Sunday, September 15, 2019

Case o' The Week: Ninth Needles Government - Hong and "Use" in Section 1028A

Judge Paez drives the point home, in a case of first impression.

United States v. Hong, 2019 WL 4315165 (9th Cir. Sept. 12, 2019), decision available here.

Players: Decision by Judge Paez, joined by Judges Clifton and D.J. England. Big win for former CD Cal AFPD Carlton Gunn.   

Facts: Hong owned and operated massage and acupuncture clinics. Id. at *1. He gave his patients’ Medicare-eligibility info and identities to physical therapy companies, who then billed Medicare. Id.
  In reality, however, the clients received massage and acupuncture (not covered by Medicare), and essentially no physical therapy (covered by Medicare). Id. at *2. Hong received the majority of the Medicare payments. Id. Notably, this is what the patients wanted – they came seeking massage and acupuncture, not physical therapy. Id.
  Hong was charged, tried, and convicted of fraud and kickback counts, and of two counts of aggravated identity theft. Id. at *3. “The government alleged that Hong used the names and Medicare-eligibility information of patients to submit, with the help of his co-schemers, claims for benefits without lawful authority.” Id. at *7.

Issue(s): “Hong argues there was insufficient evidence of aggravated identity theft [because] . . . this fraudulent billing does not constitute a ‘use’ of the patients’ identities within the meaning of the aggravated identity theft statute.” Id. “[This] argument presents a new question for our court: whether the fraudulent billing demonstrated in this case constitutes a ‘use’ of the patients’ identities under section 1028A.” Id.

Held: Hong provided massage services to patients to treat their pain, and then participated in a scheme where that treatment was misrepresented as a Medicare-eligible physical therapy service . . . Neither Hong nor the physical therapists ‘attempt[ed] to pass themselves off as the patients.’ . . . . Hong’s fraudulent scheme ran afoul of other statutes—namely, health care fraud and unlawful remunerations—but not section 1028A. We hold that Hong did not ‘use’ the patients’ identities within the meaning of the aggravated identity theft statute. Accordingly, we reverse Hong’s [agg ID] convictions . . . . .” Id. (citations omitted).
   “Hong participated in and, through kickbacks, profited from a health care fraud scheme. His conduct, however, falls short of aggravated identity theft as it is contemplated in the statute. We therefore reverse Hong’s convictions for aggravated identity theft and remand for resentencing.” Id. at *9.   

Of Note: Section 1028A is the infernal “agg ID theft” statute. Carrying a two-year mand-min, it is a charge frequently abused by the government. See, e.g., United States v. Bercovich, 615 Fed.Appx. 416 (9th Cir. 2015), mem. (permitting § 1028A counts where identities were used with the person’s active consent). Hong is thus particularly welcome -- a rare appellate limitation for this generally boundless offense.
  In Hong, Judge Paez carefully analyzes the word “use” in the agg ID statute, and recounts with approval the approaches of the First and Sixth Circuits (both of which reject § 1028A charges in this context). Hong, 2019 WL 4315165 at *7-*8.
  Beware of the boundaries of Hong’s new rule –convictions can be upheld where there was impersonation or forgery. Id. at *8 & n.8. Nonetheless, any limit is a good limit: Hong helps.

How to Use: Must one argue all defense theories when moving for a Rule 29 dismissal? When that didn’t happen in Hong, the government argued that several appellate theories were waived. See id. at *5 (discussing Graf). 
  Federal trial attorneys should read Hong’s Rule 29 discussion carefully: if we articulate a specific Rule 29 theory at trial, our appellate comrades will thank us later if we try to articulate them all.
For Further Reading: Az Appellate AFPD Keith Hilzendeger found a hen’s tooth: a full week’s calendar staffed by Ninth judges. See Ninth Circuit calendar here.  No visiting judges, no D.J.s, see blog entries here, just Western appellate judges. 
  This feat was made possible with the influx of Trump-nominated jurists: Judges Miller, Bennett, and Bade all sat on this Pasadena calendar.

Steven Kalar, Federal Public Defender N.D. Cal. Website at


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