Phong Hung Tran, M.D., DAB No. 3148 (2024)

FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION

Phong Hung Tran, M.D. (Petitioner) appeals the April 26, 2024 decision of an Administrative Law Judge (ALJ)—the ALJ’s second decision in this case. Phong Hung Tran, M.D., DAB CR6466 (2024) (ALJ Decision II). The ALJ upheld 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) based on his felony conviction related to health care fraud, for 12 years—seven years longer than the mandatory minimum five years for an exclusion imposed under section 1128(a)(3). The ALJ concluded that the 12-year exclusion period was not unreasonable based on the existence of two aggravating factors in 42 C.F.R. § 1001.102(b)(1) (Petitioner’s offense caused a government program to lose at least $50,000) and 42 C.F.R. § 1001.102(b)(2) (Petitioner committed the offense for at least one year), and one mitigating factor in 42 C.F.R. § 1001.102(c)(3) (Petitioner cooperated with government officials). The ALJ determined that Petitioner failed to prove an additional mitigating factor in 42 C.F.R. § 1001.102(c)(2) (court found reduced culpability for the offense) to warrant further reduction of the 12-year exclusion period.

This case began with the I.G.’s initial determination to exclude Petitioner under section 1128(a)(3) of the Act based on Petitioner’s felony conviction related to health care fraud, for 17 years, based on the presence of three aggravating factors (including those in sections 1001.102(b)(1) and (b)(2)) and in the absence of any mitigating factor in 42 C.F.R. § 1001.102(c). Petitioner appealed that decision to the ALJ, seeking a shorter exclusion period. While the ALJ’s decision was pending, the I.G. decided to apply only two of the three aggravating factors (i.e., sections 1001.102(b)(1) and (b)(2)) and reduced the 17-year exclusion to 15 years. By decision dated June 29, 2023, the ALJ upheld the 15-year exclusion as reasonable in duration, based on the two aggravating factors the I.G. applied and in the absence of any cognizable mitigating factor. Phong Hung Tran, M.D., DAB CR6309 (2023) (ALJ Decision I).

Petitioner appealed ALJ Decision I to the Departmental Appeals Board (Board), seeking further reduction of the 15-year exclusion. Petitioner asserted that a shorter exclusion is

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warranted based on new evidence submitted initially to the Board, which Petitioner claimed proved the existence of two mitigating factors, in sections 1001.102(c)(2) and 1001.102(c)(3). While Petitioner’s appeal of ALJ Decision I was pending before the Board, the I.G. further reduced the exclusion period to 12 years based on the new evidence Petitioner presented to the Board, which the I.G. accepted as showing Petitioner’s cooperation with government officials and thus supporting the mitigating factor in section 1001.102(c)(3). The I.G. argued, however, that Petitioner did not substantiate the mitigating factor in section 1001.102(c)(2).

On November 1, 2023, the Board issued its decision. Phong Hung Tran, M.D., DAB No. 3120 (2023). The Board found no error in ALJ Decision I, which upheld the 15-year exclusion. The Board held that the ALJ correctly determined that the I.G. lawfully excluded Petitioner under section 1128(a)(3) of the Act and established the existence of the two aggravating factors in sections 1001.102(b)(1) and (b)(2) that support lengthening the required minimum five-year period. Nevertheless, the Board remanded the case to the ALJ to enable the ALJ to address, in the first instance, whether a 12-year exclusion period falls within a reasonable range considering that the I.G. reduced the 15-year exclusion to 12 years after ALJ Decision I was issued, based on new evidence implicating the existence of the mitigating factor in section 1001.102(c)(3), which the ALJ did not have an opportunity to consider earlier. The Board also noted that the new evidence implicated the potential applicability of the mitigating factor in section 1001.102(c)(2)—an issue for the ALJ to also consider on remand.

The ALJ having upheld in ALJ Decision II a 12-year exclusion, the Board now reviews that decision to determine whether it is supported by substantial evidence and free of legal error. It is. We, like the ALJ, conclude that the 12-year exclusion period lies within a reasonable range and that Petitioner has not carried his burden to prove the existence of an additional mitigating factor in section 1001.102(c)(2) to warrant further reduction of the 12-year exclusion period. We therefore affirm ALJ Decision II.

Legal Background

Section 1128(a) of the Act mandates the exclusion of those who have been convicted of certain criminal offenses from participating in Medicare, Medicaid, and other federal health care programs. Section 1128(a)(3), titled “Felony conviction relating to health care fraud,” requires the exclusion of –

[a]ny individual . . . [who] 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 [section 1128(a)(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

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relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct.

Act § 1128(a)(3); accord 42 C.F.R. § 1001.101(c).

An individual is “convicted” of a criminal offense within the meaning of the statute when, among other things, “a judgment of conviction has been entered against the individual . . . by a Federal, State, or local court,” or “when a plea of guilty . . . by the individual . . . has been accepted by a Federal, State, or local court.” Act § 1128(i)(1), (3); accord 42 C.F.R. § 1001.2 (paragraphs (a) and (c) under the definition of “Convicted”).

When an exclusion is imposed under section 1128(a) of the Act, the I.G. must exclude the individual for a period of “not less than five years.” Act § 1128(c)(3)(B); accord 42 C.F.R. § 1001.102(a). The I.G. may extend the exclusion period beyond the statutory minimum if certain “aggravating factors” are present. 42 C.F.R. § 1001.102(b) (“Any of the following factors may be considered to be aggravating and a basis for lengthening the period of exclusion[.]”). Relevant here are the following two aggravating factors:

(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. . . .

(2) The acts that resulted in the conviction, or similar acts, were committed over a period of one year or more.

Id. § 1001.102(b)(1)-(2).

If any aggravating factor applies to lengthen the five-year exclusion period, then the mitigating factors in 42 C.F.R. § 1001.102(c)—and only those mitigating factors—may be considered as a basis for reducing the exclusion period to no less than five years. Relevant here are the following two mitigating factors:

(2) 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; or

(3) The individual’s or entity’s cooperation with Federal or State officials resulted in—

(i) Others being convicted or excluded from Medicare, Medicaid and all other Federal health care programs,

(ii) Additional cases being investigated or reports being issued by the

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appropriate law enforcement agency identifying program vulnerabilities or weaknesses . . . .

Id. § 1001.102(c)(2)-(3).

If the I.G. determines that exclusion is warranted, the I.G. will send written notice to the excluded individual identifying, among other things, the basis for and length of the exclusion and the factors, if any, the I.G. considered in determining the length of the exclusion. 42 C.F.R. § 1001.2002(a), (c). The 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 an exclusion longer than the required minimum period is “unreasonable” in light of any applicable aggravating and mitigating factors. See id. §§ 1001.2007(a)(1), 1005.2(a).

“The ALJ conducts a de novo review ‘as to the evidence and factual determinations’ relevant to the scope of the ALJ’s review.” Shaun Thaxter, DAB No. 3053, at 3 (2021) (quoting Edwin L. Fuentes, DAB No. 2988, at 10 (2020), aff’d, No. 4:20-cv-00026, 2021 WL 4341115 (W.D. Va. Sept. 23, 2021)). In assessing an exclusion period longer than the five-year minimum, the ALJ “reviews the length of an exclusion de novo to determine whether it falls within a reasonable range, given the aggravating and mitigating factors and the circumstances underlying them.” Rosa Velia Serrano, DAB No. 2923, at 8 (2019) (quoting Sushil Aniruddh Sheth, M.D., DAB No. 2491, at 5 (2012), appeal dismissed, No. 13-cv-00448, 2014 WL 11813597 (D.D.C. Jan. 10, 2014), appeal dismissed, No. 14-5179, 2015 WL 3372286 (D.C. Cir. May 7, 2015)). The ALJ issues an “initial decision” based on the record developed before the ALJ. 42 C.F.R. § 1005.20(a).

A party dissatisfied with the “initial decision” may appeal it to the Board. Id. § 1005.21(a). The Board’s standard of review in I.G. exclusion cases is established by regulation. See id. § 1005.21(h). Board review is, in general, “based on the record developed before the ALJ.” Gracia L. Mayard, M.D., DAB No. 2767, at 6 (2017) (internal quotation marks and citation omitted). The Board “will not consider any issue not raised in the parties’ briefs, nor any issue in the briefs that could have been raised before the ALJ but was not.” 42 C.F.R. § 1005.21(e).

Case Background

This section includes a summary of the background of this case leading up to the Board’s issuance of its initial decision remanding the case to the ALJ, DAB No. 3120 (2023), as well as developments post-remand. We do not alter any of our prior legal conclusions in DAB No. 3120.

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A. Petitioner’s Felony Conviction

On September 13, 2021, Petitioner, a physician in the state of California, pled guilty to one count of felony Conspiracy to Commit Honest Services Mail Fraud and Health Care Fraud in violation of 18 U.S.C. § 1349, in the U.S. District Court for the Southern District of California (District Court). See C-23-72 I.G. Ex. 2, at 1-4, 25;¹ C‑23-72 I.G. Ex. 3; C‑23-72 I.G. Ex. 4. By his guilty plea, Petitioner admitted that from at least April 2013 through June 2016, Petitioner conspired with others to fraudulently obtain money from health care benefit programs by “submitting claims for prescription pharmaceuticals, Durable Medical Equipment,” and other medical goods and services that “were generated through a secret pattern of bribes to [Petitioner] and other doctors . . . to induce doctors to refer patients to those services, and to refer to particular providers, in violation of the doctors’ fiduciary duty to their patients.” C-23-72 I.G. Ex. 2, at 5 (¶¶ 2-3). Petitioner also admitted by his guilty plea that his criminal actions caused more than $1 million in losses to the California Workers’ Compensation Program. Id. at 10 (¶ 30). The District Court accepted Petitioner’s guilty plea, entered a judgment of conviction against Petitioner based on the plea, and sentenced Petitioner to “time served,” two years of supervised release with a special condition of 12 months of home detention, and a $100 assessment. C-23-72 I.G. Ex. 4, at 1-3, 5; see also C-23-72 P. Ex. 1.

B. The I.G.’s Determination to Exclude Petitioner

By letter dated August 31, 2022, the I.G. excluded Petitioner from participation in all federal health care programs pursuant to section 1128(a)(3) of the Act, based on his felony conviction in the District Court. C-23-72 I.G. Ex. 1, at 1. The I.G. stated that Petitioner was being excluded for 17 years based on three aggravating factors:

1. financial loss to a government agency or program of $50,000 or more, i.e., Petitioner caused “financial loss of at least $1,000,000 to the California’s Worker[s’] Compensation system;”
2. the acts resulting in the conviction were committed over a period of a year or more, i.e., “from about April 2013 to about June 2016;” and
3. Petitioner was the subject of an “adverse action” that was “based on the same set of circumstances” that formed the basis for Petitioner’s exclusion, i.e., the California Medical Board “revoked” Petitioner’s medical license.

Id. at 1-2; see 42 C.F.R. § 1001.102(b)(1)-(2), (9).

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C. Initial ALJ Proceedings and ALJ Decision I

Petitioner requested an ALJ hearing. In Petitioner’s brief before the ALJ (P. Pre-hearing Br.), Petitioner stated, “that he was challenging the length of the exclusion only, and not the underlying basis of the exclusion.” C-23-72 P. Pre-hearing Br. at 2. Petitioner argued that the I.G. wrongly applied the aggravating factor in 42 C.F.R. § 1001.102(b)(9) because, on appeal of the California Medical Board’s revocation of his medical license, on June 13, 2022, the state court “set aside” the revocation and directed the Medical Board to reconsider the revocation. See id. at 3-5 (citing C-23-72 P. Ex. 2). Petitioner also stated that on remand to the Medical Board, the Medical Board again revoked his medical license, but later stayed the execution of revocation. See id. at 4. Accordingly, Petitioner argued, his medical license “has been, and remains, active and valid since June 13, 2022.” Id. at 4. Thus, Petitioner argued that when the I.G. issued its August 31, 2022 exclusion notice, Petitioner’s medical license was not “revoked” as the I.G. erroneously indicated in its notice. See id. at 4-5. Petitioner also asserted that the length of the exclusion should be reduced because he was unable to practice medicine from June 2016, when his medical license was suspended, to June 2022. See id. at 5.

The I.G. agreed that the aggravating factor in section 1001.102(b)(9) did not apply and issued an amended exclusion notice, dated May 9, 2023, removing the factor and reducing Petitioner’s exclusion period from 17 years to 15 years. See C-23-72 I.G. Reply Br. at 1-2; C-23-72 I.G. Ex. 6. The I.G. nevertheless argued before the ALJ that there was a legal basis for the exclusion, that the aggravating factors in sections 1001.102(b)(1) and (b)(2) were both uncontested and supported by the record, and that a 15-year exclusion was not unreasonable. See C-23-72 I.G. Reply Br. at 2-3.

Because neither party proposed any witnesses to testify at a hearing, the ALJ determined that a hearing was unnecessary and decided the case based on the parties’ written submissions. See ALJ Decision I at 2. By decision issued June 29, 2023, the ALJ affirmed the I.G.’s exclusion determination. See id. at 1. The ALJ held that the I.G. satisfied the statutory conditions for excluding Petitioner pursuant to section 1128(a)(3) of the Act and, therefore, “Petitioner must be excluded for a minimum of five years.” Id. at 3, 5. The ALJ found that the I.G. established the aggravating factor in section 1001.102(b)(1) because “Petitioner conceded in his plea agreement that the California Worker[s’] Compensation Program suffered a loss of greater than $1,000,000,” which “is greater than the $50,000 threshold that [section 1001.102(b)(1)] establishes.” Id. at 6 (citing C‑23-72 I.G. Ex. 2, at 10). The ALJ also found that the I.G. established the aggravating factor in section 1001.102(b)(2) because Petitioner conceded having committed the crime for over three years (from April 2013 to June 2016), longer than the one-year threshold required by section 1001.102(b)(2). Id. The ALJ further found that Petitioner had not established any mitigating factor in section 1001.102(c). Id. at 6-7. The ALJ concluded that the 15-year exclusion period, which took effect on September 20, 2022, was not unreasonable based on the two established aggravating factors and in

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the absence of any mitigating factors. Id. at 7-8; see 42 C.F.R. § 1001.2002(b) (“The exclusion will be effective 20 days from the date of the notice.”). In response to Petitioner’s argument that further reduction of the exclusion period was warranted in consideration of the period during which Petitioner was unable to practice medicine, the ALJ stated that “such facts” were for the I.G. to consider when setting the exclusion period. See ALJ Decision I at 8-9.

D. Petitioner’s Appeal of ALJ Decision I to the Board and DAB No. 3120 (2023)

Petitioner sought further reduction of the 15-year exclusion period. Before the Board, Petitioner argued, among other things, that further reduction of the exclusion period was warranted based on the District Court’s imposition of a “lenient sentence,” “early termination” of supervised release, and the period during which Petitioner could not practice medicine due to the suspension of his medical license. See A-23-58 P. Notice of Appeal & Supporting Br. (A-23-58 P. Br.) at 5-7, 9-10. Petitioner also submitted new evidence—the transcript of the September 13, 2021 sentencing hearing in the criminal proceedings in the District Court—which Petitioner argued “reveals that [Petitioner] cooperated with the government and contains references to [Petitioner’s] traumatic childhood” as a Vietnam War refugee, thus establishing the mitigating factors in 42 C.F.R. § 1001.102(c)(2) and (c)(3). Id. at 8-9; see A-23-58 Req. for Remand & Decl. of Albert J. Garcia in Support Therefor (Att’y Decl.) (attaching the transcript). Petitioner’s attorney argued there were “reasonable grounds” for not presenting the transcript earlier because the attorney did not represent Petitioner in the criminal proceedings and was unaware of and did not come into possession of the transcript until July 24, 2023 (after ALJ Decision I was issued) and urged the Board to remand the case to the ALJ to consider the transcript. See A‑23-58 P. Br. at 8-9; Att’y Decl. at 1-2 (¶¶ 3-4, 7).

The I.G. asserted that Petitioner “should not be able to present” new evidence (the transcript) to the Board. A-23-58 I.G.’s Br. in Opp’n to Appellant’s Appeal at 4. The I.G. nevertheless considered the transcript “in the interest of fairness.” Id. at 5. The I.G. agreed that the transcript “suggest[ed] that Petitioner’s cooperation resulted in the conviction of another individual,” so the I.G. applied the mitigating factor in section 1001.102(c)(3) and issued a second amended notice of exclusion, dated August 28, 2023, further reducing the exclusion period from 15 years to 12 years.² Id. at 5; see id. at 1, 7. The I.G. nevertheless urged the Board not to consider any new argument concerning mitigation Petitioner failed to raise earlier. See id. at 5, 6. The I.G. also argued that Petitioner did not prove the mitigating factor in section 1001.102(c)(2) because Petitioner “did not provide any evidence demonstrating that the judge in the underlying criminal case determined that [Petitioner’s] mental, emotional, or physical condition reduced his culpability in the commission of his crime.” Id. at 6. The I.G. asked the Board not to remand this case to the ALJ and instead affirm ALJ Decision I because the ALJ did not err in upholding the 15-year exclusion. See id. at 7.

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The Board affirmed the ALJ’s conclusion that the I.G. lawfully excluded Petitioner under section 1128(a)(3) of the Act and that the I.G. established the existence of the two aggravating factors in sections 1001.102(b)(1) and (b)(2) that support lengthening the mandatory minimum five-year period. See DAB No. 3120, at 10-12. The Board considered, but rejected, Petitioner’s arguments about mitigation, explaining that “[t]he District Court’s imposition and early termination of supervised release, and the period during which Petitioner’s California medical license was inactive, are not cognizable mitigating factors and thus cannot be the basis for reducing the exclusion period.” Id. at 12 (bold and italics omitted).

The Board, however, decided to remand the case to the ALJ because “when the ALJ issued [ALJ Decision I], the question was whether a 15-year exclusion was reasonable [but] as a result of the I.G.’s second amended exclusion notice, the issue is whether a 12-year exclusion is reasonable, and the ALJ has not had an opportunity to consider this specific issue.” Id. at 15 (emphasis in original) (citing 42 C.F.R. § 1005.21(g)). The Board instructed the ALJ to consider, in the first instance, whether the 12-year exclusion period falls within a reasonable range. See id. at 14-16. The Board declined to rule on the admissibility of the transcript and instructed the ALJ “to rule on Petitioner’s request to admit into the record the transcript of the sentencing hearing.” Id. at 16. The Board further stated that the ALJ “may permit the parties to submit additional written argument, as the ALJ determines appropriate, concerning the possible applicability of the mitigating factor in 42 C.F.R. § 1001.102(c)(2), and the mitigating factor in 42 C.F.R. § 1001.102(c)(3) (cooperation with authorities) the I.G. already has applied to reduce the exclusion period from 15 years to 12 years.” Id. (emphasis in original).

E. ALJ Proceedings on Remand and ALJ Decision II

On remand, the ALJ set the deadlines for filing prehearing submissions and identified three issues for resolution:

(1) whether Petitioner had “reasonable grounds” for not presenting the sentencing transcript or other evidence in the initial ALJ proceedings and whether the I.G. was prejudiced by Petitioner’s late proffer of evidence;

(2) whether Petitioner had a mental, emotional or physical condition before or during the commission of the offense that reduced his culpability, which establishes a mitigating factor under 42 C.F.R. § 1001.102(c)(2); and

(3) whether a 12-year period of exclusion lies within a reasonable range.

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C-24-52 Order Following Prehearing Conference & Setting Schedule for Prehearing Submissions (Dec. 8, 2023), at 1-2.³

Petitioner submitted his brief (P. Remand Br.), along with three proposed exhibits (the sentencing hearing transcript (P. Ex. 5); Petitioner’s September 28, 2020 letter to the sentencing judge (P. Ex. 6); and the report of a 2017 psychiatric evaluation of Petitioner (P. Ex. 7)). The I.G. offered its August 28, 2023 second amended exclusion notice as I.G. exhibit 7.

As “reasonable grounds” for why Petitioner did not present the sentencing transcript and other mitigation evidence earlier, Petitioner’s attorney reiterated that he was not aware of and did not come into possession of the transcript until July 24, 2023. See C-24-52 P. Remand Br. at 1-2. Petitioner argued that “presenting the transcript on remand does not appear to prejudice the” I.G. because the I.G. already reduced the exclusion period to 12 years based on the transcript. Id. at 2. Petitioner asked the ALJ to admit the transcript and other proffered exhibits into evidence. See id. at 3 nn.1-2, 4.

Petitioner further argued he proved the mitigating factor in 42 C.F.R. § 1001.102(c)(2). Petitioner argued the transcript “refer[s] to traumatic events of [Petitioner’s] childhood, when he was among 25 survivors of the 50 refugees adrift at sea on a boat following the end of the Vietnam War.” Id. at 2 (citing C‑24-52 P. Ex. 5, at 4:7-12). Petitioner also argued that his criminal defense attorney’s statement in the transcript that “the Court is aware” is a reference to Petitioner’s September 28, 2020 letter to the sentencing judge, “which describes in disturbing detail the traumatic ordeal suffered by him and his family on their desperate escape from Vietnam.” Id. at 2-3 (citing C-24-52 P. Ex. 5, at 4:8 and C-24-52 P. Ex. 6, at 2-3). Petitioner further stated that Petitioner “underwent a psychiatric evaluation in 2017” and was “diagnosed with ‘a significant mental disorder,’” and “was found to have ‘multiple symptoms of depression and anxiety,’ and ‘appeared to suffer from a major depression.’” Id. at 3 (quoting C-24-52 P. Ex. 7, at 4). Petitioner argued the transcript, his letter to the sentencing judge, and the 2017 psychiatric evaluation report are all “evidence of a mental or emotional condition that existed before or during the commission of the offense” that reduced his culpability and established the mitigating factor in section 1001.102(c)(2). Id. Thus, Petitioner argued the 12-year “exclusionary period does not lie within a reasonable range,” and ought to be further reduced “closer to the minimum.” Id. at 3-4.

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The I.G. first asserted that “Petitioner did not have reasonable grounds for failing to present the transcript and other evidence” in the initial ALJ proceedings. C-24-52 I.G. Reply Br. at 2. Nevertheless, the I.G. stated, “that, in this case, there was minimal prejudice to the I.G. for Petitioner’s failure to present the evidence before the ALJ because, in the interest of fairness, the I.G. was willing to take this new evidence into account and decrease the period of exclusion accordingly.” Id. The I.G. next argued that Petitioner did not carry his burden to prove the mitigating factor in section 1001.102(c)(2) existed because “Petitioner presented no evidence that the court in his underlying criminal case determined that Petitioner’s mental state reduced his culpability as required by the regulations.” Id. at 3, 4. The I.G. acknowledged that Petitioner “underwent a psychiatric evaluation in 2017 resulting in a diagnosis of depression and anxiety,” but noted it was “not clear why Petitioner underwent a psychiatric evaluation” and argued that “even if the court ordered this for Petitioner, this does not satisfy the mitigating factor” in section 1001.102(c)(2). See id. at 3. The I.G. further argued the 12‑year period of exclusion is reasonable based on the two established aggravating factors in sections 1001.102(b)(1) and (b)(2) and the mitigating factor of cooperation in section 1001.102(c)(3). See id. at 4-8.

The ALJ “admitted or re-admitted” into evidence all exhibits submitted before and after the Board remanded the case because “[n]either party objected to the other party’s exhibits,” noting the I.G.’s acknowledgment of minimal prejudice to the I.G. were the ALJ to admit new evidence post remand. See ALJ Decision II at 3 & n.3. The ALJ issued the decision on April 26, 2024, based on the written record and without a hearing because “[n]either party has proposed any witnesses for a hearing, and . . . a hearing is unnecessary given the written record.” Id. at 1, 3.

The ALJ upheld the 12-year exclusion. See id. at 1, 10. Reiterating the Board’s prior holding, the ALJ determined that the I.G. lawfully excluded Petitioner under section 1128(a)(3) of the Act, thus requiring a mandatory minimum five‑year exclusion, and that the I.G. established the existence of the two aggravating factors in sections 1001.102(b)(1) and (b)(2) that support lengthening the five-year period. See id. at 4-5. Additionally, the ALJ found that Petitioner established the mitigating factor of cooperation in section 1001.102(c)(3) by “testifying in a jury trial, [which] resulted in the conviction of another individual.” Id. at 10 (citing C-24-52 P. Ex. 5, at 15-16); see id. at 5-6. The ALJ determined, however, that Petitioner had not proven the mitigating factor in section 1001.102(c)(2). See id. at 6-7. The ALJ noted that the 2017 psychiatric evaluation report discussed Petitioner’s significant mental disorder, symptoms of depression and anxiety, and compulsive gambling addiction. Id. at 7. The ALJ also considered Petitioner’s letter to the sentencing judge (P. Ex. 6), in which Petitioner described the “horrific trauma” and “grave ordeal” he had endured as a Vietnam War refugee fleeing Vietnam by boat. Id. at 7. The ALJ also noted that the transcript showed the sentencing judge “acknowledged that Petitioner ‘has a life story that is sympathetic.’” Id. (quoting C-24-52 P. Ex. 5, at 25:21-22). The ALJ determined that even assuming the

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sentencing judge had relied on the 2017 psychiatric evaluation results to determine that Petitioner had a mental or emotional condition before or during the commission of the underlying offense and that the record reflects that determination, Petitioner did not meet his burden of proving the mitigating factor because “the record does not demonstrate that the [sentencing judge] . . . determined that Petitioner’s mental or emotional condition reduced his culpability.” Id.

In considering whether the 12-year period of exclusion was within a reasonable range, the ALJ noted Petitioner did not dispute the weight the I.G. assigned to the two established aggravating factors in sections 1001.102(b)(1) and (b)(2). Id. at 8. The ALJ found that “Petitioner’s conduct ‘caused [financial] loss greater than $1 million to a government health care program,’” which is significantly higher than the $50,000 threshold set in section 1001.102(b)(1). Id. at 9 (alteration in original) (quoting C-23-72 I.G. Ex. 2, at 10 (¶ 30)). The ALJ explained that “[f]inancial loss represents an ‘exceptional aggravating factor’ where, as here, the loss is ‘substantially greater than the statutory standard.’” Id. (quoting Jeremy Robinson, DAB No. 1905, at 12 (2004)). The ALJ further found that Petitioner’s criminal actions “were committed over more than three years,” longer than the one-year threshold in section 1001.102(b)(2), and “[t]he considerable amount of time over which Petitioner perpetrated his fraud scheme demonstrates that his lack of integrity was not ‘short-lived’ and further supports an enhancement to the mandatory minimum five-year period of exclusion.” Id. (quoting Donald A. Burstein, Ph.D., DAB No. 1865, at 8 (2003)). Concerning mitigation, the ALJ found that Petitioner established the mitigating factor of cooperation in section 1001.102(c)(3) and that the I.G. “sufficiently accounted for Petitioner’s cooperation by applying a three-year downward departure (from 15 to 12 years).” Id. at 10.⁴ Therefore, the ALJ concluded that the 12-year exclusion period was not unreasonable. Id. at 1, 10.

The Parties’ Arguments on Appeal of ALJ Decision II

Petitioner timely appealed ALJ Decision II. A-24-48 P.’s Notice of Appeal & Appellant’s Br. (P. Post-Remand Br.). Before the Board, Petitioner only disputes the ALJ’s finding that he had failed to establish the mitigating factor in section 1001.102(c)(2). Petitioner argues “[t]he ALJ’s finding that ‘there is no evidence in the record to support that the court determined Petitioner’s mental or emotional condition reduced his culpability,’ is not supported by substantial evidence and, indeed, is contrary to the evidence.” Id. at 4 (emphasis omitted) (quoting ALJ Decision II at 7). Petitioner asserts that the psychiatric evaluation, his letter to the sentencing judge describing Petitioner’s traumatic childhood as a Vietnam War refugee, and the sentencing judge’s statement in the transcript about Petitioner’s sympathetic life story “show that

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[Petitioner’s] mental or emotional condition was definitely factored into the sentence that was imposed.” Id. at 4 (citing ALJ Decision II at 7). Petitioner asserts “[t]he relative leniency of” Petitioner’s sentence of two years of supervision “belies the ALJ’s finding that [Petitioner’s] mental or emotional condition was not considered by the sentencing judge in fashioning the sentence.” Id. at 4-5. Petitioner further asserts “[t]he ALJ’s conclusion was based on the ostensible misapprehension that the court was required to state expressly that it had considered all the mitigating factors,” which “is not the law.” Id. at 6. Petitioner asks the Board to “set aside” ALJ Decision II or reduce the 12-year exclusion period. Id. at 7.

In response, the I.G. urges the Board to affirm ALJ Decision II, arguing that “[t]he ALJ did not err in determining that [Petitioner’s] 12‑year exclusion was not unreasonable based on the application of two aggravating factors and one mitigating factor.” A-24-48 I.G.’s Br. in Opp’n to Appellant’s Appeal at 3. The I.G. asserts Petitioner’s argument that the imposition of a “lenient sentence” of two years of supervised release (with one of the two years in home confinement) is evidence that the sentencing judge found reduced culpability based on Petitioner’s mental or emotional condition is without merit because “[t]here is no evidence in the record to support that [Petitioner’s] sentence was reduced or even based on his mental or emotional condition.” Id. at 4. The I.G. also asserts that Petitioner’s “sentence was not particularly lenient given that the recommended sentence, based on the sentencing guidelines, was between 10 to 16 months.” Id. (citing C-24-52 P. Ex. 5, at 27:8-9). The I.G. further argues that contrary to Petitioner’s reading of the ALJ’s analysis, the ALJ did not erroneously assume that the sentencing judge was required to expressly state that the judge had considered all mitigating factors. Id. at 4. The I.G. stated that “while the sentencing court need not make explicit findings that a mental, emotional, or physical condition existed at the time of the offense that reduced culpability, [the reviewer] must nevertheless be able to infer clearly from the evidence of the [criminal] proceedings that the sentencing court made the requisite determination.” Id. at 4-5 (second alteration in original) (internal quotation marks omitted) (quoting Yolanda Hamilton, M.D., DAB No. 3061, at 20 (2022)). The I.G. argues that Petitioner “did not provide any evidence demonstrating that the judge in the underlying criminal case determined that [Petitioner’s] mental, emotional, or physical condition reduced his culpability in the commission of his crime as required to satisfy the mitigating factor at 42 C.F.R. § 1001.102(c)(2).” Id. at 5.

Standard of Review

The Board reviews a disputed issue of fact as to whether the ALJ “decision is supported by substantial evidence on the whole record.” 42 C.F.R. § 1005.21(h). The Board reviews a disputed issue of law as to whether the ALJ decision “is erroneous.” Id. The term “substantial evidence” means “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Ellen L. Morand, DAB No. 2436, at 3 (2012) (quoting Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consol.

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Edison Co. v. NLRB, 305 U.S. 197, 229 (1938))); see also Guidelines -- Appellate Review of Decisions of Administrative Law Judges in Cases to Which Procedures in 42 C.F.R. Part 1005 Apply (Guidelines), “Completion of the Review Process,” ¶ (c).⁵

Analysis

In our initial decision, we affirmed the ALJ’s conclusion that the I.G. had a lawful basis to exclude Petitioner under section 1128(a)(3) of the Act and that the I.G. established the presence of aggravating factors in 42 C.F.R. § 1001.102(b)(1) and (b)(2) that support lengthening the five-year period. See DAB No. 3120. We summarily reaffirm our prior holdings on the legal basis for the exclusion and the existence of two aggravating factors based on which the I.G. may lengthen the mandatory minimum five-year exclusion period.

Before the Board, Petitioner does not discuss or contest the weight assigned to the two established aggravating factors in sections 1001.102(b)(1) and (b)(2), or to the mitigating factor of cooperation in section 1001.102(c)(3). Petitioner disagrees only with the ALJ’s conclusion that he had failed to demonstrate the existence of the mitigating factor in section 1001.102(c)(2), asserting that he has proven the existence of this factor, based on which the 12-year exclusion period ought to be shortened. We limit our discussion to the arguments raised by Petitioner. 42 C.F.R. § 1005.21(e) (“The [Board] will not consider any issue not raised in the parties’ briefs, nor any issue in the briefs that could have been raised before the ALJ but was not.”).

Below, we first address Petitioner’s main argument that the ALJ erred in finding that Petitioner did not establish the mitigating factor in section 1001.102(c)(2). We conclude the ALJ did not err. Petitioner failed to carry his burden to prove the existence of the asserted mitigating factor in section 1001.102(c)(2).

We then address the remaining issue for resolution, which is whether the 12-year period of exclusion lies within a reasonable range. We conclude that the ALJ’s determination that the 12-year exclusion period is not unreasonable is supported by substantial evidence and free of legal error. We therefore affirm ALJ Decision II.

A. The ALJ did not err in concluding that Petitioner failed to prove the existence of the asserted mitigating factor in 42 C.F.R. § 1001.102(c)(2).

The regulation in 42 C.F.R. § 1001.102(c)(2) states as follows:

The record in the criminal proceedings, including sentencing documents, demonstrates that the court determined that the individual had a mental,

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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 made clear that Petitioner has the burden of proof and the burden of persuasion as to any asserted mitigating factor (as well as any affirmative defenses). See ALJ Decision I at 3 (citing 42 C.F.R. §§ 1001.2007(c) (stating that “[t]he standard of proof . . . is preponderance of the evidence”), 1005.15(c) (stating that “the ALJ will allocate the burden of proof as the ALJ deems appropriate”)); ALJ Decision II at 4, 5 (same citations to regulations); see also Christopher Switlyk, DAB No. 2600, at 5 (2014) (explaining that the petitioner “had the burden to prove the existence of any mitigating factors by a preponderance of the evidence” and that the petitioner “failed to meet this burden”); Farzana Begum, M.D., DAB No. 2726, at 8 (2016) (“[A]bsent a compelling reason, the Board defers to an ALJ’s weighing of the evidence . . . to determine whether [a petitioner] has proven the mitigating factors by a preponderance of the evidence.”), aff’d, No. 16‑CV-9624, 2017 WL 5624388 (N.D. Ill. Nov. 21, 2017).

To establish the mitigating factor in 42 C.F.R. § 1001.102(c)(2), Petitioner must prove “that the record in the criminal proceedings evidences that the court determined: 1) that the individual had a mental, emotional or physical condition before or during the commission of the offense; and 2) that the court concluded that the mental or physical condition reduced the individual’s culpability.” Hussein Awada, M.D., DAB No. 2788, at 15 (2017); see also Begum, DAB No. 2726,at 9 (stating that the “relevant inquiry” is whether a petitioner has proven that the sentencing court determined that the mental condition reduced the petitioner’s culpability); Patel v. Shalala, 17 F. Supp. 2d 662, 667 (W.D. Ky. 1998) (noting that Dr. Patel’s statements about his substance abuse and how such abuse affected his criminal culpability are “irrelevant” because section 1001.102(c)(2) “clearly requires a court finding of lessened culpability”), aff’g Sharad Patel, M.D., Dkt. No. A-97-50 (1997), declining review of Sharad Patel, M.D., DAB CR447 (1996).

The ALJ determined that Petitioner had not proven the alleged mitigating factor in section 1001.102(c)(2). See ALJ Decision II at 6-7. The ALJ considered Petitioner’s evidence of his psychiatric evaluation in 2017 showing “that he had a ‘significant mental disorder,’ ‘multiple symptoms of depression and anxiety,’ ‘appeared to suffer from a major depression,’ and has a compulsive gambling addiction,” and noted that the I.G. “does not appear to dispute that Petitioner suffered from depression and anxiety” or Petitioner’s accounting of the “grave ordeal” he endured as a refugee. Id. at 7 (quoting C-24-52 P. Ex. 7, at 4-5). The ALJ also considered Petitioner’s accounting of survival at sea and noted that the transcript showed the sentencing judge “acknowledged that Petitioner ‘has a life story that is sympathetic.’” Id. (quoting C‑24‑52 P. Ex. 5, at 25:21-22). The ALJ determined, however, that even if the ALJ were to find that this evidence

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demonstrates Petitioner had a mental or emotional condition before or during the commission of the offense under the factor’s first prong, “Petitioner would not be able to meet his burden with respect to the second prong: the record does not demonstrate that the Judge in the underlying criminal proceedings determined that Petitioner’s mental or emotional condition reduced his culpability.”⁶ Id.

Petitioner argues the ALJ’s finding “is contrary to the evidence,” as “[t]he record . . . more than adequately demonstrates that [Petitioner’s] mental and emotion[al] condition was considered and that it reduced his culpability.” A‑24-48 P. Post-Remand Br. at 4, 7. Petitioner asserts that his psychiatric evaluation, his letter to the sentencing judge describing his traumatic childhood as a Vietnam War refugee, and the sentencing judge’s statement in the transcript “that [Petitioner’s] ‘life story . . . is sympathetic’” “show that [Petitioner’s] mental or emotional condition was definitely factored into the sentence that was imposed.” Id. at 4 (ellipsis in original) (quoting ALJ Decision II at 7). Petitioner argues “[t]he ALJ committed legal error in concluding that the sentencing judge’s reference to [Petitioner’s] ‘sympathetic’ ‘life story’ during the sentencing hearing was not an indication that his ‘mental or emotional condition reduced his culpability.’” Id. at 6 (bold and italics omitted).

We agree with the ALJ that even assuming that Petitioner had a mental or emotional condition at the time of the offense, Petitioner failed to prove that the court determined that Petitioner’s mental or emotional condition reduced his culpability as required by section 1001.102(c)(2). The Board has explained that “[w]hile the sentencing court need not make explicit findings that a mental, emotional, or physical condition existed at the time of the offense that reduced culpability, [the Board] ‘must nevertheless be able to infer clearly from the evidence of the [criminal] proceedings that the sentencing court made the requisite determination.’” Hamilton, DAB No. 3061, at 20 (emphasis and third alteration in original) (quoting Mohamad Ahmad Bazzi, DAB No. 2917, at 11 (2018)); see also Arthur C. Haspel, D.P.M., DAB No. 1929, at 4 (2004) (explaining that where an explicit finding is not required “for purposes of the sentencing proceeding itself,” the mitigating factor in section 1001.102(c)(2) may be established if “it would be reasonable to infer from the entire record that the presiding judge had made the determinations required by the regulation as part of the sentencing process”). The excluded individual must carry the burden to prove this mitigating factor. Hamilton at 20 (citing Bazzi at 10‑11).

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Here, we find that the sentencing record does not support a reasonable inference that the court determined that Petitioner had a mental or emotional condition before or during the commission of his offense that reduced his culpability. The sentencing judge’s single statement that Petitioner “has a life story that is sympathetic” alone does not support such an inference. C‑24‑52 P. Ex. 5, at 25:21-22. Nowhere in the transcript or any other record evidence do we find any indication that the sentencing judge stated or conveyed that Petitioner was less culpable for his offense due to his childhood trauma as a war refugee or any mental or emotional condition.

The evidence before us does include references to Petitioner’s depression and anxiety, gambling addiction, and history of alcohol use. See, e.g., C-24-52 P. Ex. 5, at 8; C-24-52 P. Ex. 6, at 4-6; C-24-52 P. Ex. 7, at 1, 4-5; C-23-72 I.G. Ex. 5, at 18, 20, 40. Although it is conceivable that depression and anxiety could be associated with childhood trauma as a Vietnam War refugee, which Petitioner asserts is the mitigating factor, Petitioner has not come forward with evidence of a direct cause-effect link between the two. Notably, although the 2017 psychiatric evaluation report (P. Ex. 7) discusses in some detail Petitioner’s family background and difficult personal relationships, it includes no mention of Petitioner’s childhood ordeal fleeing Vietnam by boat. Moreover, Petitioner has not specifically claimed that gambling and alcohol problems themselves were conditions warranting mitigation under section 1001.102(c)(2). In any case, regardless of whether, and even assuming, depression and anxiety, gambling addiction, and alcohol abuse are individually or collectively related or traceable to trauma Petitioner sustained as a war refugee, at bottom, the record does not show that the court perceived Petitioner to be less culpable for his criminal offense as a result of these problems.⁷

Petitioner argues that his 2017 psychiatric evaluation and his letter to the sentencing judge describing his childhood trauma along with the sentencing judge’s statement about Petitioner’s sympathetic life story show that the sentencing judge considered Petitioner’s mental or emotional condition in reducing his culpability. See A‑24-48 P. Post-Remand Br. at 4, 6-7. Even accepting that the sentencing judge had considered the psychiatric evaluation report together with Petitioner’s letter to the judge, nothing in the transcript or the sentencing judge’s statement about Petitioner’s sympathetic life story indicates that the judge was referring to Petitioner’s psychiatric evaluation report (which, as noted, does not specifically discuss Petitioner’s survival at sea or trauma sustained as a war refugee) or his letter to the sentencing judge. Petitioner’s psychiatric evaluation report and letter to the sentencing judge, while pertinent to establishing whether Petitioner had a mental or emotional condition at the time he committed his offenses, do not themselves prove that

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the court determined Petitioner had a mental or emotional condition that reduced his culpability. See Switlyk, DAB No. 2600, at 6 (finding that “excerpts of psychological evaluations and letters from psychiatrists who examined” the petitioner showing he had psychological problems did not fulfill the requirements of section 1001.102(c)(2) because the documentation “is not evidence that the court determined [the petitioner] suffered from psychological problems that reduced his criminal culpability”); see also Marcia C. Smith, DAB No. 2046, at 6 (2006) (agreeing with the ALJ that “the mere presence” before the court of certain documents, to include the petitioner’s response to a pre-sentencing report, describing the petitioner’s “several illnesses” was not “enough to support an inference that [the petitioner’s] medical conditions reduced her culpability”). The sentencing judge commented only that Petitioner had a sympathetic life story and did not state anything from which we can reasonably infer that the judge determined Petitioner was less culpable due to any mental or emotional condition.

Petitioner also asserts “[t]he relative leniency of” Petitioner’s sentence of two years of supervised release “belies the ALJ’s finding that [Petitioner’s] mental or emotional condition was not considered by the sentencing judge in fashioning the sentence.” A‑24‑48 P. Post‑Remand Br. at 4-5; see also id. at 6 (asserting that “[t]he lenient sentence that the judge imposed is in and of itself an indication that [Petitioner’s] culpability was reduced by consideration of his mental and emotional condition”). Petitioner essentially rehashes his earlier argument that the imposition of a “relatively lenient sentence” itself supports mitigation, which we rejected, see DAB No. 3120, at 12-13, but now asserts the imposition of a “lenient sentence” indicates that the judge found reduced culpability for purposes of mitigation under section 1001.102(c)(2). Again, nothing in the sentencing hearing transcript or any other record evidence shows that the judge in fact imposed a lesser or more lenient sentence because the judge determined that Petitioner had a mental or emotional condition that reduced his culpability. Indeed, the transcript suggests that the judge sentenced Petitioner to supervised release and 12 months of home detention, rather than prison, because “covid is back, and [Petitioner] does have some health issues that are documented” and “putting [Petitioner] in custody is not the right thing.” C-24-52 P. Ex. 5, at 28:8-11; see also id. at 27:10-12 (the judge explaining that “we’re in unusual times. Prior to covid, I think that probably [Petitioner] would have gone into custody, had we not had all of these delays”).⁸

Petitioner further asserts “[t]he ALJ’s conclusion was based on the ostensible misapprehension that the court was required to state expressly that it had considered all

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the mitigating factors,” which “is not the law,” and quotes United States v. Tillman, No. 20-14185, 2021 WL 5822696, at *2 (11th Cir. Dec. 8, 2021), to assert a “court ‘need not explicitly state that it considered each factor or discuss each factor.’” A‑24‑48 P. Post‑Remand Br. at 6. Petitioner quotes Tillman out of context. The “factors” the court in Tillman referenced are the factors in 18 U.S.C. § 3553(a) that a court must consider in imposing a sentence in a criminal case, not the mitigating factors an excluded individual must prove under 42 C.F.R. § 1001.102(c) when challenging the length of an exclusion imposed by the I.G. See Tillman, 2021 WL 5822696, at *2. To the extent Petitioner is arguing that a court need not have expressly stated it found reduced culpability in sentencing a criminal defendant as relevant to later considering whether the mitigation factor in section 1001.102(c)(2) is shown, we agree. See, e.g., Bazzi, DAB No. 2917, at 11.⁹ But we must be able to infer that the court found reduced criminal culpability due, as asserted, to Petitioner’s mental or emotional condition. The record does not support such an inference, and Petitioner fails to convince us otherwise.

Petitioner states “that the sentencing judge considered all of the mitigating factors.” A‑24‑48 P. Post‑Remand Br. at 6. The issue is not whether the sentencing judge considered all “mitigating factors” in accordance with the sentencing guidelines during the criminal proceedings. The issue, now, in I.G. exclusion proceedings, is whether the evidence concerning the sentencing judge’s earlier assessment in determining an appropriate sentence in accordance with those guidelines supports, at minimum, a reasonable inference that the judge found Petitioner less criminally culpable due to a condition that existed before or during Petitioner’s commission of the offense.¹⁰ Even accepting that the 2017 psychiatric evaluation report that discusses Petitioner’s depression and anxiety was before the judge, who, at the time of sentencing, was aware of Petitioner’s traumatic childhood experience, the evidence, as the ALJ determined (ALJ Decision II at 7), does not support a conclusion that the judge determined that Petitioner had a mental or emotional condition before or during his commission of the offense that reduced his criminal culpability. It is Petitioner’s burden to show that the judge made such a determination, but, as the ALJ determined and we agree, he has not borne that burden.

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Thus, the ALJ did not err in concluding that Petitioner failed to prove the existence of the asserted mitigating factor in 42 C.F.R. § 1001.102(c)(2).

B. The ALJ’s determination that a 12-year exclusion period is not unreasonable based on two aggravating factors and one mitigating factor of cooperation is supported by substantial evidence and free of legal error.

Having determined that Petitioner did not establish the mitigating factor in 42 C.F.R. § 1001.102(c)(2), we now consider whether the ALJ properly concluded that Petitioner’s 12-year exclusion period was within a reasonable range.

“An ALJ reviews the length of an exclusion de novo to determine whether it falls within a reasonable range given the aggravating and mitigating factors and the circumstances underlying them.” Sheth, DAB No. 2491, at 5. The ALJ’s evaluation does not rest on the number of aggravating or mitigating factors or any rigid formula for weighing them, but “on a case-specific determination of the weight to be accorded each factor based on a qualitative assessment of the circumstances surrounding the factors in the case.” Id. (citing Robinson, DAB No. 1905, at 4-5). “An ALJ may not substitute his or her judgment for that of the I.G. or determine a better exclusion period” than that set by the I.G., who “has broad discretion in setting the length of an exclusion in a particular case, based on [the I.G.’s] vast experience implementing exclusions.” Id. (internal quotation marks and citations omitted). “So long as the amount of time chosen by the [I.G.] is within a reasonable range, based on demonstrated criteria, the ALJ has no authority to change it” under the regulations. 57 Fed. Reg. 3,298, 3,321 (Jan. 29, 1992) (publishing final rule implementing 42 C.F.R. Part 1001); accord Stacy Ann Battle, D.D.S., & Stacy Ann Battle, D.D.S., P.C., DAB No. 1843, at 5, 6 n.3 (2002); Joann Fletcher Cash, DAB No. 1725, at 17 (2000).

The ALJ weighed the two established aggravating factors in 42 C.F.R. § 1001.102(b)(1) and (b)(2) and the mitigating factor of cooperation in 42 C.F.R. § 1001.102(c)(3) and concluded that the 12-year period of exclusion imposed by the I.G. was not unreasonable. See ALJ Decision II at 8-10. Petitioner argues that the ALJ’s determination “upholding [Petitioner’s] 12-year exclusion was . . . erroneous” because it “is unsupported by substantial evidence and . . . contrary to the record evidence,” but Petitioner does not state how the ALJ erred, apart from asserting the existence of an additional mitigating factor in section 1001.102(c)(2), which the ALJ properly rejected as unsubstantiated. A-24-48 P. Post-Remand Br. at 2. Additionally, Petitioner does not discuss or contest the weight assigned to the aggravating factors in sections 1001.102(b)(1) and (b)(2), or to the mitigating factor of cooperation in section 1001.102(c)(3).

We also note that in the initial Board proceedings (Dkt. No. A-23-58), when the I.G. applied the mitigating factor in section 1001.102(c)(3) to reduce the exclusion period from 15 years to 12 years, Petitioner did not ask to file a reply brief, in which he could

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have argued that the I.G. did not give enough weight to the cooperation mitigating factor when reducing the exclusion by three years.¹¹ In other words, Petitioner could have argued, but did not argue, that his cooperation with authorities warranted a reduction of the then 15-year exclusion period by more than three years. Moreover, Petitioner did not attempt to raise this argument before the ALJ on remand (Dkt. No. C-24-52) upon receiving the ALJ’s notice that the ALJ will consider whether the 12-year exclusion period lies within a reasonable range. We therefore presume that Petitioner does not contest the I.G.’s reduction of the exclusion period by three years based on the mitigating factor of cooperation, under section 1001.102(c)(3).

We also conclude that the ALJ’s determination that the 12-year exclusion period is not unreasonable is supported by substantial evidence and free of legal error. We have sustained the ALJ’s findings that the two aggravating factors in sections 1001.102(b)(1) and (b)(2) are established, see DAB No. 3120, and the presence of the mitigating factor of cooperation in section 1001.102(c)(3). The ALJ appropriately determined that the aggravating factor of program loss in section 1001.102(b)(1) is a significant one. The ALJ found that “Petitioner’s conduct ‘caused [financial] loss greater than $1 million to a government health care program,’” which is significantly higher than the $50,000 threshold set in section 1001.102(b)(1) and “represents an ‘exceptional aggravating factor.’” ALJ Decision II at 9 (alteration in original) (quoting C-23-72 I.G. Ex. 2, at 10 (¶ 30); Robinson, DAB No. 1905, at 12). The Board has held that it is “entirely reasonable to consider a program loss” substantially greater than the statutory standard to be “an ‘exceptional aggravating factor’ to be accorded significant weight.” Laura Leyva, DAB No. 2704, at 9-10 (2016) (quoting Sheth, DAB No. 2491, at 7), aff’d, No. 8:16-CV-1986-JDW-AEP, 2017 WL 2868407 (M.D. Fla. Mar. 29, 2017), report and recommendation adopted, No. 8:16-CV-1986-T-27AEP, 2017 WL 2880125 (M.D. Fla. Apr. 24, 2017). The amount of the program loss here is at least 20 times the threshold amount, making it indeed an exceptional aggravating factor to be accorded substantial weight.

We also agree with the ALJ’s assessment of the aggravating factor in section 1001.102(b)(2). The ALJ found that Petitioner’s criminal actions “were committed over more than three years,” much longer than the one-year threshold set in section 1001.102(b)(2), and this “considerable amount of time over which Petitioner perpetrated his fraud scheme demonstrates that his lack of integrity was not ‘short-lived’ and further supports an enhancement to the mandatory minimum five-year period of exclusion.” ALJ Decision II at 9(quoting Burstein, DAB No. 1865, at 8). The duration of Petitioner’s conduct from at least April 2013 through June 2016 is substantially longer than the one-year threshold required by section 1001.102(b)(2), thus evidencing Petitioner’s untrustworthiness. See C-23-72 I.G. Ex. 2, at 5 (¶ 2). As the Board stated in Vinod Chandrashekhar Patwardhan, M.D., DAB No. 2454 (2012), the purpose of this

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aggravating factor “is to distinguish . . . petitioners whose lapse in integrity is short-lived from those who evidence a lack of such integrity over a longer period.” Patwardhan at 7 (quoting Burstein at 8).

Further, the ALJ appropriately evaluated the mitigating factor of cooperation in section 1001.102(c)(3) against the weight of two significant aggravating factors. The ALJ found that “Petitioner’s cooperation, including testifying in a jury trial, resulted in the conviction of another individual,” and the I.G. “sufficiently accounted for Petitioner’s cooperation by applying a three-year downward departure (from 15 to 12 years).” ALJ Decision II at 10. Petitioner gives us no reason for us to disagree with the ALJ that the I.G. “sufficiently accounted for” mitigation evidence in reducing the exclusion period by three years. See Salman Ali, DPT & Roohi Ali, DPT, DAB No. 3048, at 10-12 (2021) (upholding the petitioners’ 20-year and 10-year exclusions and finding that the petitioners’ “cooperation, although significant, does not outweigh the gravity and magnitude of the aggravating factors [of financial loss, duration of criminal acts, and incarceration,] which together reflect [the petitioners’] lack of trustworthiness”), aff’d, No. 21-cv-12365, 2022 WL 3130227 (E.D. Mich. Aug. 4, 2022).

In sum, based on the presence of two significant aggravating factors and one mitigating factor of cooperation, we conclude that the 12-year exclusion the I.G. imposed lies within a reasonable range and that the ALJ’s determination sustaining the 12-year exclusion was supported by substantial evidence and free of legal error.

Conclusion

We affirm ALJ Decision II. Petitioner is excluded from participation in all federal health care programs for 12 years, effective September 20, 2022.

Endnotes

¹ We reference filings in the initial proceedings before the ALJ by docket number C-23-72, filings in the initial appeal to the Board by docket number A-23-58, filings in the proceedings before the ALJ on remand by docket number C-24-52, and the filings in the current proceedings before the Board post-remand by docket number A-24-48.

² The I.G. submitted the August 28, 2023 second amended notice of exclusion to the Board.

³ On January 8, 2024, the ALJ issued an Order to Show Cause why the ALJ should not dismiss the case for abandonment under 42 C.F.R. § 1005.2(e)(3) or as a sanction under 42 C.F.R. § 1005.14(a) because Petitioner missed the January 5, 2024 deadline to file his prehearing exchange. C-24-52 Order to Show Cause at 1. The Order instructed Petitioner that no later than January 18, 2024, Petitioner must file his prehearing exchange and must show good cause for failing to comply with the scheduling order, or the case would be dismissed. Id. On January 10, 2024, Petitioner filed a response to the ALJ’s Order to Show Cause, his brief, and three proposed exhibits (P. Exs. 5-7). On January 11, 2024, the ALJ accepted Petitioner’s response in satisfaction of the Order to Show Cause and discharged that order. C-24-52 Order Discharging the Order to Show Cause at 1.

⁴ One sentence in ALJ Decision II inaccurately refers to the I.G.’s reduction of the exclusion period from “ten years to seven years (three-year reduction)” based on Petitioner’s cooperation with the government. ALJ Decision II at 10. We assume this was an inadvertent error. The I.G. reduced the exclusion period from 15 years to 12 years based on evidence of cooperation. See C-24-52 I.G. Ex. 7.

⁵ The Guidelines are available at https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/procedures/index.html?language=en.

⁶ Section 1001.102(c)(2) states that the requisite condition may be a “physical condition.” Petitioner has never claimed to have had before or during the commission of his offense a “physical condition” as a basis for establishing the mitigating factor and has only argued as having a “mental or emotional condition” associated with trauma as a Vietnam War refugee. See, e.g., C-24-52 P. Remand Br. at 3 (asserting that the “evidence of Petitioner’s mental and emotional condition [is] an additional mitigating factor”); A-24-48 P. Post-Remand Br. at 4 (arguing that the evidence shows that Petitioner’s “mental or emotional condition was definitely factored into the sentence that was imposed”). Accordingly, like the ALJ, we focus on Petitioner’s claim that his “mental or emotional” condition supports mitigation under section 1001.102(c)(2). See 42 C.F.R. § 1005.21(e).

⁷ We note that during the sentencing hearing, Petitioner’s defense attorney mentioned Petitioner’s history of alcohol use. See C-24-52 P. Ex. 5, at 8:4-12 (“Your Honor, my client did have some problems with alcohol for a period of time, as reflected in the pleadings. To his credit, he turned away from alcohol and got involved with his primary religion, which is Buddhism, and has been - has -- no longer drinks alcohol, no longer does anything of a mood affecting substance . . . .”). However, the defense attorney did not argue Petitioner was less culpable for his crimes because of his alcohol use, nor does the transcript indicate that the sentencing judge specifically considered alcohol use as a factor that diminished culpability.

⁸ Additionally, Petitioner’s sentence to 12 months of home detention appears to be within the sentencing guidelines range of 10 to 16 months, as indicated by the sentencing judge, and in between the defense’s recommended sentence of 10 months and the government’s recommended sentence of 24 months. See C-24-52 P. Ex. 5, at 27:8-9, 28:4-22. This tends to be consistent with the I.G.’s argument that Petitioner’s sentence does not appear to have been particularly lenient. In any case, we see no indication in the transcript that the judge reduced the length of the sentence or chose to impose supervised release and home detention instead of incarceration in a prison facility because the judge found reduced culpability as a result of any condition Petitioner had before or during his commission of the crime.

⁹ Petitioner also quotes out of context Peavy v. Cate, No. 09-CV-2328 JLS POR, 2012 WL 3150956 (S.D. Cal. Aug. 1, 2012), which was a case where a criminal defendant sought habeas corpus relief from a state court conviction: “Here, the record reflects that the state court gave a lower sentence than [the defendant’s] criminal history could have warranted, and that the court discussed its reasons for striking [the defendant’s] two priors.” 2012 WL 3150956, at *6; see A-24-48 P. Post-Remand Br. at 6. Petitioner does not clearly explain why this language from Peavy supports his argument. In any event, the fact that a California state court judge reduced a criminal defendant’s sentence for reasons specific to that case does nothing to persuade us that the judge who sentenced Petitioner found Petitioner less culpable to substantiate the mitigating factor in section 1001.102(c)(2).

¹⁰ To be clear, the I.G. imposed an exclusion after, and based on, Petitioner’s felony conviction and the imposition of a sentence for that conviction. Accordingly, when the judge imposed the sentence on Petitioner, the judge could not have been considering specifically whether Petitioner was less culpable for purposes of possible mitigation under section 1001.102(c) should the I.G. decide to exclude Petitioner based on the felony conviction, for a period longer than the mandatory minimum.

¹¹  The Board notified the parties that, on request, the Board may permit Petitioner to file a reply brief. See A-23-58 Board’s July 31, 2023 letter at 2; 42 C.F.R. § 1005.21(c).