Yohannes Tinsae, DAB No. 3084 (2023)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Petitioner Yohannes Tinsae appeals the decision of an Administrative Law Judge (ALJ), Yohannes Tinsae, DAB CR6153 (2022) (ALJ Decision).  The ALJ affirmed the determination of the Inspector General (I.G.) to exclude Petitioner from participation in all federal health care programs pursuant to section 1128(a)(3) of the Social Security Act (Act) for a period of five years based on Petitioner’s felony conviction for the criminal offense of knowingly or intentionally acquiring controlled substances by misrepresentation, fraud, forgery, deception, or subterfuge, in violation of 21 U.S.C. § 843(a)(3).

As set forth below, we conclude that the ALJ Decision is supported by substantial evidence and free of legal error.  Accordingly, we affirm the ALJ Decision.

Legal Background

Under Section 1128(a)(3) of the Act, the Secretary of Health and Human Services (Secretary) shall exclude from participation in any federal health care program –

any individual or entity that has been convicted for an offense which occurred after [August 21, 1996], under Federal or State law, 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 those specifically described in paragraph (1)) operated by or financed in whole or in part by any Federal, State, or local government agency, of a criminal offense consisting of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.

Act § 1128(a)(3).

The Secretary has delegated the exclusion authority in section 1128 to the I.G.  53 Fed. Reg. 12,993, 12,993 (Apr. 20, 1988); 48 Fed. Reg. 21,662, 21,662 (May 13, 1983).  The>

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I.G. in turn has issued regulations, codified in 42 C.F.R. Part 1001, implementing the delegated authority.  See 42 C.F.R. § 1001.101(c) (implementing section 1128(a)(3)).¹  Those regulations apply to and bind the I.G. in imposing exclusions, and they also apply to and bind ALJs and the Departmental Appeals Board (Board) in reviewing exclusions imposed by the I.G.  Id. § 1001.1(b).  As relevant here, an individual is “convicted” of a criminal offense “when a plea of guilty or nolo contendere by the individual . . . has been accepted by a Federal, State, or local court.”  Act § 1128(i)(3); see also 42 C.F.R. § 1001.2 (similarly defining “convicted”).

In an appeal of an exclusion, the individual excluded from program participation based on a criminal conviction is barred from collaterally attacking the basis for that underlying conviction on substantive or procedural grounds.  See 42 C.F.R. § 1001.2007(d).

The mandatory minimum period of an exclusion imposed under section 1128(a) is five years.  Act § 1128(c)(3)(B); 42 C.F.R. § 1001.102(a).  The I.G. may extend the five-year exclusion period based on the application of the aggravating factors in 42 C.F.R. § 1001.102(b).  The I.G. may consider the mitigating factors in section 1001.102(c) (and only those factors) to reduce the exclusion period to no less than five years, but only if the I.G. extends a mandatory minimum exclusion period based on the application of one or more aggravating factors in section 1001.102(b).  42 C.F.R. § 1001.102(c).

An excluded individual may request a hearing before an ALJ, but only on the issues of whether the I.G. had a basis for the exclusion and whether any period of exclusion longer than the mandatory minimum is unreasonable.  42 C.F.R. §§ 1001.2007(a)(1), 1005.2(a).  However, when, as in this case, the I.G. imposes a mandatory exclusion for the statutory minimum five-year period, an excluded individual may not challenge the length of the exclusion as unreasonable.  Id. § 1001.2007(a)(2).

A party dissatisfied with the ALJ’s decision may appeal it to the Board.  42 C.F.R. § 1005.21(a).  The Board will not consider any issue not raised in the parties’ briefs or any issue in the briefs that could have been raised before the ALJ but was not.  Id. § 1005.21(e).

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Case Background²

Petitioner was trained as a licensed pharmacist and, from approximately 2010 through 2015, was employed as the primary pharmacist at Dayton Pharmacy, located in Dayton, Ohio.  P. Ex. 1, at 7; P. Ex. 3, at 1; P. Ex. 4, at 3; P. Ex. 7, at 2.  From 2009 through 2017, I.A. and M.R. were both “involved in the ownership and/or operation” of Dayton Pharmacy.  P. Ex. 1, at 7.  Additionally, M.E. was employed as office staff, and later the office manager, at Dayton Pharmacy.  Id.  M.E. “maintained communication with [I.A.] and/or [M.R.] . . . on business operations.”  Id.  Petitioner and M.E. worked together at Dayton Pharmacy “on a daily basis.”  Id.  Dr. M.B. owned the building in which Dayton Pharmacy was located and owned and operated a medical practice in the same building.  Id.  Dayton Pharmacy filled a substantial proportion of Dr. M.B.’s prescriptions, and these prescriptions comprised “at least approximately 75%” of Dayton Pharmacy’s business.  Id. 

From 2008 until 2015, Dayton Pharmacy had four different wholesale suppliers of controlled substances.  P. Ex. 1, at 7.  In May 2012, “Supplier A” concluded that Dayton Pharmacy was a high-risk pharmacy and blocked any further distribution of controlled substances, effective immediately.  Id.  Subsequently, Dayton Pharmacy sought to increase its controlled substance supply through another supplier, which also blocked distribution of controlled substances after Dayton Pharmacy failed to provide supporting documentation.  Id. at 7-8.  In June 2012, I.A. replaced the previous suppliers with “Supplier B.”  Id. at 8.  In the application to Supplier B, I.A. “omitted listing Dayton Pharmacy’s two prior suppliers and falsely stated that Dayton Pharmacy had never been blocked by any prior distributors.”  Id. 

During a site inspection with Supplier B on August 27, 2014, Petitioner signed a questionnaire (Questionnaire) representing that no previous “wholesaler / manufacturer” had “ceased shipping or restricted purchases of controlled substances” to Dayton Pharmacy in the past five years or to “a pharmacy that was owned or is owned by [the] current owner/s during the past ten years.”  P. Ex. 5, at 4-5, 8; P. Ex. 1, at 8; P. Ex. 4, at 2.    

On or about June 2015, Dr. M.B. told Petitioner that Dr. M.B. did not want Dayton Pharmacy to continue to operate at the same location as Dr. M.B.’s medical practice and

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encouraged Petitioner to open Petitioner’s own pharmacy at that location.  P. Ex. 3, at 1-2.  Subsequently, Petitioner signed a lease prepared by Dr. M.B. to operate First Care Pharmacy, Petitioner’s new company, at the location of Dr. M.B.’s medical practice.  Id. at 2.  In October 2015, Petitioner voluntarily resigned from Dayton Pharmacy and prepared to open First Care Pharmacy.  Id.; P. Ex. 1, at 7; P. Ex. 6, at 2; P. Ex. 9, ¶ 13.  Dr. M.B. later sent Petitioner a letter “purporting to unilaterally cancel the lease,” and Petitioner opened First Care Pharmacy in a different location.  P. Ex. 3, at 2.

On January 5, 2017, Petitioner submitted a complaint against Dr. M.B. to the State Medical Board of Ohio.  P. Ex. 3, at 1; P. Ex. 1, at 7.  In the complaint, Petitioner accused Dr. M.B. of conduct that “raise[d] numerous potential violations of law,” including whether Dr. M.B. “[wa]s prescribing drugs for other than legal and legitimate therapeutic purposes.”  P. Ex. 3, at 5-6.

On April 9, 2019, Petitioner, I.A., M.R., and M.E. were charged, through a grand jury indictment in the United States District Court for the Southern District of Ohio, Western Division (District Court), with conspiring to obtain controlled substances by misrepresentation, fraud, forgery, deception, or subterfuge, in violation of 21 U.S.C. §§ 846 and 843(a)(3).  I.G. Ex. 2, at 1, 10 (¶ 47).³  On January 30, 2020, the United States Attorney filed a Superseding Information, which dropped the conspiracy count (21 U.S.C. § 846) and charged Petitioner with a single count of “knowingly or intentionally acquir[ing] controlled substances by misrepresentation, fraud, forgery, or subterfuge” in violation of 21 U.S.C. § 843(a)(3) beginning on or about January 1, 2012, and ending on or before October 31, 2015.  I.G. Ex. 3.⁴ 

Petitioner entered into a Plea Agreement on January 28, 2020.  P. Ex. 1, at 5.  Pursuant to the Plea Agreement, Petitioner agreed to plead guilty to “acquiring or obtaining controlled substances by fraud” in violation of 21 U.S.C. § 843(a)(3) and “admit[ted] that [Petitioner] [wa]s, in fact, guilty of” this offense.  Id. at 1, 6 (¶ 1).⁵ 

In the Statement of Facts attached to the Plea Agreement, Petitioner acknowledged that during the August 2014 site inspection by Supplier B, Petitioner “reaffirmed the false

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declaration that Dayton Pharmacy had not been blocked by any prior distributors.”  P. Ex. 1, at 8; see also P. Ex. 7, at 2.  Petitioner further acknowledged that, “as to Count 1 of the Superseding Information,” Petitioner “assisted in facilitating Dayton Pharmacy’s continued receipt of controlled substances from Supplier B by misrepresentation, fraud, forgery, deception, and/or subterfuge by misrepresenting material information to Supplier B to induce the wholesale supplier into continuing to dispense controlled substances.”  P. Ex. 1, at 8; see also P. Ex. 7, at 2 (stating that Petitioner “reaffirmed false statements, made by another, to a pharmaceutical supplier to assist in facilitating Dayton Pharmacy’s continued receipt of both controlled and non-controlled substances from the suppler.”).  Petitioner acknowledged that “[t]his conduct was in violation of Title 21, United States Code, Section 843 and Title 18, United States Code, Section 2.”  P. Ex. 1, at 8. 

On February 10, 2020, Petitioner pleaded guilty to the charge of violating 21 U.S.C. § 843(a)(3), and the District Court accepted Petitioner’s guilty plea.⁶  I.G. Ex. 6; P. Ex. 7, at 2.  The Sentencing Memorandum dated July 30, 2020, prepared by Petitioner’s attorney, stated Petitioner “reaffirmed a statement that was a misrepresentation” (the false or misleading information that no previous “wholesaler / manufacturer” had “ceased shipping or restricted purchases of controlled substances” to Dayton Pharmacy in the past five years or to “a pharmacy that was owned or is owned by [the] current owner/s during the past ten years”).  P. Ex. 4, at 2.  On August 12, 2020, the District Court sentenced Petitioner to three years of probation (to include participation in the curfew component of the location monitoring program for a period of 60 days), a $100 Special Assessment payable to the Victims Crime Fund, and 100 hours of community service.  I.G. Ex. 5.

On August 14, 2020, Petitioner signed a “Licensee or Registrant Self-Report Form” (Self-Report Form) intended “[t]o be used by a pharmacist . . . for reporting information on criminal or disciplinary actions” to the State of Ohio Board of Pharmacy.  P. Ex. 6, at 1-2.  Petitioner used this Self-Report Form to report Petitioner’s felony conviction for violating 21 U.S.C. § 843(a)(3).  Id. at 1.  In the Self-Report Form, Petitioner provided an account of actions regarding Petitioner’s felony conviction.  Id. at 2-3.

By letter dated January 31, 2022, the I.G. excluded Petitioner from participation in all federal health care programs (as defined in section 1128B(f) of the Act) based on Petitioner’s felony conviction (as defined in section 1128(i) of the Act) in the 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 Medicare and a State health care program) operated by, or financed in whole or in part, by any federal, state, or local government agency.  I.G. Ex. 1, at 1; see also 42 C.F.R. § 1001.101(c).  The I.G. stated that Petitioner would be excluded for the minimum

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statutory period of five years.  I.G. Ex. 1, at 1.  The I.G. informed Petitioner that the exclusion would take effect 20 days from the date of the exclusion letter.  Id.

ALJ Proceedings and Decision

Petitioner timely filed a request for hearing, contesting the I.G.’s five-year exclusion.  ALJ Decision at 2; Request for Hearing.  Following a telephone prehearing conference, the I.G. filed a brief (I.G. ALJ Br.) with I.G. proposed exhibits 1 through 6.  ALJ Decision at 2; I.G. Ex. List.  Petitioner filed a brief (P. ALJ Br.) and proposed exhibits 1 through 9.  ALJ Decision at 2; P. Ex. List.  The I.G. filed a reply brief.  ALJ Decision at 2.  The ALJ admitted every I.G. and Petitioner exhibit into the record without objection from either party.  ALJ Decision at 2. 

The ALJ advised the parties in a Summary Order that the ALJ would hold a hearing only if a party requested to cross-examine a witness for whom the opposing party provided written direct testimony.  See Summary Order at 5; Civil Remedies Division Procedures (CRDP) § 19(d).  Petitioner submitted a document titled “Affidavit of Yohannes Tinsae” (Petitioner’s Affidavit).  P. Ex. 9.  Petitioner’s Affidavit, dated July 8, 2022, was prepared for the purpose of submission to the ALJ.  ALJ Decision at 2 (noting that Petitioner “identified himself as a witness” and “submitted written direct testimony as a pre-hearing exhibit”) (citing P. ALJ Br. at 9-10; P. Ex. 9).

The ALJ noted that the I.G. proposed no witnesses and indicated they did not believe a hearing to be necessary.  ALJ Decision at 2 (citing I.G. ALJ Br. at 9).  The ALJ also noted Petitioner’s belief that a hearing was necessary.  Id.  Because the I.G. did not seek to cross-examine Petitioner as to Petitioner’s written direct testimony or object to its inclusion in the record, the ALJ determined there was no need to hold a hearing and proceeded to a decision based on the record before the ALJ.  Id. (citing CRDP § 19(d)).

The ALJ’s findings and conclusions included the following:

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

Petitioner was convicted under federal or state law of a criminal offense that occurred after August 21, 1996.

Petitioner’s offenses of conviction were felonies related to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.

Petitioner’s offense of conviction related to fraud committed in connection with the delivery of a healthcare item or service.

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Prior determinations by state agencies have no effect on the IG’s obligation under the Act to impose exclusion.

Petitioner must be excluded for a minimum of five years; the period of exclusion is therefore reasonable as a matter of law.

ALJ Decision at 3-7 (ALJ’s numbering and bolding removed).  We will discuss the ALJ’s rationale for the above findings and conclusions in more detail below, as pertinent to Petitioner’s arguments before the Board.

The ALJ affirmed the I.G.’s determination to exclude Petitioner for five years from participating in Medicare, Medicaid, and all federal health care programs.  ALJ Decision at 7.

Standard of Review

The standard of review on a disputed issue of law is whether the ALJ Decision is “erroneous.”  42 C.F.R. § 1005.21(h).  The standard of review on a disputed issue of fact is whether the ALJ Decision is “supported by substantial evidence on the whole record.”  Id.  The term “substantial evidence” means “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”  Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).  “Under the substantial evidence standard, the reviewer must examine the record as a whole and take into account whatever in the record fairly detracts from the weight of the evidence relied on in the decision below.”  James O. Boothe, DAB No. 2530, at 2-3 (2013) (citing Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951)).

Analysis

On appeal, Petitioner does not dispute the ALJ’s findings and conclusions that:  (1) Petitioner was convicted under federal or state law of a criminal offense that occurred after August 21, 1996; (2) Petitioner’s offense of conviction was committed in connection with the delivery of a healthcare item or service; or (3) Prior determinations by state agencies have no effect on the I.G.’s obligation under the Act to impose exclusion.  ALJ Decision at 3, 5-7; see also Petitioner’s Brief in Support of Notice of Appeal (P. Br.)  Accordingly, we do not disturb these conclusions, or the findings of fact made by the ALJ which support these conclusions.  See 42 C.F.R. § 1005.21(e) (stating, in relevant part, that the Board “will not consider” any issue not raised by a party in its brief).  We note that while Petitioner does not dispute the duration of the exclusion, Petitioner does dispute that the offense of conviction was related to fraud, and consequently disputes that there was a basis for exclusion. 

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Petitioner raises two interconnected issues on appeal.  P. Br. at 5.  Petitioner argues that the ALJ’s interpretation of the “related to” element of section 1128(a)(3) of the Act, thereby mandating a five-year exclusion from federal health care programs, was unsupported by the ALJ’s cited authorities and legally erroneous.  Id. at 5, 10, 13.  Additionally, Petitioner asserts the ALJ’s finding that Petitioner’s conviction was “related to” fraud and “other financial misconduct” was “not supported by substantial evidence” and therefore legally and factually erroneous.  Id. at 5, 8, 10, 13.  Therefore, Petitioner contends the ALJ Decision affirming Petitioner’s five-year exclusion was erroneous, not supported by substantial evidence on the record, and should be reversed.  Id. at 1, 10, 13-14.

As we explain below, we reject Petitioner’s arguments and conclude that the ALJ’s determination that the I.G. was authorized to exclude Petitioner under section 1128(a)(3) of the Act for a period of five years is supported by substantial evidence and free of legal error.  Contrary to Petitioner’s position, we find no legal error in the ALJ’s interpretation and use of the “related to” language of section 1128(a)(3) of the Act, and that the ALJ’s finding that Petitioner’s felony conviction “relates to” fraud and “other financial misconduct” is adequately supported by relevant case law and supported by substantial evidence.  See ALJ Decision at 4-5; 42 C.F.R. § 1005.21(h); P. Br. at 5-13. 

1. The ALJ’s interpretation of the “relating to” element of section 1128(a)(3) of the Act and the ALJ’s conclusion that Petitioner’s offense of conviction relates to fraud and “other financial misconduct” is not legally erroneous.

Section 1128(a)(3) of the Act requires the Secretary to exclude from participation in any federal health care program (as defined in section 1128B(f) of the Act) an individual who “has been convicted for an offense . . . under Federal or State law, in connection with the delivery of a health care item or service . . . of a criminal offense consisting of a felony relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.”  Act § 1128(a)(3) (emphasis added).

Petitioner puts forth a narrow and literal reading of the “relating to” element of section 1128(a)(3) of the Act by taking the position that, within 21 U.S.C. § 843(a)(3), misrepresentation and fraud are “different, separate, and distinct acts and means of obtaining controlled substances,” and, as such the ALJ’s conclusion that Petitioner was convicted of a felony “relating to” fraud within the meaning of 1128(a)(3) of the Act was erroneous.  P. Br. at 5-6, 8, 10, 13.  Additionally, Petitioner states that, instead of simply writing “fraud” in 21 U.S.C. § 843(a)(3), Congress chose to enumerate five separate acts, “all of which contain different elements, but only one of which – fraud – appears as a mandatory exclusion under Section 1128(a)(3) of the Act.”  Id. at 6 (citing Duncan v. Walker, 533 U.S. 167, 174 (2001)).

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We agree with the ALJ that “Petitioner’s understanding of the scope of the exclusion authority provided by the Act is . . . erroneous.”  ALJ Decision at 5.  As the ALJ found, the Board has observed that “the plain language of section 1128(a)(3) encompasses felonies ‘relating to’ fraud and other types of listed offenses, not just to felonies that constitute fraud or one of the other listed offenses.”  Id. (quoting Charice D. Curtis, DAB No. 2430, at 4 (2011)).  “Furthermore, by including ‘other financial misconduct’ as well as ‘fraud, theft, embezzlement, [and] breach of fiduciary responsibility,’ Congress clearly intended to broadly encompass financially-related offenses.”  Curtis at 4 (alteration in original); see also ALJ Decision at 5; Breton Lee Morgan, M.D., DAB No. 2264, at 5-6 (2009) (finding that Petitioner’s “narrow interpretation of section 1128(a)(3)” that would have, “in effect, change[d] the commonly accepted meaning of ‘fraud’ to be limited only to those criminal offenses where the individual has a corrupt motive to effectuate a substantial pecuniary gain,” was “not compatible with the structure and context of the statutory language as a whole” and “not consistent with the statutory purposes”), appeal dismissed, No. 3:09–1059, 2010 WL 3702608 (S.D.W. Va. Sept. 15, 2010) (holding that “the Final Decision of the Secretary is supported by substantial evidence and is in accordance with the appropriate legal standards”), aff’d, 694 F.3d 535 (4th Cir. 2012).

We also agree with the ALJ that Friedman v. Sebelius, 686 F.3d 813 (D.C. Cir. 2012) (Friedman) and Quayum v. United States Dep’t of Health & Human Servs., 34 F.Supp.2d 141 (E.D.N.Y. 1998) are instructive to this case.  See ALJ Decision at 4.  In Friedman, the D.C. Circuit examined the question of whether the phrase “misdemeanor relating to fraud” in section 1128(b)(1)(A) of the Act “refers to a generic criminal offense or to the facts underlying the particular defendant’s conviction.”  686 F.3d at 818-19, rev’g on other grounds⁷ 755 F.Supp.2d 98 (D.D.C. 2010), aff’g Paul D. Goldenheim, M.D., et al., DAB No. 2268 (2009).⁸  The D.C. Circuit, 686 F.3d at 820, cited Morales v. Trans World Airlines, Inc. as stating that the “ordinary meaning of [relating to] is a broad one – ‘to stand in some relation; to have bearing or concern; to pertain; refer; to bring into association with or connection with’ . . . .”  Morales v. Trans World Airlines, Inc., 504 U.S. 374, 383 (1992) (quoting Black’s Law Dictionary 1158 (5th ed. 1979)).  The D.C.

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Circuit further described the phrase “relating to” as “deliberately expansive” and a phrase that is not subject to a “crabbed and formalistic interpretation.”  686 F.3d at 820 (internal quotation marks and citations omitted).  Similarly, here the ALJ also relied on Quayum where the Eastern District of New York held, “[t]he term ‘related to’ simply means that there must be a nexus or common-sense connection.”  ALJ Decision at 4 (citing Quayum, 34 F.Supp.2d at 143, dismissing appeal from DAB CR408 (1995)⁹).

Petitioner “suggests” State v. West,632 S.W.3d 908 (Tex. Crim. App. 2021) instructs that “where a statute references a list of actions, a plea of guilty to that statute does not mean defendant is pleading guilty to all acts listed.”  P. Br. at 6-7, 13.¹⁰  Petitioner further contends West held that while all acts listed in the criminal statute at issue were equally criminal, each act “describe[d] completely different conduct.”  Id. at 7 (quoting West at 913).  West is wholly inapplicable to this case.  As we explained above, Petitioner’s emphasis on how to read different acts within a criminal statute is misplaced in the context of understanding the scope of the section 1128 exclusion authority.  The issue in West was “whether the statute of limitations [wa]s tolled by the pendency of an initial indictment charging a completely different drug than the subsequent indictment and charging not only possession, but also attempting to possess that drug by all of the possible statutory manners and means.”  West at 910.  Thus, West does not have any precedential weight and is not a binding authority for the Board.

Finally, the legislative intent behind section 1128 of the Act supports a broad application of section 1128(a)(3) of the Act.  Congress enacted the Health Insurance Portability and Accountability Act of 1996, of which section 1128(a)(3) of the Act is a part, “to combat waste, fraud, and abuse in health insurance and health care delivery.”  Harkonen v. Sebelius, No. C 13–0071 PJH, 2013 WL 5734918, at *9 (N.D. Cal. Oct. 22, 2013) (quoting Health Insurance Portability and Accountability Act, Pub. L. No. 104-191, 110 Stat. 1936, 1936 (1996)), aff’g W. Scott Harkonen, M.D., DAB No. 2485, at 10 (2012) (stating that “[w]hen Congress added section 1128(a)(3) in 1996 it again focused upon the desired deterrent effect:  greater deterrence was needed to protect the Medicare program from providers who have been convicted of health care fraud felonies . . . .”) (internal quotations and citations omitted).  The legislative history regarding the statute as originally enacted indicates that it was “intended to protect federal programs from untrustworthy individuals and to ‘provide a clear and strong deterrent against the commission of criminal acts.’”  Harkonen v. Sebelius, 2013 WL 5734918, at *9 (quoting S. Rep. No. 100-109, at 5 (1987), as reprinted in 1987 U.S.C.C.A.N. 682, 686); see also Morgan at 9 (stating that the Board has previously found that the “exclusion remedy serves twin congressional purposes:  the protection of federal funds and program beneficiaries from untrustworthy individuals and the deterrence of health care fraud”

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(internal quotations and citations omitted)).  Therefore, “the legislative history [of section 1128(a)(3) of the Act] reveals that Congress intended the statute to be broadly applied to protect the program from individuals who are not trustworthy.”  Morgan at 9 (citing Kenneth M. Behr, DAB No. 1997, at 7 (2005) (addressing Congress’s “intent that the mandatory exclusion authority be used broadly to protect the integrity of covered programs”)); Napoleon S. Maminta, M.D., DAB No. 1135 (1990) (discussing the legislative history of section 1128(a) and its support for broad coverage)).

Furthermore, the ALJ’s conclusion that Petitioner’s offense of conviction relates to fraud and “other financial misconduct” is not legally erroneous.  We agree with the ALJ that “Petitioner’s extraordinarily crabbed reading of both [21 U.S.C. § 843(a)(3)] and the exclusion statute [is] without merit.”  ALJ Decision at 4; see also Friedman, 686 F.3d at 820.  Petitioner has not cited to any authority to show Petitioner’s actions that constitute misrepresentation cannot be a felony “relating to” fraud under section 1128(a)(3) of the Act.  See generally P. Br.  As explained above, cases interpreting the “relating to” element of section 1128(b)(1) of the Act are directly relevant to interpreting the “relating to” element of section 1128(a)(3).  The Board has held “[t]hat [where] Petitioners were not specifically convicted of fraud . . . does not mean that the offense did not relate to fraud within the meaning of section 1128(b)(1), authorizing the I.G. to exclude them.”  Goldenheim, DAB No. 2268, at 10.  The Board further explained that “[b]y its terms section 1128(b)(1) does not restrict exclusions to only offenses constituting or consisting of fraud but requires merely that the offense at issue be one ‘relating to’ fraud.”  Id.  The Board’s approach in Goldenheim was affirmed on appeal by Friedman, in which the D.C. Circuit determined, based on the text, structure, and purpose of section 1128(b)(1) of the Act, that a circumstance-specific approach, in which the statute authorizes exclusion of an individual whose conduct underlying a conviction was factually related to fraud, was proper when evaluating the “misdemeanor relating to fraud” element of section 1128(b)(1).  686 F.3d at 818-20, 824. 

We disagree with Petitioner’s stances on Curtis, Friedman and Quayum.  Petitioner largely objects to the ALJ’s use of these cases due to asserted factual distinctions, which will be addressed separately below.  Moreover, as we explained above, the Board and the ALJ solely rely on Curtis, Quayum, and Friedman to explain that section 1128(a)(3) and, in particular, the “relating to” element of section 1128(a)(3), is broadly interpreted and applied.  We find the Board’s guidance in Curtis regarding the breadth of the phrase “relating to” and its associated section 1128(a)(3) language to be broadly applicable, despite the fact that the “relating to” element of section 1128(a)(3) was not the contested issue in Curtis.  See Curtis at 4-6.  Additionally, for the reasons we detailed above, we find Friedman and other cases involving section 1128(b)(1)(A) and (B) of the Act that interpret or apply the phrase “relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct” to be relevant to the issues presented in this case. 

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The legal principles of Curtis, Quayum, and Friedman are both instructive to this case and adequately support the ALJ Decision that section 1128(a)(3) of the Act does not require that the offense of conviction be explicitly listed to merit exclusion, and that Petitioner’s offense of conviction is related to fraud.

Petitioner additionally argues that the ALJ’s conclusion that Petitioner’s conviction constitutes “other financial misconduct” is erroneous because 21 U.S.C. § 843(a)(3) is not an offense that is appropriately categorized as “other financial misconduct” within the meaning of section 1128(a)(3) of the Act.  P. Br. at 6, 8, 10, 13 (citing ALJ Decision at 5).  In support of this argument, Petitioner asserts that, to the contrary, crimes that fall within “other financial misconduct” “typically involve fraudulent acts involving credit cards or other ‘access devices,’” such as the violations of 18 U.S.C. § 1029 involved in Curtis, DAB No. 2430.  Id. at 6, 8 (citing 18 U.S.C. § 1029; Curtis at 2).  Petitioner states that “[t]he misrepresentation made in violation of 21 U.S.C. § 843(a)(3) bears no connection to access devices, credit cards, debit instruments, or ‘other financial misconduct.’”  Id. at 8 (citing P. Ex. 1, at 7-8).  Petitioner emphasizes that 18 U.S.C. § 1029 was enacted for the purpose of “stemming the tide of criminal behavior resulting from the growing problem in counterfeit credit cards and unauthorized use of account numbers or access codes to banking system accounts called debit instruments.”  Id. (citing United States v. Humes, 312 F.Supp.2d 893 (E.D. Mich. 2004)).

Petitioner’s argument is incorrect.  In Morgan, DAB No. 2264, a decision in which the Board held that a petitioner’s felony conviction of obtaining controlled substances by fraud under 21 U.S.C. § 843(a)(3) related to fraud within the meaning of section 1128(a)(3), the Board found that the petitioner’s conviction “involved a financial component or pecuniary gain.”  Morgan at 6-13.  Therefore, an offense under 21 U.S.C. § 843(a)(3) may be appropriately categorized as “other financial misconduct” within the meaning of section 1128(a)(3) of the Act.

Accordingly, the ALJ’s conclusion that “Petitioner’s offense of conviction relates to fraud and ‘other financial misconduct’ within the meaning of section 1128(a)(3) of the Act” is not legally erroneous.  See ALJ Decision at 5.

2. The ALJ’s conclusion that Petitioner’s offense of conviction relates to fraud and “other financial misconduct” within the meaning of section 1128(a)(3) of the Act is supported by substantial evidence.

Petitioner argues that the ALJ erroneously relied on Curtis, Quayum, and Friedman, and, as a result, the ALJ’s finding that Petitioner’s conviction relates to fraud is not supported by substantial evidence.  P. Br. at 10-11, 13.  Contrary to Petitioner’s stances, the specific factual distinctions between Curtis, Friedman, Quayum and this case do not render them inapplicable. 

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Petitioner contends that Curtis is inapplicable to this case because the underlying conviction in Curtis was plainly fraud and Curtis is not relevant to the issue under section 1128(a)(3) of the Act of when a conviction relates to, but is not, fraud.  P. Br. at 11.  Instead, Petitioner asserts that the issue in Curtis “was not whether the offense giving rise to the petitioner’s exclusion was felony fraud . . ., but rather whether it occurred in connection to the delivery of healthcare.  Id. (citing Curtis at 4).  Petitioner adds that the charges brought against Curtis “did not consist of a litany of enumerated and distinct acts but only required the ‘intent to defraud.’”  Id. (citing Curtis at 2; 18 U.S.C. § 1029(a)(2)-(3)).  As we addressed earlier, Petitioner’s focus on proving that misrepresentation and fraud are different, separate, and distinct acts is crabbed, formalistic, and misplaced.  We agree with the ALJ that “Petitioner’s offense of conviction need not be explicitly listed in section 1128(a)(3) of the Act to merit exclusion.”  ALJ Decision at 5.  Instead, “[i]t need only relate to the offenses identified therein.”  Id. (emphasis added).

Petitioner asserts the ALJ’s reliance on Friedman and Quayum was also erroneous because the underlying facts of those cases bear no relation to Petitioner’s case.  P. Br. at 10, 12 (citing Friedman, 686 F.3d at 824; Quayum, 34 F.Supp.2d at 143).  Petitioner emphasizes that the Friedman petitioners were senior level officers who had direct involvement in a fraudulent marketing scheme.  Id. at 12 (citing Friedman 686 F.3d at 816).  Petitioner contends the Friedman petitioners were excluded because their convictions were “predicated upon the company they led having pleaded guilty to fraudulently misbranding a drug they admitted to having responsibility and authority to either prevent in the first instance or to promptly correct that fraud.”  Id. (quoting Friedman, 686 F.3d at 824 (internal quotation marks omitted)).¹¹  Petitioner contends that Friedman is not analogous to the facts of this case because Petitioner was not in a position of leadership at Dayton Pharmacy where Petitioner could exert control or influence over a supplier, and, as Petitioner was not aware of the contents of the packet to which Petitioner’s signature page was attached, Petitioner was not in a position to prevent or correct the misrepresentations made in the packet.  Id. at 12-13 (citing P. Ex. 1, at 7-8; P. Ex. 5; P. Ex. 4).

We disagree with Petitioner’s stances on Curtis, Friedman and Quayum due to asserted factual distinctions.  However, as we explained above, neither the Board nor the ALJ relies on Curtis, Friedman, or Quayum to make fact-specific comparisons or to provide examples of similar applications of facts to the authorities at issue in this case.  Additionally, for the reasons we detailed above, we find Friedman, Quayum and other cases involving § 1128(b)(1)(A) and (B) of the Act that interpret or apply the phrase “relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct” to be relevant to the issues presented in this case.  Thus, contrary

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to Petitioner’s stances, the specific factual distinctions between Curtis and Friedman and this case do not render them inapplicable.  As we described above, the legal principles of Curtis and Friedman are both instructive to this case and adequately support the ALJ Decision.

Having determined that the ALJ correctly interpreted section 1128(a)(3) of the Act, we turn now to Petitioner’s assertion that the ALJ’s statement that Petitioner’s “effort to distinguish between misrepresentation and fraud in the context of assessing relatedness for purposes of exclusion is irrelevant,” was erroneous, and contention that this distinction is exactly where the nexus between Petitioner’s conviction and convictions related to fraud breaks down.  P. Br. at 6 (quoting ALJ Decision at 4-5).

Petitioner emphasizes the statement in the Plea Agreement that Petitioner “assisted in facilitating Dayton Pharmacy’s continued receipt of controlled substances from Supplier B by misrepresenting material information regarding the operations of Dayton Pharmacy.”  P. Br. at 7 (quoting P. Ex. 1, at 8).  Petitioner states that neither “fraud” nor engaging in “fraudulent acts” is mentioned with respect to Petitioner’s alleged conduct.  Id. (citing P. Ex. 1, at 8).  Petitioner contends that fraud is only mentioned in the Plea Agreement when it “incorporates the language of 21 U.S.C. § 843(a)(3) in whole and quotes that [Petitioner] engaged in acts of ‘misrepresentation, fraud, forgery, deception, and/or subterfuge.’”  Id. (quoting P. Ex. 1, at 8).  Petitioner asserts that, although 21 U.S.C. § 843(a)(3) includes acquiring or possessing a controlled substance by misrepresentation, fraud, or subterfuge, “it is clear that [Petitioner] was only accused of engaging in misrepresentation by signing the [Supplier B] Questionnaire that indicated Dayton Pharmacy was never refused controlled substances.”  Id.; see also id. at 9 (citing P. Ex. 1, at 7-8) (asserting the ALJ failed to consider that the Plea Agreement Statement of Facts states that Petitioner’s conduct amounted to a misrepresentation of facts, but does not claim that Petitioner engaged in fraud).  Thus, Petitioner contends that Petitioner’s conviction was not for fraud.  Id. at 8.

Contrary to Petitioner’s insistence otherwise, the Plea Agreement uses terms other than “misrepresentation” to describe the actions that led to Petitioner’s felony conviction.  As Petitioner acknowledges, the Plea Agreement broadly states:  “Specifically as to Count 1 of the Superseding Information, [Petitioner] assisted in facilitating Dayton Pharmacy’s continued receipt of controlled substances from Supplier B by misrepresentation, fraud, forgery, deception, and/or subterfuge by misrepresenting material information to Supplier B to induce the wholesale supplier into continuing to dispense controlled substances.”  P. Ex. 1, at 8.  We find this language in the Plea Agreement to be significant because it links Petitioner’s actions to the felony charge to which Petitioner pleaded guilty.  Additionally, the section of the Plea Agreement titled “Offense of Conviction” unequivocally states that “[Petitioner] agrees to plead guilty to Count 1 of the Superseding Information, which charges him with acquiring or obtaining controlled substances by fraud in violation of 21

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U.S.C. § 843[(a)(3)],” and that “[Petitioner] admits that he is, in fact, guilty of this offense.”  P. Ex. 1, at 1 (¶ 1) (emphasis added).¹²

Petitioner contends that Petitioner’s actions that led to the conviction were not knowing or intentional and, as such, they could not be related to fraud.  See P. Br. at 9.  Specifically, Petitioner argues that the ALJ’s statement that Petitioner is only “now claim[ing]” that Petitioner’s misrepresentations were less than knowing or intentional is not supported by substantial evidence on the whole record.  Id. (quoting ALJ Decision at 4).  Petitioner asserts the ALJ “ignore[d] that the Plea Agreement’s Statement of Facts supports the conclusion that [Petitioner]’s conviction d[id] not rise to the level of, nor [wa]s it related to, fraud.”  Id. (citing P. Ex. 1, at 7-8).

In furtherance of this contention, Petitioner cites the contents of Petitioner’s Self-Report Form and Petitioner’s Affidavit as “offer[ing] additional support that [Petitioner’s] actions consisted only of one signature on a single page.”  P. Br. at 9 (citing P. Ex. 6; P. Ex. 9).  Petitioner elaborates by asserting that, “[u]nbeknownst to [Petitioner], [Petitioner’s] signature was thereafter attached to a packet reaffirming misstatements made by one or more of the Dayton Pharmacy owners.”  Id. (citing P. Ex. 6; P. Ex. 9).  Therefore, Petitioner claims that “the totality of the record and evidence demonstrates that [Petitioner]’s involvement was bereft of the intent required for and did not amount or relate to fraud.”  Id.

Additionally, Petitioner contends that the ALJ’s statement about Petitioner making collateral attacks on Petitioner’s underlying conviction is a “misunderstanding of [Petitioner]’s argument.”  P. Br. at 9 (citing ALJ Decision at 4).  Petitioner claims to have never contested the validity of the Plea Agreement, but to have instead only argued that the Plea Agreement Statement of Facts “describes [Petitioner’s] conduct as a ‘misrepresentation’ and explains why the I.G.’s heavy reliance on only ‘the first paragraph of [Petitioner’s] Plea Agreement’ ignores the important distinction between the text of 21 U.S.C. § 843(a)(3) and [Petitioner]’s actual conviction.”  Id. (citing ALJ Decision at 4). 

We disagree with Petitioner and find that substantial evidence supports the ALJ’s assessment that Petitioner “now claims” Petitioner’s actions were less than knowing or intentional.  ALJ Decision at 4 (citing P. ALJ Br. at 7).  As the ALJ emphasized, Petitioner pleaded guilty to “knowingly or intentionally acquir[ing] controlled substances by misrepresentation, fraud, forgery, [deception], or subterfuge.”  I.G. Ex. 3 (emphasis

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added); P. Ex. 1, at 1, 8; I.G. Ex. 6; ALJ Decision at 4.  In doing so, Petitioner agreed that, “[d]uring a site inspection with Supplier B in August of 2014, [Petitioner] reaffirmed the false declaration that Dayton Pharmacy had not been blocked by any prior distributors.”  P. Ex. 1, at 8 (emphasis added).  Petitioner further agreed that Petitioner “assisted in facilitating Dayton Pharmacy’s continued receipt of controlled substances from Supplier B . . . by misrepresenting material information to Supplier B to induce the wholesale supplier into continuing to dispense controlled substances.”  Id. (emphasis added).  In the Sentencing Memorandum, Petitioner admitted to having “material, involvement in the conduct that led to his conviction.”  P. Ex. 4, at 1.

The record also indicates that subsequent to pleading guilty, Petitioner made several additional statements about what Petitioner knew at the time of the actions that led to Petitioner’s felony conviction.  These additional statements, like Petitioner’s assertions on appeal, are largely inconsistent with the information Petitioner agreed to in the Plea Agreement and provided in the Sentencing Memorandum as well as inconsistent with each other.  

In the Self-Report Form filed six months after Petitioner’s guilty plea was accepted, Petitioner, consistent with the Plea Agreement, acknowledged that, “[i]n May of 2012, Dayton Pharmacy’s pharmaceutical distributor blocked any further distributions of controlled substances to Dayton Pharmacy,” but that “[t]he reasons the distributor blocked shipment w[ere] not disclosed to me.”  P. Ex. 6, at 2.  However, Petitioner described Petitioner’s actions as merely “fail[ing] to sufficiently review the information on the [Q]uestionnaire and sign[ing] . . . the . . . [Q]uestionnaire.”  Id. at 3.

In Petitioner’s Affidavit filed two years after Petitioner’s guilty plea was accepted, Petitioner contradictorily represented that, “[a]s of August 27, 2014 [Questionnaire date],” “I had no knowledge that Dayton Pharmacy had ever been restricted or subject to a cessation of purchases by any wholesale distributor or manufacturer.”  P. Ex. 9, ¶ 8; see also id. ¶ 18.  Additionally, in further contrast to the Plea Agreement, Petitioner represented that a Supplier B representative presented Petitioner with a “form consist[ing] of one page with a singular question and signature block,” and that “[t]he singular question was a breakdown of the payment methods used by our patients to pay for their medication” and, “[b]elieving the sole question to be an accurate breakdown of our clients’ payment methods, and further believing that my signature was solely attesting to this payment breakdown statement, I signed my name on the statement.”  Id. ¶¶ 10-11; see also id. ¶¶ 18-19.  Lastly, Petitioner stated, “[a]t no time prior to speaking with law enforcement was I presented with any other pages or forms related to my signed statement nor did I have any knowledge of the existence of additional pages related to my signed statement.”  Id. ¶ 12; see also id. ¶¶ 18-19.

Thus, Petitioner’s Affidavit provided to the ALJ contradicts Petitioner’s guilty plea, the Plea Agreement, and the Self-Report Form regarding the knowledge Petitioner had about

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Dayton Pharmacy’s relationship with Supplier A at the time Petitioner committed the crime that led to Petitioner’s exclusion.  Petitioner’s Self-Report Form and Petitioner’s Affidavit contradict Petitioner’s guilty plea and the Plea Agreement regarding knowledge Petitioner had when taking the actions that led to Petitioner’s felony conviction. 

Accordingly, despite Petitioner’s contentions to the contrary, reliance on Petitioner’s Affidavit and Petitioner’s Self-Report Form constitutes an impermissible collateral attack on the criminal conviction on which Petitioner’s exclusion was based.  42 C.F.R. § 1001.2007(d) (“When the exclusion is based on the existence of a criminal conviction . . . imposing liability by Federal, State or local court . . . the basis for the underlying conviction . . . is not reviewable and the individual or entity may not collaterally attack it either on substantive or procedural grounds in th[e] appeal.”); see also Lena Lasher, DAB No. 2800, at 2 (2017) (affirming an ALJ’s holding “that [a petitioner’s] attempts to show that she was wrongly convicted [we]re collateral attacks on the validity of her criminal conviction on which the exclusion was based and are expressly forbidden by regulation”), aff’d, 369 F.Supp.3d 243 (D.D.C. 2019), aff’d, Lasher v. United States, No. 19-5114, 2020 WL 9256389 (D.C. Cir. Nov. 12, 2020); ALJ Decision at 4.  Therefore, in issuing this decision, we do not accord any weight to the portions of Petitioner’s Affidavit or Petitioner’s Self-Report Form identified as being contradictory, or Petitioner’s arguments that relied on those contradictory portions.

Finally, Petitioner states that the ALJ erroneously overlooked Amie VanCamp, DAB CR5511 (2020), and claims that VanCamp is “a distinguishable example of an offense under 21 U.S.C. § 843(a)(3) for which exclusion was appropriate.”  P. Br. at 9.  We disagree and find that VanCamp does not render the ALJ’s conclusion that the I.G. adequately supported Petitioner’s mandatory exclusion erroneous.  Petitioner argues that Petitioner’s “conduct was described as a ‘misrepresentation,’” and Petitioner “was unaware of the existence of other pages containing false information when [Petitioner] signed the single piece of paper [Supplier B]’s representative provided.”  P. Br. at 9-10 (citing P. Ex. 1, at 7-8).  Petitioner contends that, in contrast, the VanCamp petitioner stipulated to acting with fraudulent intent when the VanCamp petitioner falsified patient records and diverted patient drugs for personal use.  Id. (citing VanCamp, DAB CR5511, at 4).  Petitioner asserts that, because Petitioner did not make a similar stipulation and the federal government did not require Petitioner to do so, id. at 10 (citing P. Ex. 1), the ALJ’s conclusion that the I.G. adequately supported Petitioner’s mandatory exclusion by a preponderance of the evidence was erroneous.  Id.

ALJ decisions, while possibly instructive in some situations, are not precedential or binding on the Board.  Morgan, DAB No. 2264, at 11; Summit S. Shah, M.D., DAB No. 2836, at 6 (2017).  Additionally, the mere fact that the VanCamp petitioner stipulated to acting with fraudulent intent does not mean that an individual cannot be excluded under section 1128(a)(3) of the Act without the presence of stipulated fraudulent intent, where the underlying actions are related to fraud and other financial misconduct.  Accordingly,

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VanCamp does not render erroneous the ALJ’s conclusion that the I.G. adequately supported Petitioner’s mandatory exclusion.

Petitioner’s arguments that Petitioner’s “conduct was described as a ‘misrepresentation,’” and Petitioner’s claim regarding the importance of VanCamp largely depend upon arguments Petitioner makes in challenging the felony conviction on which Petitioner’s exclusion was based, and that constitutes an impermissible collateral attack on the conviction.  As we demonstrate in this decision, Petitioner’s felony conviction merits exclusion under section 1128(a)(3) of the Act.

Applying the circumstance-specific approach illustrated in Friedman, we, like the ALJ, “have no difficulty concluding Petitioner’s offense of conviction relates to fraud . . . within the meaning of section 1128(a)(3) of the Act.”  ALJ Decision at 5.  In “knowingly or intentionally” committing the felony at issue in this case, Petitioner, “[d]uring a site inspection with Supplier B in August of 2014,” “reaffirmed the false declaration that Dayton Pharmacy had not been blocked by any prior distributors.”  I.G. Ex. 3; P. Ex. 1, at 8; I.G. Ex. 6; P. Ex. 7, at 2.  Petitioner further agreed that Petitioner “assisted in facilitating Dayton Pharmacy’s continued receipt of controlled substances from Supplier B . . . by misrepresenting material information to Supplier B to induce the wholesale supplier into continuing to dispense controlled substances.”  P. Ex. 1, at 8.  Petitioner had material involvement in this conduct.  P. Ex. 4, at 2.

Likewise, Petitioner’s offense of conviction “constitute[d] ‘other financial misconduct’ within the meaning of section 1128(a)(3).”  See ALJ Decision at 5.  Petitioner asserts Petitioner’s conviction was not for financial misconduct because the conviction related to a misrepresentation made on the Questionnaire to obtain controlled substances.  P. Br. at 8 (citing P. Ex. 1, at 7-8; P. Ex. 4).  Nevertheless, as the primary pharmacist employed at Dayton Pharmacy, facilitating Dayton Pharmacy’s continued receipt of controlled substances from Supplier B had a financial benefit to Petitioner.  See Morgan, DAB No. 2264, at 1-2, 12-13 (finding, in a decision involving a petitioner who was appealing an exclusion under section 1128(a)(3) of the Act, that because the petitioner “derived some unquantifiable measure of pecuniary value,” the petitioner “received a financial benefit from his misconduct”).  This is demonstrated by the fact that Dr. M.B. owned the building in which Dayton Pharmacy was located and owned and operated a medical practice in the same building, and Dr. M.B.’s prescriptions “comprised at least approximately 75% of Dayton Pharmacy’s business.”  P. Ex. 1, at 7.  Additionally, Dayton Pharmacy clearly needed to maintain a relationship with a supplier of controlled substances to stay in business, which was the source of Petitioner’s employment and income.

Accordingly, contrary to Petitioner’s position, the ALJ’s conclusion that “Petitioner’s offense of conviction relates to fraud and ‘other financial misconduct’ within the meaning of section 1128(a)(3) of the Act” is supported by substantial evidence.  See ALJ Decision

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at 5.  As the ALJ found, “Petitioner’s criminal conduct, however it might be described at common law, falls well within the meaning of fraud and financial misconduct.”  Id.; see also Brenda Mills, M.D., DAB No. 2061, at 1, 4-5 (2007) (finding, in a case involving an 1128(a)(3) exclusion, that if the Board were to consider the issue of whether there was a basis for the petitioner’s exclusion, the Board would have found that “the offense for which [the petitioner] was convicted – a false statement that an employee of hers was a qualified physical therapist on which statement the Department of Labor relied to pay claims for physical therapy services provided by that employee – involved fraud or other financial misconduct”), appeal dismissed, Mills v. Crowe, No. 4:08CV1850, 2010 WL 624011 (E.D. Mo. Feb. 18, 2010).

Conclusion

For the reasons stated, we affirm the ALJ’s conclusions that a basis exists to exclude Petitioner from participation in federal healthcare programs under section 1128(a)(3) of the Act, and that a five-year exclusion is not unreasonable.

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Endnotes

¹ We apply the regulations that were in effect when the I.G. issued the determination to exclude Petitioner. See Ishtiaq A. Malik, M.D., DAB No. 2962, at 1 n.2 (2019) (citation omitted), aff’d, No. 1:20-cv-00091 (RDA/TCB), 2022 WL 1785240 (E.D. Va. June 1, 2022), and appeal filed, No. 22-1706 (4th Cir. July 5, 2022).

² Background information is drawn from the ALJ Decision and the record before the ALJ and is not intended to substitute for the ALJ’s findings.  The facts underlying Petitioner’s criminal offense are largely drawn from the facts set forth in the Plea Agreement and its “Statement of Facts” set forth in Attachment A and incorporated into the Plea Agreement by reference (collectively, Plea Agreement (P. Ex. 1)).  P. Ex. 1, at 2 (¶ 6).  Petitioner acknowledged, accepted, and voluntarily agreed to the Plea Agreement, and represented that Petitioner “d[id] not wish to change any part of it.”  Id. at 4 (¶ 12), 6.  Petitioner “stipulate[d] and agree[d] that if this case proceeded to trial, the United States would prove the facts set forth [in the Statement of Facts] beyond a reasonable doubt,” and that “these are not all of the facts that the United States would prove if this case had proceeded to trial.”  Id. at 7.  Petitioner acknowledged that the Statement of Facts was “true and correct.”  Id. at 8.

³ Dr. M.B. was indicted by the same grand jury on six counts of unlawful distribution and dispensing of controlled substances in violation of 21 U.S.C. §§ 841(a)(1), 841(b)(1)(C), and 18 U.S.C. § 2, and one count of maintenance of premises for unlawful distribution or dispensing in violation of 21 U.S.C. §§ 856(a)(1), 856(a)(2), and 18 U.S.C. § 2.  I.G. Ex. 2, at 1, 7-9 (¶¶ 43-45).

⁴ We note that the Superseding Information mistakenly lists the criminal statute Petitioner was charged with violating as “21 U.S.C. § 843(3),” instead of “21 U.S.C. § 843(a)(3)” and omits the word “deception.”  Compare I.G. Ex. 3, with 21 U.S.C. § 843.  However, both the Plea Agreement, P. Ex. 1, at 1, and the attached Statement of Facts, id. at 8, include the word “deception.”

⁵ We note that the Plea Agreement mistakenly lists the criminal statute Petitioner was charged with violating as “21 U.S.C. § 843(a)(1)(3), instead of “21 U.S.C. § 843(a)(3).”  Compare P. Ex. 1, at 1 (¶ 1), with 21 U.S.C. § 843.

⁶ Before the Board, Petitioner concedes Petitioner’s criminal conviction was for a felony.  P. Br. at 4.

⁷ The D.C. Circuit in Friedman reversed the District Court’s decision on the basis that the I.G.’s decision to exclude the appellants was arbitrary and capricious with respect to the length of the appellants’ exclusion and remanded it to the District Court with instructions to remand it to the agency for further consideration consistent with this opinion.  686 F.3d at 816, 828.

⁸   Friedman examined the phrase “relating to” within the context of section 1128(b)(1)(A) of the Act, which allows for permissive exclusions for convictions relating to fraud.  686 F.3d at 818-21, 824; Act § 1128(b)(1).  Sections 1128(a)(3), 1128(b)(1)(A), and 1128(b)(1)(B) all involve exclusions from participation in all federal health care programs for criminal convictions “relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.”  Compare Act § 1128(a)(3), with Act § 1128(b)(1)(A), (B).  Additionally, the presumption is that “identical words used in different parts of the same act are intended to have the same meaning.”  Adena Reg’l Med. Ctr. v. Leavitt, 527 F.3d 176, 180 (D.C. Cir. 2008) (quoting Atlantic Cleaners & Dyers, Inc. v. United States, 286 U.S. 427, 433 (1932)).  Accordingly, we find Friedman and other cases involving §§ 1128(b)(1)(A) and (B) that interpret or apply the phrase “relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct” to be relevant to the issues presented in this case and we rely on them in this decision.

⁹ The Board declined to review the ALJ’s decision in Quayum.  34 F.Supp.2d at 143.

¹⁰ Although Petitioner cites to West for this proposition, the West decision does not contain this language.    It is merely Petitioner’s interpretation of the language in West.

¹¹ Petitioner’s quoting of Friedman is not entirely correct.  The passage of Friedman cited by Petitioner states:  “Their convictions for misdemeanor misbranding were predicated upon the company they led having pleaded guilty to fraudulently misbranding a drug and they admitted having ‘responsibility and authority either to prevent in the first instance or to promptly correct’ that fraud.”  686 F.3d at 824 (internal quotation marks omitted).

¹² As we noted above, Petitioner acknowledged, accepted, and voluntarily agreed to the Plea Agreement, and represented that Petitioner “d[id] not wish to change any part of it.”  P. Ex. 1, at 4 (¶ 12), 6.  Petitioner “stipulate[d] and agree[d] that if this case proceeded to trial, the United States would prove the facts set forth [in the Statement of Facts] beyond a reasonable doubt,” and that “these are not all of the facts that the United States would prove if this case had proceeded to trial.”  Id. at 7.  Petitioner acknowledged that the Statement of Facts was “true and correct.”  Id. at 8.