United States v. Guerrero, No. 14 CR 732-4

CourtUnited States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
Writing for the CourtJudge Rebecca R. Pallmeyer
Docket NumberNo. 14 CR 732-4
Decision Date22 June 2021


No. 14 CR 732-4


June 22, 2021

Judge Rebecca R. Pallmeyer


Danilo Tinimbang claims an interest in certain assets seized by the Government as property involved in or traceable to a money laundering and health care fraud scheme. The mastermind behind the scheme was Danilo Tinimbang's ex-wife, Josephine Tinimbang, who was charged in a multi-defendant indictment but departed for the Philippines before being prosecuted. Danilo Tinimbang himself was never charged, but several others were. Among those was Janet Guerrero, who pleaded guilty in December 2016 to a charge of conspiracy to launder the proceeds of healthcare fraud. As part of her plea agreement, Guerrero agreed to forfeit certain assets traceable to the conspiracy, and the court entered a preliminary order of forfeiture. In the proceeding now before the court, Danilo Tinimbang asserts an interest in those assets and seeks a hearing regarding the validity of his interest. See 21 U.S.C. § 853(n); FED. R. CRIM. P. 32.2(c). Specifically, Claimant Tinimbang maintains that his ex-wife Josephine and their adult children stole money that he invested in a home health care company, ousted him from his role as the president of the company, and used the stolen funds in furtherance of their crimes.

The Government and Mr. Tinimbang have filed cross-motions for summary judgment on his claim. For reasons explained here, the Government's motion is granted and Claimant's motion is denied.

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A. The Criminal Case

On December 17, 2014, a grand jury sitting in the Northern District of Illinois charged 15 individuals with conspiracy to commit health care fraud in violation of 18 U.S.C. § 1349. (See generally Indictment [1].) Janet Guerrero was among those charged. She was then later named in several superseding indictments. In a Fourth Superseding Indictment, filed on August 10, 2016, the Government charged Guerrero with conspiracy to commit health care fraud, in violation of 18 U.S.C. § 1349; conspiracy to pay and receive illegal kickbacks relating to a federal health care program, in violation of 18 U.S.C. § 371; paying illegal kickbacks, in violation of 42 U.S.C. § 1320a-7b(b); and conspiracy to launder money instruments, in violation of 18 U.S.C. § 1956(h). (See Fourth Superseding Indictment [282], Counts 1, 14-26, 31.) The conspiracy to commit health care fraud allegedly began "in or around January 2008 and continu[ed] through in or around March 2014." (Id., Count 1 ¶ 2.) The conspiracy to launder monetary instruments allegedly began "no later than in or around 2008 and continu[ed] to at least in or around 2013." (Id., Count 31 ¶ 2.)

As discussed in more detail below, the Government alleged that under the direction of Guerrero and her co-conspirators, at least two home health care companies—Donnarich Home Health Care, Inc. ("Donnarich") and Josdan Home Health Care, Inc. ("Josdan")—billed Medicare for services rendered to "homebound" patients, knowing that those patients likely had not received or were not eligible for such services. (See Gov't Local Rule 56.1 Stat. ("Gov't L.R. 56.1 Stat.") [735-1] ¶ 10; see also, e.g., Fourth Superseding Indictment, Count 1 ¶ 11; Guerrero Plea Agreement [367] ¶ 6.)1 Guerrero's co-conspirators included Josephine (also called "Josie"),

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Claimant's now ex-wife. (See, e.g., Claimant Resp. to Gov't L.R. 56.1 Stat. ("Cl. L.R. 56.1 Resp.") [742] ¶¶ 4, 10; Guerrero Plea Agreement ¶ 6.)

On December 14, 2016, Guerrero pleaded guilty to "conspiracy to launder the proceeds of health care fraud and unlawful payments for patient referrals," in violation of 18 U.S.C. § 1956(h). (Guerrero Plea Agreement ¶ 5.) The United States agreed to dismiss the other charges against her. (See id. ¶ 17.) The relevant criminal forfeiture statute provides broadly for forfeiture of property "traceable" to criminal conduct; thus, "in imposing sentence on a person convicted of an offense in violation of Section 1956," the court "shall order that the person forfeit to the United States any property, real or personal, involved in such offense, or any property traceable to such property." 18 U.S.C. § 982(a)(1). Section 982(a)(7) provides specifically that when sentencing "a person convicted of a Federal health care offense," the court "shall order the person to forfeit property, real or personal, that constitutes or is derived, directly or indirectly, from gross proceeds traceable to the commission of the offense." 18 U.S.C. § 982(a)(7). As part of her plea agreement, Guerrero agreed to forfeit four assets named in the Fourth Superseding Indictment as property involved in or traceable to the conspiracy to launder monetary instruments. (See Guerrero Plea Agreement ¶¶ 18-19.) Those assets are:

• $1,572,906.88 seized on or about March 5, 2014 from Pershing Advisor Solutions LLC investment account number AUG-709598, held in the name of First USA Finance and Investment;

• $1,438,050 seized on or about April 24, 2014, resulting from the sale of Facebook shares held in Computershare account number C0000017621 in the name of First USA Finance and Investment;

• Real property located at 6420 N. Longmeadow, Lincolnwood, Illinois; and

• $425,967.24 in proceeds from the sale of real property located at 6430 N. Longmeadow, Lincolnwood, Illinois.

(See Guerrero Plea Agreement ¶ 19.)

On January 8, 2018, the Government moved for the entry of a preliminary order of forfeiture ("POF") for these assets [623]. The court granted the motion on January 9, 2018 [624].

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On January 11, 2018, the court sentenced Guerrero and entered the POF. In the POF, the court stated that in her plea agreement, Guerrero acknowledged that the four assets referenced above are "subject to forfeiture as property, real and personal, involved or traceable to her violation of" 18 U.S.C. § 1956(h). (POF [632] ¶¶ (d)(1)-(4).) After the court entered the POF, the Government provided direct written notice to those entitled to receive it, including Claimant (through his counsel). (Cl. L.R. 56.1 Resp. ¶ 2.) The Government also published notice of the POF on an Internet website for 30 days. (See id.) Through these actions, the Government fulfilled its duty of notice under 18 U.S.C. § 982 and 21 U.S.C. § 853. (Cl. L.R. 56.1 Resp. ¶ 2.)

On February 23, 2018, Claimant timely asserted a claim to the four assets listed in the POF. (Id. ¶ 3; see Verified Claim [675].) In doing so, he initiated an ancillary proceeding under Federal Rule of Criminal Procedure 32.2(c). See Fed. R. Crim. P. 32.2(c)(1) ("If, as prescribed by statute, a third party files a petition asserting an interest in the property to be forfeited, the court must conduct an ancillary proceeding . . . ."). No other person has submitted a claim to the POF assets. (Cl. L.R. 56.1 Resp. ¶ 3.) The Government moved to strike the Verified Claim in June 2018 [697], and the court ordered discovery [708]. After discovery closed in October 2018, the parties filed the motions for summary judgment that are now before the court.

B. The Home Health Care Companies

1. Donnarich

Claimant is the former president, director, and 50% shareholder of Donnarich. (Gov't Resp. to Cl. Local Rule 56.1 Stat. of Add'l Facts ("Gov't L.R. 56.1 Resp.") [751-1] ¶ 1.) Claimant founded Donnarich in January 2005 with his then-wife, Josephine, and their children, Don Michael Tinimbang, Richard Tinimbang, and Donna Tinimbang. (Id. ¶ 1; Cl. L.R. 56.1 Resp. ¶ 6.)2

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Claimant invested assets totaling $811,400 into Donnarich "at its inception." (Gov't L.R. 56.1 Resp. ¶ 2.) Those assets included $366,400 from a mortgage loan secured by a marital/family residence in Lincolnwood, Illinois, of which Claimant was a co-owner; $175,000 secured by another mortgage loan taken against the same residence; and $270,000 from a mortgage loan taken against a mixed-use rental property in Chicago, Illinois, of which Claimant and Josephine were co-owners. (Id.)

Donnarich was located in Lincolnwood, Illinois. (Cl. L.R. 56.1 Resp. ¶ 6; Guerrero Plea Agreement ¶ 6.) It received Medicare certification on or around May 15, 2005, and then began operating as a home health care company. (Gov't L.R. 56.1 Resp. ¶ 3.) In either May 2006 or sometime in 2007, Josephine and others removed Claimant as the president of Donnarich without his consent or knowledge. (Compare Cl. Dep. Tr., Ex. 7 to Gov't L.R. 56.1 Stat. [735-8] at 23:22-23 (Claimant's testimony during his deposition for this case that "they kick[ed] me out as president in 2007"); Cl. L.R. 56.1 Resp. ¶ 13 (agreeing that Claimant was the president of Donnarich until "some unknown time in 2007"); with Cl. L.R. 56.1 Stat. of Add'l Facts ("Cl. L.R. 56.1 Stat.") [742] ¶ 4 (stating that "Josephine and the other co-owners of Donnarich purportedly caused [Claimant's] removal as the President and as a Director" in May 2006);3 Gov't L.R. 56.1 Resp. ¶ 4 (admitting same).) Thereafter, Richard "improperly held himself out as" Donnarich's president and "Josephine took apparent control of Donnarich's business activities." (Gov't L.R. 56.1 Resp. ¶¶ 4-5.)4

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2. Josdan and Patient Home Services of Illinois, Inc.

In September 2005, Josephine and Richard incorporated Josdan, another home health care company located in Lincolnwood, Illinois. (Gov't L.R. 56.1 Resp. ¶¶ 9-11; see Guerrero Plea Agreement ¶ 6.) They incorporated a third Illinois home health care business, Patient Home Services of Illinois, Inc. ("PHSI"), in April 2008. (Gov't L.R. 56.1 Resp. ¶¶ 9-10, 15.) Josephine and Richard were on the management teams for Josdan and PHSI. (Id. ¶ 10.) Claimant maintains that Josephine and Richard "funded Josdan and PHSI with assets that they improperly stripped from Donnarich." (Cl. L.R. 56.1 Stat. ¶ 12.) The Government admits that "at least some of Josdan's and PHSI's initial funding came...

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