Anti-Kickback Statute "safe harbor" provision is an affirmative defense, not an element

Inapplicability of the safe harbor provision need not be alleged in the indictment

United States v. Enriquez, No. 23-4424, filed March 18, 2025

Panel: Tallman (authored), Owens, Montenegro (S.D. Cal.)

Holding: The “safe harbor” provision of the Anti-Kickback Statute is neither an element of the offense nor something that need be alleged in the indictment.

Juan Carlos Enriquez was a pharmacy technician employed by his alleged co-conspirator, Irina Sadovsky. Enriquez referred Medicare and Medi-Cal beneficiaries to Sadovsky’s pharmacies in return for a kickback. He was charged with conspiracy to receive kickbacks in violation of 18 U.S.C. § 371 (conspiracy to defraud the United States) and the Anti-Kickback Statute (“AKS”). The AKS contains a statutory safe harbor provision for payments from an employer to a bona fide employee for employment-related items or services.

Enriquez moved to dismiss the indictment for lack of specificity and failure to state an offense because the charging document did not affirmatively allege that the conditions of the statutory safe harbor provision did not apply. The district court denied the motion to dismiss, and Enriquez pleaded guilty reserving his right to appeal the denial of his motion to dismiss.

On appeal, Enriques relied on Ruan v. United States, 597 U.S. 450 (2022), holding that the the government must prove beyond a reasonable doubt in a prosecution for a Controlled Substance Act violation that the defendant knew the CSA exception for authorized prescriptions did not apply. In reliance on Ruan, Enriquez argued that any “facially applicable” exception must be treated as a “quasi-element” and alleged in the indictment.

The panel disagreed. First, it found that the structure of the AKS, which lists safe harbor provisions in separate sections of the statute, is consistent with an intent that these provisions be treated as affirmative defenses rather than as elements that the government must disprove. Second, it held that Ruan did not change pleading standards and that affirmative defenses need not be alleged.

The opinion also suggests, but does not decide, that even within the context of the CSA, Ruan does not hold that the government must allege in the indictment that the defendant does not meet the elements of potentially applicable statutory exceptions.

The opinion is here.