Dental medicaid fraud victory on appeal

Attorney Michael L. Horowitz recently won a case in the Alaska Court of Appeals involving millions of dollars of alleged dental medical fraud and other alleged crimes related to a dental practice.

Cell phones contain vast amounts of personal data. GPS can tell where a person has been. Emails can show political affiliation. Texts can show intimate details of personal relationships. That's the tip of the iceberg.

Horowitz challenged the trial court's denial of a motion to suppress the illegal search of a cell phone. Police had a warrant, and the warrant authorization even mentioned cell phones, but nothing in the warrant application gave a reason to search the phone, and nothing in the authorization limited the parameters of the search.

The Alaska Court of Appeals agreed that the warrant application failed to provide the probable cause necessary to search the phones. The court also agreed that the search authorization was unconstitutionally broad.

Consequently, the Court of Appeals reversed the denial of the suppression motion and remanded the case back to the trial court for further proceedings.

In part, the Alaska Court of Appeals wrote:

The Alaska Constitution protects the “right of the people to be secure in their persons, houses and other property, papers, and effects, against unreasonable searches and seizures.” The United States Constitution sets out a similar right. To protect this right, both the federal and state constitutions require a search warrant to be supported by probable cause and to “particularly describ[e] the place to be searched, and the persons or things to be seized.” . . .

[O]ther than identifying cell phones as a type of “separate removable or loose computer storage media” that Anderson sought to seize, the phrase “cell phone” did not appear anywhere in the affidavit. The district court issued the warrant as requested. The warrant authorized law enforcement to search for the property that was identified in the affidavit’s description of “concealed property,” which included “loose computer storage media, such as, but not limited to, cell phones.” Notably, the warrant did not authorize the police to search for or seize text messages, videos, or photos. . . .

[T]he superior court . . . denied the motion to suppress. The court held that [the] affidavit established probable cause to search . . . computers, and that because “modern day cellphones are computer devices,” this probable cause extended to the search of . . . cell phones. . . .

The State defends the superior court’s findings as reasonable inferences from the evidence. Citing to Pohland, the State argues that in the modern world, “over 90 percent of Americans own a cell phone,” and it is “common knowledge” that “many people conduct business on their personal phones.” The State also asserts that the court could infer that, because [the defendants] were co-conspirators in a scheme to commit medical assistance fraud, their cell phones “would contain programs or communications relating to dental services, billing, employment, policies, accounting, payroll, claims, or other matters.”

As an initial matter, the State’s argument misapprehends our decision in Pohland. In discussing the ubiquity of cell phones, we did not endorse the inference that probable cause to search a cell phone may be derived from assumptions about how common these devices are in modern life. Rather, we mentioned the ubiquity of portable computing devices to emphasize the importance of affording them strong Fourth Amendment protections.

To satisfy the probable cause requirement of the United States and Alaska Constitutions, a search warrant must provide “a ‘nexus’ between the place to be searched, criminal activity, and the items sought.” Thus, in order to establish probable cause to search [the] cell phone, the warrant application was required to explain not only why [the defendant] was suspected of committing medical assistance fraud, but also why law enforcement expected to find evidence of that crime in [this] cell phone.

The warrant application in this case did not provide any factual information about why [these] phones would contain programs or communications relating to services, billing, employment, policies, accounting, payroll, or insurance claims. It did not discuss text messages, videos, or photographs, and did not provide any explanation for why [the users] would be storing dental or insurance records, or other business documents, in their phones’ memory. And although the court could reasonably infer that [the defendants] (like most adult Americans) owned cell phones, the warrant application did not discuss [these defendants'] use of their cell phones, nor did it assert that the officers believed that they had used their cell phones to discuss their medical assistance fraud scheme.

Under these circumstances, it was unreasonable for the court to assume that [the defendants used their phones to communicate about their insurance billing practices or that their status as “co-conspirators” meant that they would have used cell phones to communicate about the alleged conspiracy.

As we have explained, when the superior court denied the motion to suppress, it based its decision in part on its finding that “modern day cellphones are computer devices.” But even if we accept that cell phones are a type of small portable computer, this does not mean that whenever a search warrant application establishes probable cause to search a desktop or laptop computer for evidence of fraudulent billing, such probable cause will automatically extend to the business owner’s or office manager’s cell phones. Indeed, although we have characterized cell phones as “portable computing devices,” cell phones often serve different functions and contain different kinds of information than laptop and desktop computers. Thus, even though the warrant application established probable cause to search [the] office computers for evidence of medical assistance fraud, the court was still required to separately determine whether the application established probable cause to believe that such evidence would be found on [the] cell phones.

The affidavit in this case did not provide any explanation for why [appellant's] phone would contain programs or communications relating to dental services, billing, employment, policies, accounting, payroll, or insurance claims. In fact, as we have mentioned, it did not discuss cell phones at all. Given that the application did not contain any non-speculative indication that [the] cell phones would contain the dental records, healthcare records, or other documents that were mentioned in the affidavit, we conclude that the affidavit did not establish probable cause to search [the] cell phones. . . .

The Fourth Amendment to the United States Constitution and Article I, Section 14 of the Alaska Constitution state that a warrant must “particularly describ[e] the place to be searched, and the persons or things to be seized.” This particularity requirement “serves to protect against the possibility of a general, exploratory search, to assure that articles of property outside the legitimate scope of the warrant are not subject to mistaken seizure, and to reinforce the fundamental rule that seizure of property cannot be permitted in the absence of probable cause.” While all warrants must be “reasonably specific,” the degree of particularity required of a specific warrant is determined by the totality of the circumstances.

We have previously joined the appellate courts of several other states in concluding that it is unlawful for a warrant to authorize an unfettered search of an entire cell phone, or all “app data” contained on a cell phone. We have also explained that warrants authorizing the search of cell phones usually should contain some temporal limit — e.g., they should restrict the search for data that was generated within a specific time. The State nevertheless contends that the warrant in this case was sufficiently particular because it identified the types of records sought, which the State describes as “programs or communications relating to dental services, billing, employment, policies, accounting, payroll, claims, or other matters.”

But even if the warrant particularly described the items that law enforcement could seize, it did not particularly describe the “place” to be searched. Instead, the warrant in this case authorized a “forensic examination of all electronic data at an off-site location,” and it did not limit the search to only particularly described areas within the phones — for example, to particular types of data, to data acquired during a particular timeframe, or to data found within particular applications. Because the warrant seemingly authorized a generalized search of all of the cell phone’s electronic data, i.e., it did not comply with the particularity requirement, we conclude that the search warrant in this case was an unlawful general warrant. Thus, the search of [the] cell phone — and the seizure of the text messages, photos, and videos located within the phone — was unconstitutional.