Legislative Presumption of Exam Validity Limits Administrative Licensing‑Fraud Charges: Commentary on Matter of Moran v. McDonald

I. Introduction

The Appellate Division, Third Department’s decision in Matter of Moran v. McDonald, 2025 NY Slip Op 06767 (Dec. 4, 2025), sits at the intersection of professional licensing, administrative enforcement, criminal-type statutory provisions, and a targeted legislative response to a localized crisis in the funeral services industry.

The core of the dispute is straightforward: the New York State Department of Health (DOH) sought to discipline several licensed funeral directors—who also served as senior officials and instructors at the American Academy McAllister Institute of Funeral Service, Inc. (AAMI)—for allegedly orchestrating a scheme in which exam questions from the National Board Examination (NBE) were collected from test takers and used to benefit future examinees.

DOH framed this conduct as “aiding” applicants in obtaining funeral director licenses “by false or fraudulent statement or representation” in violation of Public Health Law (PHL) § 3455(1)(a), a statute that on its face creates a misdemeanor offense. The petitioners challenged the agency’s authority and the legal sufficiency of the charge in a combined CPLR article 78 proceeding.

The Third Department ultimately annulled DOH’s determination and granted the petitions, holding that—whether or not DOH may invoke PHL § 3455 in an administrative setting—it failed as a matter of law to prove the essential element of any “false or fraudulent statement or representation.” The court further held that a 2018 statute creating a presumption that all then-licensed funeral directors had validly passed the NBE foreclosed any theory that the licensees had obtained their licenses by fraud, and thus eliminated the predicate for any “aiding” charge under § 3455.

The decision establishes a significant principle: where the Legislature has created an unrebutted presumption of the validity of professional examination results and licenses, an administrative agency cannot premise a finding of “aiding” licensing fraud on theories that necessarily contradict that presumption, and cannot stretch a criminal-style statute aimed at “false or fraudulent statement[s]” to cover conduct that involves no misrepresentation to the licensing authority.

II. Factual and Procedural Background

A. The Parties and the Examination Regime

The petitioners are licensed funeral directors who, at the relevant time, held leadership or instructional roles at AAMI, an institution providing mortuary science education to students seeking funeral director licensure in New York.

New York requires aspiring funeral directors to pass the National Board Examination (NBE), a qualifying exam created and administered by the International Conference of Funeral Service Examining Boards (the “Conference”). The NBE:

  • Is offered on a rolling, year-round basis;
  • Exists in multiple versions at any given time;
  • Contains overlapping questions across different versions; and
  • Requires each candidate, before testing, to acknowledge the confidentiality of the exam contents and to agree not to disclose them.

Thus, while the NBE is privately created and administered, successful completion of it is a condition for state licensure as a funeral director.

B. The Alleged Question-Harvesting Scheme and the Federal Litigation

In 2013, the Conference received allegations from a former AAMI student that AAMI faculty and leadership— including the petitioners—were:

  • Requesting that students who had taken the NBE share their recollections of specific exam questions; and
  • Collecting and disseminating these recalled questions to AAMI staff and students preparing to take the NBE.

The Conference responded by filing a federal lawsuit against AAMI and its president, asserting claims for:

  • Copyright infringement;
  • Trade secret misappropriation; and
  • Tortious interference with contractual relations (including violations of the students’ confidentiality agreements).

In the course of that litigation, the federal court issued a warrant allowing the Conference to seize AAMI’s computers and documents. The case settled in 2014. The settlement:

  • Imposed a permanent injunction barring AAMI from soliciting or collecting any nonpublic NBE questions or answers; and
  • Explicitly stated that it was not an admission of liability or wrongdoing, nor an admission of any violation of law by any party.

C. Invalidation of NBE Scores and the Legislative Response

Following the settlement, the Conference took unilateral action against past AAMI graduates. It:

  • Invalidated the NBE passing results of 300 AAMI graduates; and
  • Notified the jurisdictions listed on their applications (including New York) of this invalidation.

In 2018, DOH notified 94 licensed New York funeral directors whose scores had been invalidated by the Conference that they would be required to obtain valid scores prior to their next biannual registration. This created severe disruption:

  • These funeral directors faced the risk of being deemed to have been practicing without a valid license;
  • The mortuary services industry experienced “chaos”; and
  • Multiple lawsuits were filed against DOH by affected practitioners.

The Legislature intervened swiftly. By Laws of 2018, chapter 270, § 1, it enacted a targeted provision declaring that:

  • All funeral directors then licensed in New York were presumed to have successfully passed the NBE.
  • DOH could rebut this presumption only after providing notice and a hearing to the affected individual.

DOH conceded in Moran that it never attempted to rebut this statutory presumption for any of the 94 licensees whose scores had been invalidated by the Conference.

D. DOH’s Administrative Charges Against the Petitioners

In the same year (2018), DOH initiated administrative proceedings against the petitioners. It alleged that they violated Public Health Law § 3455(1)(a), which states in relevant part:

“Any person who shall … obtain or attempt to obtain or aid in obtaining any license or certificate under this article by any false or fraudulent statement or representation … shall be guilty of a misdemeanor.”

The statute also requires the Department to report substantiated violations to the Attorney General for “prompt prosecution” (PHL § 3455[5]).

DOH’s theory was that the petitioners had engaged in a “wide-spread conspiracy” to induce hundreds of applicants for New York funeral director licenses to violate § 3455(1)(a). Specifically, DOH accused them of:

  • Directing, advising, assisting, and exhorting students to violate their confidentiality obligations by disclosing NBE questions to AAMI personnel; and
  • Using those questions to benefit subsequent exam candidates, who then allegedly obtained licenses based on “inflated” or tainted exam scores.

After a hearing, an Administrative Law Judge (ALJ):

  • Sustained DOH’s charges; and
  • Recommended various penalties, including suspension or revocation of each petitioner’s license.

The Commissioner of Health (respondent McDonald) adopted the ALJ’s report and recommendations in full.

E. Article 78 Proceedings and Transfer to the Appellate Division

One petitioner (Kevin Moran) commenced a CPLR article 78 proceeding (Proceeding No. 1) in 2024 to annul the Commissioner’s determination. Shortly thereafter, the remaining petitioners (including Mary M. Dunn) filed another Article 78 proceeding (Proceeding No. 2) seeking the same relief.

Both proceedings were transferred to the Appellate Division, Third Department, pursuant to CPLR 7804(g) (because they raised “substantial evidence” questions). The court ordered the two matters joined and heard together.

III. Summary of the Opinion

The Third Department granted the petitions and annulled DOH’s determination in its entirety.

The court first noted the petitioners’ threshold argument that DOH lacked authority to prove a violation of PHL § 3455(1)(a) in an administrative proceeding because:

  • Section 3455 defines a misdemeanor (a criminal offense);
  • Criminal charges are subject to a two-year statute of limitations (CPL 30.10[2][c]), which had long expired given that the relevant conduct ended in 2014; and
  • The statute mandates referral to the Attorney General for “prompt prosecution,” which DOH never made.

DOH responded that PHL § 3450(1)(a) empowered the Commissioner to revoke or suspend licenses upon proof of a violation of any provision of Article 34, including § 3455, and that he could choose to proceed administratively. Petitioners countered that any “violation” of § 3455(1)(a) necessarily imports its criminal character.

Rather than definitively resolving that statutory-authority question, the court assumed (without deciding) that DOH could proceed under § 3455 in an administrative forum. Even on this assumption, the court held, DOH’s case failed as a matter of law for two independent reasons:

  1. No “false or fraudulent statement or representation” by petitioners. At most, the evidence showed that petitioners harvested and distributed exam questions and answers. That conduct, while potentially wrongful in other respects, did not itself involve any false or fraudulent representation to DOH or any licensing authority.
  2. No underlying fraud by licensees, given the statutory presumption of valid NBE passage. DOH attempted to argue that the allegedly “inflated” exam scores reported by applicants to DOH constituted the requisite false statements, with petitioners “aiding” those misrepresentations. The court found this a strained reading of § 3455 and, in any event, foreclosed by the 2018 statute, which created a presumption that all then-licensed funeral directors had validly passed the NBE. Because DOH never rebutted that presumption, the court held there was no “underlying fraud.”

Invoking established New York law on aiding and abetting fraud, the court reasoned that absent a valid underlying fraud, there can be no claim (or, by analogy, administrative charge) for aiding that fraud. Citing Oster v. Kirschner, Simon v. FrancInvest, S.A., and Little Rest Twelve, Inc. v. Zajic, the court held that the essential predicate—the fraudulent obtaining of licenses—was legally unavailable in light of the unrebutted statutory presumption of validity.

Consequently, the Third Department annulled the Commissioner’s determination and deemed the petitioners’ remaining arguments academic.

IV. Detailed Analysis

A. Statutory Framework

1. Public Health Law § 3455(1)(a): Criminal Licensing Fraud

PHL § 3455(1)(a) provides, in relevant part:

“Any person who shall … obtain or attempt to obtain or aid in obtaining any license or certificate under this article by any false or fraudulent statement or representation … shall be guilty of a misdemeanor.”

Key features:

  • It is explicitly criminal in nature, classifying the proscribed conduct as a “misdemeanor.”
  • It targets obtaining, attempting to obtain, or aiding in obtaining a license through false or fraudulent statements or representations.
  • Subsection (5) mandates that DOH report substantiated violations to the Attorney General for “prompt prosecution,” reinforcing the statute’s criminal character.

The statute does not on its face regulate all unethical conduct surrounding the exam, nor does it explicitly reference breach of private nondisclosure agreements or misuse of proprietary test content. Its focus is the integrity of the statements and representations made in the process of obtaining a state-issued license.

2. Public Health Law § 3450(1)(a): Licensing Discipline Authority

Although not extensively quoted in the opinion, DOH relied on PHL § 3450(1)(a), which it interpreted as authorizing the Commissioner to revoke or suspend a funeral director’s license upon proof that the licensee has violated any provision of Article 34, including § 3455.

From DOH’s perspective, this meant:

  • Section 3455 sets forth substantive misconduct (obtaining or aiding in obtaining a license by fraud); and
  • Section 3450 provides an administrative enforcement mechanism (revocation or suspension) independent of criminal prosecution, even though § 3455 also labels the conduct as a misdemeanor.

The petitioners disputed this reading, arguing that the “violation” of § 3455 is inseparable from its criminal character and that any enforcement must comply with criminal procedure, including the two-year statute of limitations for misdemeanors.

The court sidestepped a definitive ruling on this interpretive conflict, electing instead to assume, for argument’s sake, that DOH could enforce § 3455 administratively. This makes the subsequent holdings about the meaning of “false or fraudulent statement or representation” and the effect of the 2018 statute all the more central.

3. Laws of 2018, Chapter 270, § 1: Presumption of Exam Validity

Reacting to the “chaos” caused by the Conference’s invalidation of AAMI graduates’ scores—and DOH’s resulting notices that 94 licensees needed to retest—the Legislature enacted a narrowly targeted statute:

  • It established that all funeral directors then licensed in New York were presumed to have successfully passed the NBE.
  • It gave DOH the power to rebut this presumption, but only after providing notice and a hearing to the individual licensee whose exam score was called into question.

Critically, DOH admitted that it never invoked this rebuttal process for any of the affected AAMI graduates. Thus, for all legal purposes relevant to Moran, those funeral directors’ exam results and licenses remained conclusively valid.

This statute is the linchpin of the court’s analysis. Because the validity of the licensees’ passage of the NBE is legislatively presumed, and DOH chose not to challenge that presumption, the agency could not simultaneously argue that those same licenses had been obtained through fraud.

B. Petitioners’ Threshold Challenge: Criminal Statute vs. Administrative Enforcement

Petitioners first argued that DOH had no authority to use PHL § 3455(1)(a) in an administrative setting at all, for two related reasons:

  1. Criminal Nature and Statute of Limitations. Because § 3455(1)(a) defines a misdemeanor, any enforcement would be subject to the two-year criminal statute of limitations under CPL 30.10(2)(c). Here, the alleged conduct ended by 2014, while DOH’s proceeding began in 2018—too late for any criminal prosecution.
  2. Mandatory Referral to the Attorney General. Section 3455(5) requires DOH to report substantiated violations to the Attorney General for “prompt prosecution.” Petitioners contended that DOH could not bypass this structure by enforcing the criminal provision indirectly via an internal licensing proceeding, and that DOH in any event had never made the mandated referral.

DOH responded that:

  • Section 3450(1)(a) expressly authorizes license revocation or suspension based on any violation of Article 34, including § 3455; and
  • The Commissioner may choose to proceed administratively or (via referral to the Attorney General) criminally, but is not confined to criminal prosecution.

The Third Department recognized the significance of this dispute but deliberately left it unresolved, stating that “[a]ssuming, without deciding, that DOH had the authority to proceed under section 3455, its case must still fail.” This move avoids creating a broader precedent on agency authority and statutes of limitation, while still providing a clear outcome in the case.

C. No “False or Fraudulent Statement or Representation” by Petitioners

The court then turned to the heart of DOH’s case: did petitioners’ alleged conduct fit within the text of PHL § 3455(1)(a)?

Taking DOH’s allegations “at face value,” the court accepted that petitioners:

  • “Harvested” NBE questions and answers by encouraging past test-takers to recall and report exam content; and
  • Distributed those harvested questions and answers to other students preparing to sit for the NBE.

The court acknowledged that this behavior “might not have been the right thing to do,” and that the Conference “was arguably harmed” because it had to:

  • Retire a significant number of exam questions; and
  • “Halt testing for [AAMI] graduates for a certain period of time so that completely new questions could be written.”

However, the court emphasized a crucial limitation of § 3455(1)(a): petitioners “simply made no ‘false or fraudulent statement or representation.’”

Key reasoning:

  • The exam takers’ violation of private nondisclosure agreements with the Conference and its test administrator is not equivalent to making a false statement to DOH or the state.
  • That private contract breach cannot be “attributed” to petitioners and then “morph[ed] into a ‘false or fraudulent statement or representation’ in order to fit the statute.”
  • Section 3455 is concerned with misrepresentations in the process of obtaining a state license, not any and all wrongful conduct vis-à-vis a private exam provider.

Thus, with respect to petitioners’ own conduct, DOH failed to identify any qualifying misrepresentation to the state.

D. DOH’s “Inflated Scores” Theory and the Legislative Presumption

Faced with the absence of any false statement by petitioners themselves, DOH advanced a second theory: the relevant “false or fraudulent statement or representation,” it argued, came from the applicants who reported their allegedly inflated passing scores to DOH when applying for licensure. On this view:

  • The licensees obtained their licenses by falsely representing that they had validly passed the NBE; and
  • Petitioners “aided” that fraud by supplying improperly acquired exam content.

The court first characterized this as “a tortured reading of the statute.” The gravamen of § 3455(1)(a) is fraud by way of misrepresentation, not test unfairness or exam compromise. Even if one accepted the premise that the exam results were “inflated,” it is far from clear that a candidate’s reporting of a passing score that the exam provider itself had certified (until its retroactive invalidation) amounts to a knowing false statement to DOH.

But the court then struck down DOH’s theory on more fundamental grounds: the 2018 presumption statute (Laws of 2018, ch 270, § 1).

Because:

  • The Legislature had declared that all then-licensed funeral directors were presumed to have successfully passed the NBE; and
  • DOH conceded that it never sought to rebut this presumption for any of the affected licensees,

the court held that:

“Here, there simply is no underlying fraud due to the unrebutted presumption that the funeral directors successfully passed the examination and that the scores were valid, i.e., since the test takers cannot be said to have obtained their licenses through a false or fraudulent statement or representation, petitioners cannot have aided them in same.”

In other words, the Legislature’s presumption functionally ratified the licenses and exam results of all then-licensed funeral directors unless and until DOH went through the specified notice-and-hearing process. By never initiating that process, DOH left the presumption intact. With no legally recognized fraud in how the licenses were obtained, DOH lacked the necessary foundation to claim that petitioners had “aided” such fraud.

E. Borrowing from Aiding-and-Abetting Fraud Doctrine

To crystallize its reasoning, the court expressly invoked New York common law on aiding and abetting fraud. Citing Oster v. Kirschner, 77 AD3d 51, 55 (1st Dept 2010), it recited the elements of aiding a fraud:

  1. An underlying fraud;
  2. Actual knowledge of the fraud; and
  3. Substantial assistance in the commission of that fraud.

The court relied additionally on:

  • Simon v. FrancInvest, S.A., 178 AD3d 436 (1st Dept 2019), appeal dismissed 35 NY3d 1057 (2020); and
  • Little Rest Twelve, Inc. v. Zajic, 137 AD3d 540 (1st Dept 2016),

for the proposition that absent a valid, actionable underlying fraud, there can be no independent cause of action for aiding and abetting that fraud.

Although PHL § 3455 is a statute, not a common-law tort claim, the court’s analogy is clear: the “aid in obtaining” language presupposes that some party has in fact obtained—or attempted to obtain—a license by way of false or fraudulent statements. Where, as here, the licensees are legally presumed to have validly passed their exams and to hold valid licenses, there is no such fraud to “aid.”

This analytical step is particularly important. It signals that:

  • Statutory provisions that mirror common-law fraud concepts will often be interpreted in harmony with established civil fraud principles; and
  • An agency cannot use an “aiding” theory to circumvent the absence of an underlying, legally cognizable fraud.

F. Precedents Cited and Their Influence

1. Oster v. Kirschner, 77 AD3d 51 (1st Dept 2010)

In Oster, the First Department set forth the now-standard elements for aiding and abetting fraud under New York law. The case involved investors alleging that various defendants knowingly assisted primary wrongdoers in a fraudulent scheme. The court held that, to state such a claim, a plaintiff must allege:

  • A primary violation (fraud);
  • The aider’s actual knowledge of that fraud; and
  • Substantial assistance in the commission of the fraud.

In Matter of Moran, the Third Department imported this framework to illustrate that the “aid in obtaining … by any false or fraudulent statement or representation” language in § 3455(1)(a) likewise requires a “primary” fraudulent act—the fraudulent acquiring of a license.

2. Simon v. FrancInvest, S.A., 178 AD3d 436 (1st Dept 2019)

In Simon, the court reaffirmed that an aiding-and-abetting claim cannot stand in the absence of a viable underlying fraud claim. If there is no primary fraud, no secondary liability for aiding it can arise. The Third Department used this principle by analogy to emphasize that without a finding (or even a possibility) of fraudulent license acquisition—precluded here by the unrebutted statutory presumption—there can be no liability for “aiding” such acquisition.

3. Little Rest Twelve, Inc. v. Zajic, 137 AD3d 540 (1st Dept 2016)

Little Rest Twelve likewise stands for the proposition that the absence of a properly pled or proven primary fraud claim defeats any derivative claim for aiding and abetting. By citing this line of cases, the Third Department signaled that the “aiding” component of § 3455 should be read in tandem with core structural requirements of New York fraud jurisprudence.

G. Complex Concepts Simplified

1. Article 78 Proceeding (CPLR Article 78)

An Article 78 proceeding is a special type of lawsuit in New York used to challenge actions or determinations of state and local agencies and public officers. Common grounds include:

  • That the decision was “arbitrary and capricious”;
  • That it was not supported by “substantial evidence”; or
  • That the agency acted outside its jurisdiction or contrary to law.

Here, petitioners used Article 78 to seek judicial review of DOH’s disciplinary determination. Because their challenge implicated the sufficiency of the evidence (a “substantial evidence” issue), the matter was transferred directly to the Appellate Division.

2. Presumption and Rebuttal

A “presumption” in law is a rule that treats a certain fact as true unless and until it is disproved. The 2018 statute created a presumption that all then-licensed funeral directors had successfully passed the NBE. DOH could overcome (rebut) that presumption by:

  • Providing notice to a particular licensee; and
  • Holding a hearing at which DOH could attempt to prove that the individual did not, in fact, validly pass the exam.

Because DOH never initiated such hearings for the AAMI graduates at issue, the presumption remained intact. The court therefore treated it as legally conclusive for purposes of this case: the licensees’ exam results and licenses were valid and not fraudulent.

3. Misdemeanor vs. Administrative Discipline

A “misdemeanor” is a criminal offense punishable by up to one year in jail (less serious than a felony, but still criminal). PHL § 3455(1)(a) explicitly labels certain conduct related to obtaining licenses as a misdemeanor and speaks in terms of prosecution by the Attorney General.

Administrative discipline (such as license suspension or revocation) is different. It is:

  • Imposed by an agency (like DOH), not a criminal court;
  • Intended to regulate professions and protect the public, not to punish as a crime; and
  • Often subject to different procedures and time limits than criminal prosecutions.

One key unresolved question in Moran is whether and to what extent DOH may leverage a criminal statute like § 3455(1)(a) as a basis for purely administrative action, particularly after the criminal statute of limitations has expired. The Third Department left this question open.

4. Aiding and Abetting Fraud

“Aiding and abetting” fraud means helping someone else commit fraud. Under New York law:

  • There must first be a genuine fraud (a lie or concealment that causes harm);
  • The aider must actually know about that fraud; and
  • The aider must substantially assist in carrying it out.

In Moran, once the court determined that there was no legally recognized fraud in the licensees’ obtaining their licenses (due to the statutory presumption of validity), the entire aiding framework collapsed.

V. Impact and Broader Significance

A. Constraints on Agency Use of Criminal-Type Statutes in Licensing Discipline

Although the court did not definitively rule on DOH’s authority to use § 3455(1)(a) in an administrative proceeding, it did impose substantive constraints on how that statute can be applied:

  • Agencies may not creatively expand statutory language aimed at “false or fraudulent statement[s] or representation[s]” to cover conduct that involves no misrepresentation to the licensing authority.
  • “Aiding” liability cannot be conjured in the absence of a clear, legally recognized underlying fraud in the obtaining of the license.

For DOH and other New York licensing agencies, this decision signals that:

  • Criminal-type provisions embedded in professional licensing statutes will be strictly construed; and
  • Where such provisions are used as grounds for discipline, agencies must prove all their elements—not merely that conduct was questionable or contrary to private contractual obligations.

B. Binding Effect of Legislative Presumptions on Agency Enforcement

The 2018 statute was enacted to stabilize a chaotic situation and protect existing licensees. Matter of Moran underscores that such a statute has real teeth: an agency cannot treat those same licensees as though they had obtained their licenses fraudulently while simultaneously declining to invoke the mechanisms (notice and hearing) that the Legislature has prescribed for rebutting the presumption.

Practically, this means:

  • Legislative presumptions about professional qualifications and license validity cannot be casually disregarded in enforcement actions; and
  • Agencies must either follow the prescribed process to rebut the presumption with respect to specific individuals, or accept the legal consequences of treating those licenses as valid.

This principle may extend beyond funeral directing to other licensed professions if the Legislature chooses to enact similar presumptions, or where existing statutes establish presumptions about licensure or qualifications.

C. Exam Integrity vs. License Fraud: Distinct Legal Categories

The decision draws an important conceptual line between:

  • Exam integrity issues (e.g., compromising confidential test content, violating nondisclosure agreements with exam providers); and
  • Licensing fraud in the sense of making false statements to the state in order to obtain a professional license.

Even if test content is improperly obtained or used, that does not automatically equate to fraud in the licensing process. DOH’s reliance on § 3455(1)(a) attempted to bridge that gap by framing the licensees’ reporting of passing scores as fraudulent. The court rejected that effort, especially in light of the Legislature’s subsequent validation of those scores.

Going forward, agencies faced with exam-integrity concerns may need to:

  • Employ other statutory or regulatory tools—such as “unprofessional conduct,” “moral unfitness,” or violations of specific education regulations—rather than forced fits into fraud-based statutes; and
  • Coordinate with exam providers and federal courts (as happened here with the injunction) rather than rely on state licensing fraud provisions alone.

D. Limits on Retroactive Theories of Fraud Post-Legislative Intervention

Matter of Moran also highlights the limits of retroactive or collateral attacks on licenses after a legislative fix:

  • The Conference’s unilateral invalidation of NBE scores was a private act based on its own standards and proprietary interests.
  • The Legislature effectively “overrode” the practical consequences of that act in New York by declaring the scores presumptively valid for then-licensed funeral directors.

By refusing to let DOH treat those same licenses as fraudulently obtained—without first rebutting the presumption—the court preserved the Legislature’s policy choice. This serves as a cautionary tale for agencies seeking to advance theories of fraud that conflict with subsequent legislative settlements or stabilization measures.

E. Open Questions Left for Future Cases

The decision leaves several important issues unresolved:

  • Scope of DOH’s authority under § 3455(1)(a). Can DOH proceed administratively under § 3455 without referring matters to the Attorney General, and after the criminal statute of limitations has expired? Future cases may squarely address this.
  • Other grounds for discipline. The court did not address whether DOH (or another agency) could proceed against similar conduct under different regulatory provisions not requiring proof of “false or fraudulent statement[s].”
  • Interaction with federal injunctions and private exam contracts. Although the federal settlement and injunction shaped the factual background, the court treated them primarily as context, not as determinants of state licensing liability. How future courts reconcile private exam rules with state licensing law remains to be seen.

VI. Conclusion

Matter of Moran v. McDonald stands as an important clarification of the limits of New York’s Public Health Law § 3455(1)(a) in the context of professional licensing discipline. The Third Department’s ruling can be distilled into several key takeaways:

  1. Strict textual reading of fraud-based licensing statutes. Conduct that may be ethically dubious or violative of private exam agreements is not, without more, a violation of § 3455(1)(a). The statute requires a “false or fraudulent statement or representation” in the licensing context.
  2. No aiding liability without an underlying, legally cognizable fraud. Borrowing from common-law aiding-and-abetting doctrine, the court held that where licensees are statutorily presumed to have validly passed their exam and obtained their licenses, there is no underlying fraud to “aid.”
  3. Legislative presumptions are binding on agencies absent proper rebuttal. The 2018 statute foreclosed DOH from treating AAMI graduates’ exam results as fraudulent, so long as DOH chose not to invoke the statute’s rebuttal mechanism.
  4. Unresolved but looming: agency use of criminal provisions in administrative forums. The court left open whether and how DOH may rely on criminal-type statutes like § 3455 for non-criminal disciplinary purposes, particularly in light of statutes of limitation and mandatory referrals to the Attorney General.

In practical terms, the decision curtails attempts to treat exam-question sharing—however problematic from an exam-provider’s point of view—as licensing fraud absent explicit false statements in the license application process. It also reinforces the principle that, when the Legislature enacts a targeted corrective statute (here, the 2018 presumption of exam validity), agencies must respect the legal consequences of that statute in their subsequent enforcement actions.

As such, Matter of Moran is a significant precedent in New York administrative and professional licensing law, especially for situations where private examination regimes intersect with public licensing authority and legislative intervention.