United States ex rel. Bennett v. Mnuchin

Decision Date20 December 2018
Docket Number6:18-CV-1403 (TJM/ATB)
PartiesUNITED STATES OF AMERICA, ex rel. ANTHONY BENNETT, Plaintiffs/Relator, v. STEVEN T. MNUCHIN et al., Defendants.
CourtU.S. District Court — Northern District of New York

ANTHONY BENNETT, Plaintiffs/Relator,1
STEVEN T. MNUCHIN et al., Defendants.

6:18-CV-1403 (TJM/ATB)


December 20, 2018




The plaintiff in this sealed action has filed a civil complaint against defendants pursuant to the False Claims Act ("FCA"), 31 U.S.C. § 3729 et seq. (Dkt. No. 1). Plaintiff has also filed an application to proceed in forma pauperis ("IFP"), and a motion for appointment of counsel. (Dkt. No. 3, 6).

I. IFP Application

Plaintiff declares in his IFP application that he is unable to pay the filing fee. (Dkt. No. 2). This court agrees, and finds that plaintiff is financially eligible for IFP status.

However, in addition to determining whether plaintiff meets the financial criteria to proceed IFP, the court must also consider the sufficiency of the allegations set forth

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in the complaint in light of 28 U.S.C. § 1915, which provides that the court shall dismiss the case at any time if the court determines that the action is (i) frivolous or malicious; (ii) fails to state a claim on which relief may be granted; or (iii) seeks monetary relief against a defendant who is immune from such relief. 28 U.S.C. § 1915 (e)(2)(B)(i)-(iii).

In determining whether an action is frivolous, the court must consider whether the complaint lacks an arguable basis in law or in fact. Neitzke v. Williams, 490 U.S. 319, 325 (1989). Dismissal of frivolous actions is appropriate to prevent abuses of court process as well as to discourage the waste of judicial resources. Neitzke, 490 U.S. at 327; Harkins v. Eldridge, 505 F.2d 802, 804 (8th Cir. 1974). Although the court has a duty to show liberality toward pro se litigants, and must use extreme caution in ordering sua sponte dismissal of a pro se complaint before the adverse party has been served and has had an opportunity to respond, the court still has a responsibility to determine that a claim is not frivolous before permitting a plaintiff to proceed. Fitzgerald v. First East Seventh St. Tenants Corp., 221 F.3d 362, 363 (2d Cir. 2000) (finding that a district court may dismiss a frivolous complaint sua sponte even when plaintiff has paid the filing fee).

To survive dismissal for failure to state a claim, the complaint must contain sufficient factual matter, accepted as true, to state a claim that is "plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550

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U.S. 544, 570 (2007)). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Bell Atl. Corp., 550 U.S. at 555). The court will now turn to a consideration of the plaintiff's complaint under the above standards, keeping in mind that pro se pleadings are interpreted to raise the strongest arguments they suggest. See Abbas v. Dixon, 480 F.3d 636, 639 (2d Cir. 2007).

II. Facts

The plaintiff has sued a variety of defendants, including Steven T. Mnuchin, the United States Treasury Secretary; Scott M. Stringer, New York City Comptroller; Richard A. Brown, "District Attorney;" John B. Latella, "Administrative Judge;" Audrey Pheffer, "County Clerk;" Barbara D. Underwood, New York State Attorney General; Anthony Annucci, Commissioner of the Department of Corrections and Community Supervision ("DOCCS"); Diane Davis, United States Bankruptcy Judge; and Deborah J. McCullock, Executive Director of the Central New York Psychiatric Center ("CNYPC"). (Petition/Complaint ("Compl.") at 1, CM/ECF p.7)2 (Dkt. No. 1).

The plaintiff identifies himself as a "Third Party Intervener on behalf of Anthony

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Bennett Estate."3 (Id.) The complaint criticizes the actions of Northern District of New York Bankruptcy Judge Diane Davis. Plaintiff claims that Judge Davis improperly dismissed his "involuntary" bankruptcy petition. (Compl. generally). Plaintiff states that Judge Davis and the Clerk of the Court had a "predetermined decision ready on paper to deprive Plaintiff(s) . . . of the Property of the Estate . . . ." (Compl. at 2). Plaintiff states that he sent a "Certificate of Protest and attachments and Writ of Execution . . . for filing and registration . . . ." (Id.) Plaintiff states that when he received no response from the Bankruptcy Court in Utica, he filed a "'Bill in Equity'" because of the "fraud and deceit of the Court." (Id.) Plaintiff states that the Bankruptcy Court has failed to respond to any of plaintiff's submissions, and he "respectfully demand[s]" an investigation of the "entire Court record and Policy and Procedure in the form of Discovery . . . ." (Id.) (emphasis in original). Plaintiff claims that Judge Davis violated her oath of office, has issued "void orders," and predetermined plaintiff's decision, in contravention of all laws and procedures. (Id.)

Plaintiff states that he has "Noticed" the President of the United States by certified mail. (Compl. at 4). Plaintiff then turns to a discussion of the Internal Revenue Service ("IRS"), stating that the "only thing that can create a debt with the IRS

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is the assessment." (Id.) Plaintiff appears to state that in filing his "involuntary" bankruptcy petition, he was seeking to meet with a trustee from the Department of Justice, who could assist him with some IRS "liability." (Compl. at 5). Plaintiff then states that he had stated his "intent" to pay all of his assessed taxes and pay all "proven" liabilities, but he would bring an action for "fraud" against anyone filing a "proof of claim unaccompanied by evidence of a debt, obligation, or liability." (Id.)

Plaintiff also alleges that Judge Davis and her clerk violated a variety of other federal statutes, including sections of the criminal law. (Compl. at 7-13). The complaint contains a section for "Claims," followed by two "Counts." (Id. at 7-11, 11-13). In addition to the False Claims Act, plaintiff has alleged violations of 18 U.S.C. § 1001 (false statements); 18 U.S.C. §§ 241 and 242 (criminal civil rights violations)4; the U.S. Patriot Act and Bank Secrecy Act;5 the "New York Securities Act & Investment Advisors Act;" and 18 U.S.C. § 1956 (laundering of monetary instruments).

Plaintiff's exhibits include a "Stipulation of Discontinuance," dated August 16, 2018, signed by Christopher J. Wagner, Esq. of the Mental Hygiene Legal Services, and attorney for plaintiff and "so-ordered" by the Honorable Walter W. Hafner, County Court Judge. (Compl. Exh. A at CM/ECF 20-22). Plaintiff has attached a lengthy

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affidavit to Exhibit A, which consists of stream-of-consciousness statements that may or may not mean something to the plaintiff.6 (Compl. at CM/ECF 24-38). The complaint includes another exhibit which appears to be a July 17, 2018 receipt from the Data Processing Unit of the Uniform Commercial Code Division of the New York Department of State, acknowledging the filing of a "financing statement" by plaintiff. (Compl. Exh. B at 1, CM/ECF 39). Plaintiff has also attached a copy of the "financing statement" itself, which lists the "collateral" as a "Certificate of Protest . . . for $100,000,000.00 /USD." (Compl. Ex. B at 2, CM/ECF at 40).

Plaintiff has attached the documents that he filed in the Northern District of New York Bankruptcy Court, labeled "Petition to Intervene." (Compl. Ex. C at CM/ECF 42-45). Plaintiff states that he is the "Third Party Intervenor," who claims an interest in the entire case. (Compl. at CM/ECF at 42). Plaintiff has also attached the "Order to Show Cause," issued by Judge Davis. (Compl. Exh. CD, CM/ECF at 46). The order indicates

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that the plaintiff's action was subject to dismissal for failure to pay the filing fee and noncompliance with "the involuntary filing requirements set forth in 11 U.S.C. § 303 (b)." (Id.) Plaintiff was ordered to appear at the Federal Court House in Utica on October 23, 2018. (Id.) Judge Davis dismissed the action on November 2, 2018 "for the reasons stated on the record." (Compl. Exh. E, CM/ECF at 47).

The next exhibit is a receipt of plaintiff's claim against the City of New York, dated February 9, 2018. (Compl. Exh. F at CM/ECF 48). The claim was acknowledged by the Comptroller of the City of New York. The receipt states that plaintiff's claim was "under investigation." (Id.) The plaintiff's next exhibit is the Comptroller's response to plaintiff's claim. (Compl. Ex. G, CM/ECF at 49). The response is dated February 14, 2018 and states that plaintiff's "International Bill of Exchange," presented to the Queens County Supreme Court, did not state a claim under New York's Administrative Code. (Id.) Plaintiff's Exhibit H is an affidavit that he sent to the Bankruptcy Court. (Compl. Exh. H, CM/ECF at 50-51).

Plaintiff has also included a document, dated February 6, 2018, which is not listed as a separate exhibit. (CM/ECF at 52-55). This document includes an "Assessment of Admitted Damages." (Id.) It appears that this was one of the documents that plaintiff submitted to the Queens County Supreme Court. Finally, plaintiff includes a "Beneficiary/Estate Price List." (Id. at 56). This document includes typewritten violations, listed under the heading "Product or Service." (Id.) Each

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violation contains a "Product Number" and a "Price" listed. There are handwritten check marks next to several of the violations.7 (Id.)

III. Qui Tam/Representation

A. Legal Standards

The FCA contains a "qui tam" provision authorizing private citizens, called "relators," to sue on behalf of the United States government to recover treble damages from those who knowingly make false claims for money or property upon the Government or who knowingly submit false statements in support of those claims or to avoid the payment of money or property to the Government. See 31 U.S.C. § 3730(b).

In order to bring an action under the FCA, the relator must file the...

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