Dubin v. United States: Supreme Court limits scope of “aggravated identity theft”

By Greg Mermelstein, Deputy Director & General Counsel, Missouri Public Defender

The federal sentencing enhancement for “aggravated identity theft” requires that the misuse of another person’s identity be “at the crux” of the underlying criminal offense, not merely ancillary to it, the U.S. Supreme Court held June 8 in Dubin v. United States.

David Dubin, who managed a psychological services company, overbilled Medicaid by $338. He was convicted of healthcare fraud as an underlying offense, and “aggravated identity theft” under 18 U.S.C. Sec. 1028A(a)(1).

“Aggravated identity theft” is a sentence enhancement requiring a two-year mandatory prison sentence when a defendant “during and in relation to any [predicate offense], knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person.”

The Government claimed “aggravated identity theft” applied to Dubin because he used a patient’s Medicaid number – a means of identification – to submit a fraudulent bill.

Dubin claimed the statute requires the use of the means of identification be at the crux of what makes the underlying offense criminal, rather than merely ancillary to it.

The District Court and Fifth Circuit sided with the Government.

The Supreme Court granted cert. to resolve a circuit split.

Holding

The Court, in an opinion joined by eight justices with the ninth concurring, held the statute requires the use of identification be “at the crux” of the underlying offense.

The Court began by noting that the Government’s interpretation was “boundless.”

Under the Government’s interpretation, “as long as a billing or payment method employs another person’s name or other identifying information, that is enough”, the Court said. “A lawyer who rounds up her hours from 2.9 to 3 and bills her client electronically has committed aggravated identity theft. The same is true of a waiter who serves flank steak but charges for filet mignon using an electronic payment method.”

The Government has used the statute “well beyond ordinary understandings of identity theft”, the Court said. “One prosecution targeted a defendant who made a counterfeit handgun permit for another person, using that person’s real name and at that person’s request.”

But “the text and context of the statute do not support such a boundless interpretation”, the Court said. These “point to a narrower reading, one centered around the ordinary understanding of identity theft.”

“Identity theft” has a “focused meaning”, the Court said. Dictionary definitions define it as “a crime in which someone steals personal information about and belonging to another, such as a bank account number or driver’s license number, and uses it to deceive others.”

“This supports a reading of ‘in relation to’ where use of the means of identification is at the crux of the underlying criminality”, the Court said.

The statute focuses on “what the defendant does with the means of identification”, the Court said. “In other words, the means of identification specifically is a key mover in the criminality.”

“This central role played by the means of identification … explains why we say that the ‘identity’ itself has been stolen”, the Court said.

“If a lawyer rounds up her hours from 2.9 to 3 and bills her client using his name, the name itself is not specifically the source of fraud; it only plays an ancillary role in the billing process”, the Court explained. “The same is true for the waiter who substitutes one cut of meat for another; we might say the filet mignon’s identity was stolen, perhaps, but not the diner’s.”

“This understanding of identity theft also supports a more targeted definition of ‘uses’”, the Court said. “Identity theft is committed when a defendant uses the means of identification itself to defraud or deceive.”

The statute is also designed to be an enhancement for the most serious conduct, the Court noted. But the Government’s broad reading essentially makes it apply “automatically” to many offenses.

“A far more sensible conclusion from the statutory structure is that Sec. 1028A(a)(1)’s enhancement is not indiscriminate, but targets situations where the means of identification itself plays a key role – one that warrants a 2-year mandatory minimum”, the Court said.

“If more were needed, a final clue comes from the staggering breadth of the Government’s reading”, the Court said. Federal statutes must be interpreted to give “fair warning” that “the common world will understand of what the law intends to do if a certain line is passed.”

“Finally, the Government makes a familiar plea: There is no reason to mistrust its sweeping reading, because prosecutors will act responsibly”, the Court said. “To this, the Court gives a just as familiar response: We cannot construe a criminal statute on the assumption that the Government will ‘use it responsibly.’”

Here, Dubin’s use of the patient’s name and Medicaid number was not “at the crux of what made the underlying overbilling fraudulent”, the Court concluded. These were “ancillary” features of the billing method employed.

Concurring Opinion

In a concurring opinion, Justice Gorsuch said “the Court has stumbled upon a more fundamental problem” with the statute.

The statute “is not much better than a Rorschach test”, he said. “Depending on how you squint your eyes, you can stretch (or shrink) its meaning to convict (or exonerate) just about anyone”, he said. “Truly, the statute fails to provide even rudimentary notice of what it does and does not criminalize.”

“We have a term for laws like that”, he said. “We call them vague. And in our constitutional order, a vague law is no law at all.”

“To satisfy the constitutional minimum of due process” statutes “must at least provide ‘ordinary people’ with ‘fair notice of the conduct they punish’”, Gorsuch said.

He predicted the Court would revisit the statute in the future.