David L. Gordon, M.D., CR No. 327 (1994)

$05:Exclusion Case

Department of Health and Human Services

DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

In the Case of: David L. Gordon, M.D., Petitioner,
- v. -
The Inspector General.

DATE: August 16, 1994

Docket No. C-94-035
Decision No. CR327

DECISION

By letter dated October 15, 1993 (Notice), the Inspector General
(I.G.) of the United States Department of Health and Human Services
(DHHS) notified David L. Gordon, M.D., (Petitioner), that he was
being excluded from participation in the Medicare, Medicaid,
Maternal and Child Health Services Block Grant and Block Grants to
States for Social Services programs for a period of ten years. 1/
The I.G. advised Petitioner that he was being excluded pursuant to
section 1128(a) of the Social Security Act (Act), based on his
conviction of a criminal offense related to the delivery of an item
or service under the Medicaid program.

The I.G. advised Petitioner further that, in cases of exclusions
imposed pursuant to section 1128(a) of the Act, section
1128(c)(3)(B) of the Act requires a minimum exclusion of five
years. However, the I.G. determined to exclude Petitioner for ten
years after taking into consideration the following allegations,
which were recited in the Notice: (1) Financial damage to the
programs related to the criminal activity was over $1,000,000; (2)
the criminal acts that resulted in the conviction, or similar acts,
were committed over a period of two years; (3) Petitioner was
sentenced to serve one to three years in a New York State
Correctional Facility.
Petitioner requested a hearing, and the case was assigned to me.
I convened prehearing conferences by telephone on December 30, 1993
and March 7, 1994. During the conference calls, Petitioner
contended that his penalty was excessive. At the first telephone
conference call on December 30, Petitioner argued that it was a
mitigating factor that he might never be incarcerated. At the
March 7 conference call, Petitioner argued also that the mitigating
factor found at 42 C.F.R. 1001.102(c)(2) was present. Also
during that conference, Petitioner stated that he had recently been
incarcerated. Order and Notice of Hearing, dated January 7, 1994;
Amended Prehearing Order & Ruling, dated March 17, 1994.

At the conference calls, the I.G. alleged that two more aggravating
factors were applicable to Petitioner's case, in addition to the
three that had been alleged in the Notice. The I.G. identified the
two additional aggravating factors to be those found at 42 C.F.R.
1001.102(b)(5) and (6). The I.G. argued that these aggravating
factors warrant a substantial period of exclusion. The I.G.
contended that no mitigating factors are present in this case. Id.


At the telephone conference call held on March 7, I issued an oral
ruling concerning Petitioner's request to present witnesses at a
hearing. I ruled that the testimony of Petitioner's proposed 30
character witnesses would not be relevant under the current federal
regulations. I stated that I would allow Petitioner to submit
affidavits from the 30 witnesses for the purpose of preserving
Petitioner's rights on appeal. Petitioner agreed to submit
affidavits in lieu of testimony. Additionally, I allowed
Petitioner to submit affidavits or other proof concerning any of
the aggravating or mitigating factors alleged or to establish the
need for an in-person hearing. Amended Prehearing Order & Ruling,
dated March 17, 1994.

At the March 7 conference call, the parties agreed to proceed on a
documentary record. Id.

In January 1994, the I.G. filed a brief in support of her motion
for summary disposition which was accompanied by proposed findings
of fact and conclusions of law and 15 exhibits. In his response,
filed in May 1994, Petitioner argued that his cooperation with
authorities should be a mitigating factor. Petitioner filed four
exhibits pertaining to his character and reputation. The I.G.
filed a reply arguing that Petitioner did not cooperate within the
meaning of the current regulations and that character evidence is
irrelevant.


ADMISSIONS

Petitioner admits that (1) he was "convicted" of a criminal
offense; (2) his conviction related to the delivery of an item or
service under Medicaid; and (3) he is subject to a five-year
minimum mandatory exclusion. Order and Notice of Hearing, dated
January 7, 1994; Amended Prehearing Order & Ruling, dated March 17,
1994.
In addition, Petitioner admits that the following three aggravating
factors are present in this case: (1) the acts resulting in
Petitioner's conviction resulted in a financial loss to Medicaid of
$1500 or more (42 C.F.R. 1001.102(b)(1)); (2) the sentence
imposed by the court included incarceration (42 C.F.R.
1001.102(b)(4)); and (3) Petitioner was overpaid a total of $1500
or more by Medicare or State health care programs as a result of
improper billings (42 C.F.R. 1001.102(b)(6)). Id.

EXHIBITS

At the March 7 telephone conference call, Petitioner expressed
specific objections to I.G. Exhibits (I.G. Ex.) 3, 5, 9, 10, and
12. I overruled Petitioner's objections and admitted I.G. Ex. 3,
5, 9, 10, and 12. Petitioner stipulated to the admission of the
remaining I.G. exhibits. Accordingly, I admitted also I.G. Ex. 1,
2, 4, 6, 7, 8, 11, 13, 14, and 15 into evidence.

Petitioner submitted four exhibits with his response. I admit
Petitioner's Exhibits (P. Ex.) 1-4 into evidence.


ISSUE

Whether the ten-year exclusion directed and imposed against
Petitioner by the I.G. is reasonable.


FINDINGS OF FACT AND CONCLUSIONS OF LAW (FFCL) 2/

Having considered the entire record, the arguments, and the
submissions of the parties, and being advised fully, I make the
following Findings of Fact and Conclusions of Law:

1. At all times relevant to this case, Petitioner was a medical
doctor with a specialty in radiology licensed to practice in New
York State (NYS). I.G. Ex. 2, 3, 10.

2. By letter dated September 12, 1990, the NYS Department of
Social Services (DSS) excluded Petitioner from NYS Medicaid for
five years. I.G. Ex. 1.

3. Petitioner was ordered to pay restitution to NYS Medicaid in
the amount of $608,333 plus interest. I.G. Ex. 1.

4. Petitioner was excluded from NYS Medicaid because of his filing
of false Medicaid claims, his unacceptable recordkeeping, and his
furnishing excessive services during the period March 1988 through
February 1989. I.G. Ex. 1.

5. In 1991, Petitioner was indicted by a grand jury of Queens
County, New York, on one count of grand larceny in the first degree
and 24 counts of offering a false instrument for filing in the
first degree. I.G. Ex. 2-4.
6. According to the indictment, NYS Medicaid paid Petitioner more
than one million dollars to which he was not entitled based on his
knowing submission of false reimbursement claims. I.G. Ex. 2, 3.


7. According to the indictment, the alleged offenses committed by
Petitioner took place from on or about March 1, 1988 to on or about
February 12, 1990. I.G. Ex. 2.

8. On October 28, 1992, Petitioner, with the assistance of
counsel, entered into a plea bargain agreement; Petitioner pled
guilty to one "C" felony count of grand larceny in the second
degree, in full satisfaction of the 25-count indictment. I.G. Ex.
5, 6, 8; Order and Notice of Hearing, dated January 7, 1994;
Amended Prehearing Order & Ruling, dated March 17, 1994; see I.G.
Ex. 10.
9. In pleading guilty to the grand larceny count, Petitioner
admitted that he had knowingly submitted false claims to NYS
Medicaid during the period March 1, 1988 to February 12, 1990.
I.G. Ex. 5, 6, 8.

10. In pleading guilty, Petitioner admitted that he knowingly and
illegally received over $50,000 from NYS Medicaid during the period
March 1, 1988 to February 12, 1990. I.G. Ex. 5, 6.

11. Pursuant to the plea agreement, Petitioner agreed to provide
NYS with a confession of judgment in the amount of $500,000 as
restitution to NYS Medicaid. I.G. Ex. 5, 6, 8; see I.G. Ex. 10.

12. On April 9, 1993, the court sentenced Petitioner to a prison
term of one to three years; the court stayed Petitioner's
incarceration pending appeal. I.G. Ex. 5, 9; see I.G. Ex. 10.

13. On April 9, 1993, Petitioner provided NYS with a signed
confession of judgment in the amount of $500,000. I.G. Ex. 5, 8,
9.

14. Petitioner has not paid NYS any part of the $500,000
restitution amount. I.G. Ex. 5, 9, 12.

15. Petitioner appealed his sentence and made a motion for a
reduced sentence. I.G. Ex. 5, 11.

16. The Office of the New York State Special Prosecutor for
Medicaid Fraud Control ("Special Prosecutor") opposed Petitioner's
motion for a reduced sentence. I.G. Ex. 5, 12.

17. By decision and order dated December 6, 1993, the New York
State Supreme Court, Appellate Division: Second Department,
affirmed Petitioner's sentence. I.G. Ex. 13.

18. On January 25, 1994, Petitioner was ordered to begin his
prison sentence on February 28, 1994. I.G. Ex. 5.

19. By letter dated October 15, 1993, the I.G. notified Petitioner
that he was being excluded pursuant to sections 1128(a) and
1128(c)(3)(B) of the Act for a period of ten years, based on his
conviction of a criminal offense related to the delivery of an item
or service under the Medicaid program.

20. By letter dated December 13, 1993, Petitioner requested a
hearing to contest his exclusion.

21. The Secretary of DHHS (Secretary) has delegated to the I.G.
the authority to determine, impose, and direct exclusions pursuant
to section 1128 of the Act. 48 Fed. Reg. 21,662 (1983).

22. The I.G. had authority to impose and direct an exclusion
against Petitioner pursuant to sections 1128(a)(1) and
1128(c)(3)(B) of the Act. FFCL 1-21.

23. The regulations published on January 29, 1992 include criteria
to be employed by the I.G. in determining to impose and direct
exclusions pursuant to sections 1128(a)(1) and 1128(c)(3)(B) of the
Act. 42 C.F.R. 1001.101, 1001.102.

24. On January 22, 1993, the Secretary published a regulation
which directs that the criteria to be employed by the I.G. in
determining to impose and direct exclusions pursuant to section
1128 of the Act are binding also upon administrative law judges,
appellate panels of the Departmental Appeals Board, and federal
courts in reviewing the imposition of exclusions by the I.G. 42
C.F.R. 1001.1(b); 58 Fed. Reg. 5617, 5618 (1993).

25. My adjudication of the length of the exclusion in this case is
governed by the criteria contained in 42 C.F.R. 1001.101 and
1001.102. FFCL 23, 24.

26. An exclusion imposed pursuant to section 1128(a)(1) of the Act
must be for a period of at least five years. Act, sections
1128(a)(1), 1128(c)(3)(B); 42 C.F.R. 1001.102(a).

27. An exclusion imposed pursuant to section 1128(a)(1) of the Act
may be for a period in excess of five years if there exist
aggravating factors which are not offset by mitigating factors.
42 C.F.R. 1001.102(b), (c).

28. Aggravating factors which may form a basis for imposing an
exclusion in excess of five years against a party pursuant to
section 1128(a)(1) of the Act may consist of any of the following:

a. The acts resulting in a party's conviction, orsimilar
acts, resulted in financial loss to Medicareand Medicaid of $1500
or more.

b. The acts that resulted in a party's conviction,or similar
acts, were committed over a period of oneyear or more.

c. The acts that resulted in a party's conviction,or similar
acts, had a significant adverse physical,mental, or financial
impact on one or more programbeneficiaries or other individuals.

d. The sentence which a court imposed on a partyfor the
above-mentioned conviction includedincarceration.

e. The convicted party has a prior criminal, civil,or
administrative sanction record.

f. The convicted party was overpaid a total of$1500 or more
by Medicare or Medicaid as a result ofimproper billings.

42 C.F.R. 1001.102(b)(1) - (6) (paraphrase).

29. Mitigating factors which may offset the presence of
aggravating factors may consist of only the following:

a. A party has been convicted of three or fewermisdemeanor
offenses, and the entire amount offinancial loss to Medicare and
Medicaid due to theacts which resulted in the party's conviction
andsimilar acts, is less than $1500.

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

c. The party's cooperation with federal or Stateofficials
resulted in others being convicted ofcrimes, or in others being
excluded from Medicare orMedicaid, or in others having imposed
against them acivil money penalty or assessment.

42 C.F.R. 1001.102(c)(1) - (3) (paraphrase).

30. In evaluating the reasonableness of the ten-year exclusion, it
is necessary to weigh the evidence relevant to the aggravating and
mitigating factors enumerated in the regulations in a manner that
is consistent with the goals of the Act.

31. On January 13, 1994, Petitioner, with counsel, met with the
Special Assistant Attorney General, Special Prosecutor's office.
I.G. Ex. 5.

32. Petitioner admitted that the information he gave to the
Special Prosecutor's office in the meeting of January 13, 1994, did
not result in the conviction, exclusion, or imposition of civil
monetary penalties upon others. P. Br. at 1; I.G. Ex. 5.

33. The mitigating factor of cooperation listed at 42 C.F.R.
1001.102(c)(3) has not been proven by Petitioner in this case.
FFCL 32.

34. There is no evidence that, as 42 C.F.R. 1001.102(c)(2)
requires, the criminal court made a finding on the record, that
before or during the commission of his crimes, Petitioner suffered
from a mental, emotional, or physical condition that reduced his
culpability. I.G. Ex. 5, 6, 9, 15.

35. The mitigating factor listed at 42 C.F.R. 1001.102(c)(1),
is not present in this case. FFCL 34.

36. Petitioner was convicted of a criminal offense related to the
delivery of an item or service under the Medicaid program, within
the meaning of section 1128(a)(1) of the Act. FFCL 5-18; Order and
Notice of Hearing, dated January 7, 1994; Amended Prehearing Order
& Ruling, dated March 17, 1994.

37. Petitioner is subject to an exclusion of at least five years.
Act, sections 1128(a)(1), 1128(c)(3)(B); FFCL 36.

38. Petitioner has admitted that the aggravating factor listed at
42 C.F.R. 1001.102(b)(1) is present. Order and Notice of
Hearing, dated January 7, 1994; Amended Prehearing Order & Ruling,
dated March 17, 1994.

39. Petitioner has admitted that the aggravating factor listed at
42 C.F.R. 1001.102(b)(4) is present. Amended Prehearing Order
& Ruling, dated March 17, 1994.

40. Petitioner has admitted that the aggravating factor listed at
42 C.F.R. 1001.102(b)(6) is present. Amended Prehearing Order
& Ruling, dated March 17, 1994.

41. The crimes which Petitioner perpetrated against NYS Medicaid
were committed during the period March 1, 1988 to February 12,
1990. FFCL 4, 7, 9, 10.

42. That the criminal conduct for which Petitioner was convicted
was committed over a period exceeding one year is an aggravating
factor that justifies excluding Petitioner for more than five
years. FFCL 41; 42 C.F.R. 1001.102(b)(2).

43. The sanction imposed upon Petitioner by NYS DSS in September
1990, which consisted of exclusion from Medicaid and the
requirement to pay restitution of $608,333 plus interest,
constitutes a prior administrative sanction. FFCL 2-4.

44. Petitioner's prior administrative sanction record is an
aggravating factor that justifies excluding Petitioner for more
than five years. FFCL 43; 42 C.F.R. 1001.102(b)(5).

45. A remedial purpose of section 1128 of the Act is to protect
the integrity of federally-funded health care programs and the
welfare of beneficiaries and recipients of such programs from
individuals and entities who have been shown to be untrustworthy.
See S. Rep. No. 109, 100th Cong., 1st Sess. 1 (1987), reprinted in
1987 U.S.C.C.A.N. 682.

46. The aggravating factors specified at 42 C.F.R.
1001.102(b)(1), (2), (4), (5), and (6) are present in this case.
FFCL 38-40, 42, 44.

47. The aggravating factors present in this case establish that
Petitioner committed serious criminal offenses which damaged the
integrity of federally-financed health care programs. FFCL 46.

48. The aggravating factors present in this case establish
Petitioner to be a threat to the integrity of federally-financed
health care programs. FFCL 46, 47.

49. Petitioner did not prove the presence of any mitigating
factors which may be used as a basis for offsetting aggravating
factors. FFCL 33-35; 42 C.F.R. 1001.102(c)(1) - (3).

50. In the absence of any offsetting mitigating factors, the
aggravating factors present in this case justify excluding
Petitioner for more than five years. FFCL 46, 49; 42 C.F.R.
1001.102(b)(1)-(2), (4)-(6).

51. The aggravating factors present in this case establish that a
ten-year exclusion is reasonable to satisfy the remedial purposes
of the Act. FFCL 27-30, 46.


DISCUSSION

Petitioner admitted that he was convicted of a criminal offense
related to the delivery of an item or service under Medicaid,
within the meaning of section 1128(a)(1) of the Act. Admissions
supra p.3. In addition, Petitioner does not dispute that the Act
requires that he be excluded for a minimum of five years, based on
his conviction of a program-related offense. Id.

Petitioner's criminal conduct involved falsely billing Medicaid in
a sonogram fraud scheme. Between 1988 and 1990, Petitioner
knowingly and illegally received large sums of money from NYS
Medicaid through this scheme. FFCL 3, 4, 6, 10, 11, 13. Pursuant
to the plea agreement, Petitioner agreed to pay restitution of
$500,000 to NYS Medicaid. FFCL 11, 13. Petitioner has failed to
pay NYS one cent of the $500,000 restitution amount. FFCL 14. 3/

The I.G.'s exclusion of Petitioner for ten years is reasonable for
the following reasons.

I. In evaluating the reasonableness of the ten-year exclusion, I
must weigh the evidence relevant to the aggravating and mitigating
factors enumerated in the regulations in light of the goals of the
Act.

My adjudication of the reasonableness of the length of the
exclusion in this case is governed by the criteria contained in the
Secretary's implementing regulations that were initially published
on January 29, 1992 and subsequently clarified on January 22, 1993.
42 C.F.R. Part 1001; 42 C.F.R. 1001.1(b). The I.G. contends
that a ten-year exclusion is reasonable pursuant to the criteria
for determining the length of exclusions contained in the
regulations. Petitioner contends that the ten-year exclusion
imposed by the I.G. is excessive.

As I stated in Paul G. Klein, D.P.M., DAB CR317 (1994),
the regulations governing exclusions imposed pursuant to section
1128(a)(1) of the Act are contained in 42 C.F.R. 1001.101 and
1001.102. The standard for adjudication contained in the
regulations mandates that, in cases of exclusions imposed pursuant
to section 1128(a)(1), the minimum exclusion imposed must be for no
less than five years. The regulations incorporate the minimum
exclusion period mandated by section 1128(c)(3)(B) of the Act for
exclusions imposed pursuant to section 1128(a)(1). In addition,
the regulations provide that, in appropriate cases, exclusions
imposed pursuant to section 1128(a)(1) may be for more than five
years. Such exclusions may be appropriate where there exist
aggravating factors (identified by 42 C.F.R. 1001.102(b)) that
support a lengthening of the exclusion while taking into
consideration any mitigating factors which might be present
(identified by 42 C.F.R. 1001.102(c)).

The regulations specifically identify those factors which may be
classified as aggravating and those factors which may be classified
as mitigating. Under the regulatory scheme, evidence which relates
to factors which are not among those specified as aggravating and
mitigating is not relevant to adjudicating the length of an
exclusion and cannot be considered. 4/

Section 1128 of the Act is a civil statute and Congress intended it
to be remedial in application. The remedial purpose of the
exclusion law is to protect the integrity of federally financed
health care programs and the welfare of the programs' beneficiaries
and recipients. The exclusion law is intended to protect program
funds and beneficiaries and recipients from providers who have
demonstrated by their conduct that they pose a threat to the
integrity of such funds, or to the well-being and safety of
beneficiaries and recipients. See S. Rep. No. 109, 100th Cong.,
1st Sess. 1 (1987), reprinted in 1987 U.S.C.C.A.N. 682. In view of
the fact that the regulations' intent is to implement the Act's
remedial purpose, I must decide, using the regulatory factors,
whether an exclusion is reasonably necessary to protect the
integrity of federally-financed health care programs and the
welfare of the programs' beneficiaries and recipients. William F.
Middleton, DAB CR297, at 8 (1993) (appellate panel declined review,
Feb. 7, 1993).

My authority in hearing and deciding cases pursuant to section 1128
of the Act remains de novo. See section 205(b) of the Act as
incorporated by section 1128(f) of the Act; 42 C.F.R. 1005.20.
I am not charged with an appellate review of the I.G.'s actions,
nor am I directed to conduct an inquiry as to whether the I.G.'s
agent has discharged his or her duty competently in a particular
case. The purpose of my inquiry is not to determine how accurately
the I.G. applied the law to the evidence which was before the I.G.
Instead, the purpose of my inquiry is to evaluate the
reasonableness of the exclusion de novo. Klein, DAB CR317, at 11.


II. The aggravating factors present in this case are a basis for
lengthening the period of exclusion beyond the minimum period of
five years.

In the present case, the I.G. contends that the following five
aggravating factors are present in this case: (1) Petitioner was
convicted of a program-related offense involving a financial loss
to the Medicaid program in an amount greater than or equal to $1500
within the meaning of 42 C.F.R. 1001.102(b)(1); (2) the crimes
engaged in by Petitioner were perpetrated by him over a period of
one year or more within the meaning of 42 C.F.R. 1001.102(b)(2);
(3) Petitioner's sentence included a period of incarceration within
the meaning of 42 C.F.R. 1001.102(b)(4); (4) Petitioner has a
prior administrative sanction record within the meaning of 42
C.F.R. 1001.102(b)(5); and (5) Petitioner was overpaid a total
of $1500 or more by Medicaid as a result of improper billings
within the meaning of 42 C.F.R. 1001.102(b)(6). 5/

Petitioner admitted that the aggravating factors listed at 42
C.F.R. 1001.102(b)(1), (4), and (6) are present in this case.
FFCL 38-40. Since the existence of these three aggravating factors
is undisputed, it is possible to lengthen the period of exclusion
beyond the minimum five-year period. In addition, I find that the
I.G. has proved the existence of the other two aggravating factors
alleged, listed at 42 C.F.R. 1001.102(b)(2) and (5).

In pleading guilty to the grand larceny count, Petitioner admitted
that he had knowingly submitted false claims to NYS Medicaid during
the period March 1, 1988 to February 12, 1990. FFCL 9. Petitioner
admitted also that he knowingly and illegally received over $50,000
from NYS Medicaid during March 1, 1988 to February 12, 1990. FFCL
10. Thus, by his own admission, Petitioner engaged in a scheme
against NYS Medicaid which spanned a period of almost two years.
Accordingly, the second aggravating factor cited by the I.G., that
Petitioner's criminal activity last a year or more, has been met.
FFCL 41, 42; 42 C.F.R. 1001.102(b)(2).

In addition, the fourth aggravating factor cited by the I.G., that
there exists a prior administrative sanction record, is met in this
case. 42 C.F.R. 1001.102(b)(5). By letter dated September 12,
1990, the NYS DSS excluded Petitioner from NYS Medicaid for five
years. FFCL 2.
Petitioner was ordered to pay restitution to NYS Medicaid in the
amount of $608,333 plus interest. FFCL 3. According to the
letter, Petitioner was excluded from NYS Medicaid because of his
filing of false Medicaid claims, his unacceptable recordkeeping,
and his furnishing excessive services during the period March 1988
through February 1989. FFCL 4. This sanction imposed upon
Petitioner by NYS DSS, which occurred approximately three years
prior to the I.G.'s exclusion of Petitioner, constitutes a prior
administrative sanction of Petitioner even though it arose out of
basically the same set of circumstances cited by the I.G. FFCL 43.
Thus, the aggravating factor set forth at 42 C.F.R.
1001.102(b)(5) has been satisfied. FFCL 44.

The weight of the five aforementioned aggravating factors, singly
and together, establishes Petitioner to be a highly untrustworthy
individual. Through his deliberate, larcenous actions in filing
numerous false Medicaid claims over almost two years, Petitioner
cost the Medicaid program an enormous sum of money.

The presence of the aggravating factors listed at 42 C.F.R.
1001.102(b)(1), (2), (4)-(6) in this case leads to the conclusion
that Petitioner has been and remains capable of engaging in
criminal misconduct that causes great damage to the financial
integrity of the Medicaid program. As I have stated before, the
purpose of the exclusion law is to protect public health funds from
unscrupulous providers. In view of the foregoing, I conclude that
absent any mitigating evidence, the minimum five-year exclusion is
not sufficient to protect the federally-financed health care
programs in this case. The aggravating factors present in this
case justify an exclusion substantially longer than five years.

III. There are no mitigating factors present in this case.

The regulatory scheme which governs this case provides that only if
there are aggravating factors which justify an exclusion longer
than five years may mitigating factors be considered as a basis for
reducing the period of exclusion to no less than five years. Only
the mitigating factors identified by the regulations may be
considered to reduce the period of exclusion. FFCL 29; 42 C.F.R.
1001.102(c). Since the aggravating factors in this case justify an
exclusion substantially longer than five years, the specified
mitigating factors, if present, may be considered.

Petitioner contends that the ten-year exclusion imposed by the I.G.
is "excessive and unreasonable", and that I should consider
Petitioner's cooperation with the Special Prosecutor's office as a
mitigating factor. P. Br. at 1. As set forth at 42 C.F.R.
1001.102(c)(3), it is a mitigating factor when:

The party's cooperation with federal or State officials
resulted in others being convicted of crimes, or in others being
excluded from Medicare or Medicaid, or in others having imposed
against them a civil money penalty or assessment.

Petitioner, with counsel, met with the Special Assistant Attorney
General, Special Prosecutor's office, on January 13, 1994. FFCL
31. Petitioner admitted that the information he gave the Special
Prosecutor's office in that meeting did not result in the
conviction, exclusion, or imposition of civil monetary penalties
upon others. FFCL 32. Petitioner contends, however, that he
cooperated "to the best of his abilities." P. Br. at 2.
I find that Petitioner's cooperation has failed to satisfy the
requirements of 42 C.F.R. 1001.102(c)(3). By his own admission,
Petitioner acknowledged that any information he gave to the Special
Prosecutor's office did not lead to the conviction or exclusion of
others, as required by the regulation. Additionally, in his
affidavit of January 1994, the Special Assistant Attorney General
unequivocally stated that Petitioner never cooperated with his
office during the criminal investigation, prosecution, and appeal.
I.G. Ex. 5. It was only after the Appellate Division affirmed
Petitioner's sentence that Petitioner sought a meeting with the
Special Assistant Attorney General. In his affidavit, the Special
Assistant Attorney General stated that the information given by
Petitioner "has not led" and "[would] not lead" to others being
convicted or excluded. Id. at 4. The mitigating factor listed at
42 C.F.R. 1001.102(c)(3) thus does not exist in this case. FFCL
33.

Petitioner has submitted evidence relating to his character and
reputation, contending that such evidence should be viewed as
mitigating. 6/ However, such general character evidence does not
fall within the parameters of any of the three mitigating factors
set forth in the regulations. Under the regulatory scheme, such
evidence is not relevant to my adjudication of the length of
Petitioner's exclusion and cannot be considered. Even if I were to
consider such character evidence as relevant and probative, which
I do not, Petitioner's submission of character evidence is a weak
attempt to minimize his highly egregious acts against NYS Medicaid.
In the face of the evidence submitted by the I.G., Petitioner's
submission of character evidence is akin to placing a handful of
feathers on one side of a scale and hoping it will balance a
boulder on the opposite side of the scale.
In view of the foregoing, the evidence of record fails to show that
there is even one mitigating factor present in this case. FFCL 49.

IV. A ten-year exclusion is reasonable.

Petitioner, in pleading guilty to grand larceny, admitted that he
knowingly and illegally received over $50,000 from NYS Medicaid
during March 1988 to February 1990. As part of his plea agreement,
Petitioner provided NYS with a signed confession of judgment in the
amount of $500,000 as restitution, of which he has not paid one
cent. FFCL 13, 14. The court sentenced Petitioner to a term of
incarceration of one to three years. FFCL 12. Prior to the I.G.'s
exclusion, Petitioner had an administrative sanction imposed
against him by the NYS DSS, which consisted of exclusion from NYS
Medicaid for five years and the requirement that he pay restitution
to NYS Medicaid in the amount of $608,333 plus interest.

The multiple aggravating factors present in this case, combined
with their severity, establish that Petitioner has been and remains
a threat to the integrity of federally-financed health care
programs. FFCL 48. By any standard, the criminal conduct for
which Petitioner was convicted is serious. Petitioner's crimes
were committed as part of a long-term scheme to defraud Medicaid,
and the crimes resulted in an enormous sum of money being
fraudulently obtained from Medicaid. Petitioner has failed to show
that there is even one mitigating factor present in this case. In
the absence of any offsetting mitigating factors, the aggravating
factors present in this case establish that a ten-year exclusion is
reasonable to satisfy the remedial purposes of the Act. 7/ FFCL
50, 51. The ten-year exclusion imposed and directed against
Petitioner by the I.G. must stand.


CONCLUSION

Based on the law and evidence, I conclude that Petitioner's
ten-year exclusion is reasonable and must stand.

It is so Ordered.



__________________________
Charles E.
Stratton
Administrative Law Judge


1. In this decision, I refer to all programs from which
Petitioner has been excluded, other than Medicare, as "Medicaid."

2. The parties' briefs will be cited as follows:

I.G.'s Brief I.G. Br. at (page)

Petitioner's Brief P. Br. at (page)

I.G.'s Reply Brief I.G. R. Br. at (page)

3. In 1992, Petitioner filed for bankruptcy. I.G. Ex. 5, 9.

4. I describe the permissible aggravating factors in FFCL 28.
I describe the permissible mitigating factors in FFCL 29.

5. The Notice mentioned only three of these aggravating
factors. The Notice referred to the financial damage caused by
Petitioner's crimes, the duration of his criminal activity, and his
prison sentence, but it did not mention Petitioner's prior
administrative sanction or that Petitioner was overpaid $1500 or
more by Medicaid as a result of improper billings. I have accepted
evidence concerning the latter two factors even though they were
not mentioned in the Notice because my authority to hear and decide
this case is de novo. Additionally, the I.G. provided Petitioner
adequate notice by asserting these additional factors to be
aggravating factors during the prehearing conference calls held on
December 30, 1993 and on March 7, 1994. The I.G. argued also that
these aggravating factors were applicable to this case in her brief
in support of her motion for summary disposition. Petitioner was
given ample opportunity to rebut the evidence and arguments which
the I.G. made pertaining to these factors.

6. During the March 7, 1994 prehearing conference call,
Petitioner alleged the presence of the mitigating factor listed at
42 C.F.R. 1001.102(c)(2), citing his physical condition.
Petitioner, however, acknowledged that the State court judge had
not specifically found that Petitioner's physical condition reduced
his culpability. Amended Prehearing Order & Ruling, dated March
17, 1994. Petitioner did not address this factor further in his
written brief. I find that this mitigating factor is not met in
this case. There is no evidence that, as 42 C.F.R.
1001.102(c)(2) requires, the criminal court made a finding on the
record, that before or during the commission of his crimes,
Petitioner suffered from a mental, emotional, or physical condition
that reduced his culpability. FFCL 34.

Petitioner does not contend that the other mitigating factor,
listed at 42 C.F.R. 1001.102(c)(1), is present in this case, and
the evidence shows that it is not present. FFCL 35.

7. I find that the three aggravating factors conceded by
Petitioner alone warrant a ten-year period of exclusion.