused on Petitioner's conviction under Count 219 for racketeering. The plea agreement set out the specific racketeering acts "which formed the predicate for the defendant's guilt," and the indictment identifies the amounts involved for each act. I.G. Ex. 2, at 1; see also ALJ Decision at 12-14; I.G. Ex. 1, at 13-14, 19, 49-50, 53-54, 57-58. The ALJ summed the amounts under Count 219, along with the $219 associated with Count 2, to arrive at a total of $38,351.50 in losses admitted to for those specific acts to which Petitioner pleaded guilty. This total, as the ALJ noted, is more than seven times the $5,000 threshold for the aggravating factor.

[Page 9] Petitioner does not challenge the calculation of this total and does not directly deny that the losses were incurred by public programs and private health insurance entities of the kinds covered by the regulation. Petitioner's allusion to Count 219 having no monetary value associated with it that "counts directly" seems to mean only that the amounts associated with Count 219 should not be counted against him when determining the amount of loss since the ALJ relied only on Count 2 as the basis for the exclusion. We have already rejected that argument since the law clearly allowed the ALJ to rely on similar acts when determining the amount of loss. The ALJ clearly articulated the similarity of the acts identified or incorporated in Count 219 and those identified and incorporated in Counts 2 and 181, given their "almost classical unities of time, place, action, and actors" composing together "a common matrix of criminality." ALJ Decision at 14.

The monetary amounts associated with Count 219 are fully set out in the indictment by the express incorporation of specific alleged acts with defined monetary values. The legal effect of the incorporation is the same as if each amount were repeated in full under the section on Count 219. Petitioner, however, seems not to be denying these figures but rather to be simply insisting that only the $219 loss by the Medicare program to which he admitted under Count 2 of the indictment should have been considered. As we have discussed, his position is not supported by the law.

We conclude that Petitioner has shown no error in the ALJ's conclusion that the aggravating factor at 42 C.F.R. § 1001.102(b)(1) is applicable.

3. The ALJ did not err in concluding that Petitioner failed to prove the existence of the asserted mitigating factor.

Petitioner argues that he had established the existence of the mitigating factor described in 42 C.F.R. § 1001.102(c)(2), which provides:

The record in the criminal proceedings, including sentencing documents, demonstrates that the court determined that the individual had a mental, emotional or physical condition before or during the commission of the offense that reduced the individual's culpability.

Petitioner Notice of Appeal at 2-3. Petitioner argues that the sentencing record includes a recommendation that he attend a residential drug abuse program, which he contends demonstrates [Page 10] his impaired mental state. Id. at 2. He also relies on an evaluation conducted prior to the imposition of sentence by a doctor who concluded that Petitioner had "a long history of drug abuse/dependency, in addition to a history of compulsive gambling." Pet. Ex. 1, at 1. Petitioner further contends that the ALJ erroneously concluded that the judge sentenced him to the longest available sentence under the sentencing guidelines. Id., referencing ALJ Decision at 21. According to Petitioner, the applicable range was corrected in the pre-sentence report from 51-63 months of incarceration up to 61-73 months. Id. As a result, Petitioner argues, the term of 63 months imposed was actually at the low end, rather than the high end, of the available sentences. Id. Petitioner thus suggests that the judge's lenity, together with the placement recommendation, should have established that the court considered his culpability reduced, pointing to an earlier Board case as precedent for that proposition. Id., citing Arthur C. Haspel, D.P.M., DAB No. 1929 (2004).

In Haspel, a transcript of the sentencing proceedings showed that the judge expressly found the defendant to be suffering from an addiction and the ALJ inferred that the sentencing judge's downward departure from the sentencing recommendation reflected, at least in part, the finding of addiction. The ALJ in Haspel read a prior Board decision (Joseph M. Rukse, Jr., R.Ph., DAB No. 1851 (2002)) as nevertheless precluding application of the mitigating circumstance in section 1001.102(c)(2) absent an express finding by the sentencing judge of a nexus in time and causation between the addiction and the crime. Arthur C. Haspel, D.P.M., DAB CR1149, at 8 (2004). The Board reversed the ALJ's conclusion that this mitigating circumstance did not apply. The Board explained that in cases where the sentencing judge would not be required as part of the sentencing process to make a finding about whether addiction was present at the time of the crime, the regulation should not be read so narrowly as to be inapplicable absent an explicit finding by the judge. Instead, the Board engaged in a case-specific analysis of whether sufficient evidence supported an inference that the sentencing judge made the necessary determination, explaining as follows:

The primary focus of Petitioner's own statement to the judge, as well as the unrebutted testimony of his single witness, and the argument to the court from his attorney (who had known Petitioner personally for 25 years) was the impact of Petitioner's addiction to drugs on his life both before and during the commission of the offenses. P. Ex. 2, at 16-21. The record also details the extensive and time-consuming efforts Petitioner took to rehabilitate himself [Page 11] from that addiction after his arrest. Id. at 7-10. The record is replete with details of the multiple negative effects of his addiction on his life and of his resulting impaired and confused mental state at the time he was committing the two counts of offenses with which he was charged. Id. at 16-21. The judge initially advised Petitioner that the maximum sentence was five years on each of the two counts, a fine of up to $250,000, and a term of supervised release of at least two years up to life. Id. at 3. The judge, however, clearly found that Petitioner was entitled to leniency since he sentenced him to only three months of home confinement and five years of supervised release and imposed no fine whatsoever. Id. at 22-26.

DAB No. 1929, at 5.

In the present case, the ALJ had the benefit of Haspel, and discussed it at some length, as well as the Rukse case. ALJ Decision at 16-21. The ALJ explained what he saw as the salient distinguishing features of this case from the posture of the petitioner in Haspel. First, the sentencing record from which to draw an inference is far scantier in the present case, containing no transcript of testimony or statements by the court, no formal presentencing report to the court, and no notice of the kind required by Federal Rule of Criminal Procedure 32(h) when a judge departs downward from the sentencing guidelines, each of which was present in Haspel. ALJ Decision at 20-21. The sole evidence of drug addiction in this case at the time of the offenses is the doctor's evaluation of Petitioner, which the ALJ found to be uncorroborated, to lack detail and to be simply a report of statements made by Petitioner himself to the examiner. ALJ Decision at 22. Even expanding his view to the entire record, the only other piece of evidence on drug use which the ALJ found was a form finding Petitioner eligible for residential drug treatment with a documented diagnosis. However, the ALJ noted that the form was completed more than a year after the sentencing and more than four years after the last offense occurred. ALJ Decision at 23. Overall, the ALJ concluded that the evidence adduced by Petitioner did not compare in weight, relevance, reliability, or persuasiveness to the evidence which the Board described in Haspel as "replete with details" of that petitioner's "impaired and confused mental state" at the time of his offenses. ALJ Decision at 21-24; DAB No. 1929, at 4.

In addition, the ALJ contrasted the "very mild" sentence of brief home confinement and probation in Haspel, with the 63 months of imprisonment to which Petitioner was sentenced. ALJ Decision at 21, 24. The ALJ found no lenity like that afforded Haspel and, [Page 12] thus, nothing to suggest a need for the type of explanatory inference drawn by the Board in Haspel. Id. The plea agreement set out the anticipated applicable range as 51-63 months, but made clear that the estimate was not binding on the court and that Petitioner agreed not to withdraw his plea or appeal the sentence imposed, with certain exceptions. I.G. Ex. 2, at 3-5. The actual sentence was 63 months on Count 219 (and 60 months on the other two counts to run concurrently). I.G. Ex. 3, at 2.

On appeal to us, as mentioned above, Petitioner asserts that his sentence was based on a later change in the applicable range, such that the court chose a term at the lower rather than the higher end of the corrected range. Petitioner Notice of Appeal at 2. However, no documentation in the record supports Petitioner's claim in this regard. Petitioner states that the correction was made in the presentencing report to the court, but he has not proffered that report to substantiate his statement.

Furthermore, Petitioner failed to argue before the ALJ that the sentencing range had changed in a way that demonstrated lenity and has given no reason why he could not have raised that claim below, when the existence of this mitigating factor was clearly at issue. The regulations provide that the Board will not consider any issue "that could have been raised before the ALJ but was not." 42 C.F.R. § 1005.21(e). We conclude that Petitioner failed to preserve the issue of the applicable sentencing range, but further conclude that even had the issue been properly presented to us, nothing in the record exists to support it.

We conclude that the ALJ reasonably distinguished the record and circumstances in this case from those in Haspel. We further conclude that the ALJ did not err in determining that Petitioner failed to prove the existence of the asserted mitigating factor.

4. Petitioner's constitutional claims are unavailing.

Petitioner makes two constitutional claims. The first is founded on the Booker case. Petitioner Notice of Appeal at 1-2. Booker held that in sentencing under mandatory guidelines a judge could not rely on facts that caused an upward change in the applicable sentence unless the facts were found by a jury beyond a reasonable doubt. The second claim is that the use of aggravating factors to increase his exclusion period beyond five years constitutes additional punishment for the same actions and thereby violates the prohibition against double jeopardy. Petitioner Notice of Appeal at 2.

[Page 13] The ALJ concluded that he lacked jurisdiction over claims that the statutory and regulatory provisions being applied as aggravating factors were unconstitutional. ALJ Decision at 8-9. Nevertheless, he noted that, even were he authorized to review these claims, Booker had no application in the administrative exclusion case before him and double jeopardy claims related to the exclusion process have been rejected by the courts. Id., citing Manocchio v. Kusserow, 961 F.2d 1539 (11th Cir. 1992) and Greene v. Sullivan, 731 F. Supp. 838 (E.D. Tenn. 1990). The courts have found the double jeopardy clause inapplicable because an exclusion is remedial in nature - protecting federal health care programs and their beneficiaries - whereas the double jeopardy clause applies only to punitive sanctions. See, e.g., Erickson v. United States, 67 F.3d 858, at 862, n.2 (9^th Cir. 1995). The Board has reached a similar conclusion when faced with analogous constitutional claims in the past. See, e.g., Susan Malady, DAB No. 1816 (2002). For these reasons, we decline to address further the merits of the constitutional claims asserted by Petitioner.

Conclusion

For the reasons explained above, we affirm the ALJ Decision in its entirety, including the ALJ's determination that the I.G.'s decision to enhance the term of Petitioner's exclusion to 14 years was not unreasonable.

Judith A. Ballard

Donald F. Garrett

Sheila Ann Hegy
Presiding Board Member

1. The following background information is drawn from the ALJ Decision and the record before the ALJ and summarized here for the convenience of the reader, but should not be treated as new findings.

2. Petitioner refers to all three aggravating factors in the notice of appeal, but he challenges only the aggravating factor based on the amount of financial loss. Further, the facts relating to the other two aggravating factors concerning his incarceration and license suspension are not disputed on appeal and are well-documented on the record.

3. Since the filing of reply briefs is left to the Board's discretion, Petitioner had no right to file a reply brief. However, the Board is accepting Petitioner's reply brief, and Petitioner was not prejudiced by the Board's acceptance of the I.G.'s late responsive brief.

4. Petitioner also does not contest his conviction of Counts 181 and 219, but the ALJ correctly concluded that he need not reach the issue of whether the crimes articulated in those counts would bear a similar relationship to a protected health care program. ALJ Decision at 8.

5. We discuss later what Petitioner appears to mean by this assertion.