United States v. Viju Mathew, 916 F.3d 510

Background

Viju Mathew, a Parkland hospital registration specialist, stole ~1,300 patients’ identifying information (including HICNs) and provided it to his business, Dallas Home Health Care (DHH).
Authorities found DHH had information for ~1,300 Parkland patients; prosecutors identified 16 patients for whom DHH billed Medicare a total of $311,445.57.
Mathew pleaded guilty to knowingly possessing (with intent to use or transfer) five or more authentication features (HICNs) in violation of 18 U.S.C. § 1028, charged as occurring on or about Sept. 23, 2011.
The PSR treated the $311,445.57 as actual loss, applied a Guidelines enhancement, and recommended restitution; Mathew argued loss was zero or, at most, limited to amounts for allegedly ineligible patients, and sought offsets for legitimate services provided.
At sentencing the district court found Mathew failed to prove services were legitimate, reduced loss by payments for two patients produced late, set loss/restitution at $277,957.89, applied a 12‑level enhancement, and sentenced Mathew to 30 months.
On appeal the Fifth Circuit vacated and remanded for resentencing, holding restitution was lawful but must be limited to Medicare losses incurred on or after Sept. 23, 2011; the court found the government proved actual loss and that Mathew failed to establish entitlement to offsets.

Issues

Issue	Plaintiff's Argument (Mathew)	Defendant's Argument (Gov't)	Held
Lawful scope of restitution under MVRA	Restitution unlawfully included payments predating the indictment and exceeded conduct of conviction	Restitution may include losses proximately caused by possession with intent to use; DHH bills tied to stolen HICNs are tainted	Restitution lawful in principle but must be limited to losses directly/proximately caused by the offense of conviction (i.e., on/after Sept. 23, 2011); district court erred by including earlier payments
Causation (direct and proximate) between possession and Medicare losses	Possession alone did not directly/proximately cause Medicare payments	But-for and foreseeability: possession with intent to use caused DHH to bill Medicare, so payments were foreseeable harm	Government met burden: Mathew’s knowing possession with intent to use/transfer was both a but-for and reasonably foreseeable cause of Medicare’s later losses
Amount of loss / evidentiary sufficiency	Mathew argued he provided legitimate services and thus was entitled to an offset reducing loss	Government produced evidence that Medicare would not have paid if it had known identities were compromised; DHH services for most patients were tainted or not Medicare‑covered	Court did not clearly err: government proved Medicare paid claims and showed payment was tied to compromised identities; actual loss established for amounts on/after indictment date
Entitlement to offset for value of legitimate services	Mathew produced records/testimony claiming services were legitimate and patients qualified; sought credit for fair market value	Govt rebutted with detailed evidence that services were ineligible, exaggerated, or not as billed; burden on Mathew to prove both legitimacy and but-for payment	Mathew failed Mahmood two‑part test (legitimate services and but-for payment); district court reasonably denied offset

Key Cases Cited

United States v. Hayes, 32 F.3d 171 (5th Cir. 1994) (restitution limited to losses caused by the specific conduct of conviction; cannot include earlier unrelated losses)
United States v. Mancillas, 172 F.3d 341 (5th Cir. 1999) (possession with intent to use cannot support restitution for prior harms not caused by that possession)
United States v. Hughey, 147 F.3d 423 (5th Cir. 1998) (when scheme/conspiracy is an element, restitution may reach victims of the defendant’s course of criminal conduct)
United States v. Maturin, 488 F.3d 657 (5th Cir. 2007) (if conviction does not require a scheme, restitution is limited to conduct underlying the offense of conviction)
United States v. Sharma, 703 F.3d 318 (5th Cir. 2012) (MVRA limits restitution to actual loss directly and proximately caused by the offense of conviction)
United States v. Espinoza, 677 F.3d 730 (5th Cir. 2012) (mere possession without intent may not be a but‑for cause of a victim’s loss)
United States v. Mahmood, 820 F.3d 177 (5th Cir. 2016) (to obtain offset for services rendered, defendant must prove services were legitimate and Medicare would have paid but for the fraud)
In re Fisher, 640 F.3d 645 (5th Cir. 2011) (but‑for and foreseeable causation standards for determining who is directly/proximately harmed)