US v. Poulin

• Decision Date: 12 February 2010
• Docket Number: Criminal Action No. 2:09cr49.
• Citation: 690 F. Supp.2d 415
• Parties: UNITED STATES of America, Plaintiff, v. Ronald POULIN, Defendant.
• Court: U.S. District Court — Eastern District of Virginia

690 F.Supp.2d 415

UNITED STATES of America, Plaintiff, v. Ronald POULIN, Defendant.

Criminal Action No. 2:09cr49.

United States District Court, E.D. Virginia, Norfolk Division.

February 12, 2010.

Alan Mark Salsbury, Katherine Lee Martin, Scott Christopher Alleman, U.S. Attorney's Office, Norfolk, VA, G. Wingate Grant, Richmond, VA, for Plaintiff.

David Glenn Barger, Greensberg Traurig, LLP, McLean, VA, Richard Carroll Klugh, Courtney Montiero, Law Offices of Richard C. Klugh, Miami, FL, for Defendant.

MEMORANDUM OPINION

MARK S. DAVIS, District Judge.

This matter is before the Court on the Motion for Preliminary Order of Forfeiture filed by Plaintiff United States of America ("Government"). After briefing by the parties, the Court conducted a hearing on January 11, 2010. By separate order today, the Court granted the Government's motion, in part, and entered a preliminary order of forfeiture. Set forth in this Memorandum Opinion are the reasons for issuing such order.

I. PROCEDURAL BACKGROUND

On April 3, 2009, a federal grand jury returned a forty-five count indictment charging Defendant, Dr. Ronald Poulin ("Poulin" or "Defendant"), with Health Care Fraud (Count 1), Statements Relating to Health Care Fraud (Counts 2-44), and Alteration of Records to Obstruct Investigation (Count 45). As described more fully in this Court's Opinion and Order of Nov. 24, 2009, the allegations focused on Poulin's billings to the Government's Medicare and TRICARE health insurance programs. United States v. Poulin, No. 2:09cr49, 2009 WL 4249900 (E.D.Va. Nov. 24, 2009). Also included in the Indictment was a forfeiture allegation advising the Defendant that, if he was convicted of the health care fraud offense in Count One, the Government would seek forfeiture of various property pursuant to 18 U.S.C. § 982(a)(7), 21 U.S.C. § 853(p), and Rule 32.2 of the Federal Rules of Criminal Procedure.

More specifically, the Indictment's forfeiture allegation states that the Government will request forfeiture of any "property, real or personal, which constitutes or is derived from gross proceeds traceable to the health care offense in Count One." (Indict, at 10.) The allegation goes on to state that "the property subject to forfeiture includes but is not limited to . . . a sum of money of at least $850,000.00, which is the total amount of gross proceeds of the offense charged in Count One." (Indict, at 10.) The allegation further provides that additional property subject to forfeiture includes Defendant's investment and bank accounts, real property, vehicles, recreational boat, and medical practice.

Prior to trial, the Government dismissed Counts Twenty-two (22) through Thirty-six (36), Count Forty (40), and Count Forty-one (41). On November 17, 2009, a jury found the Defendant guilty of the twenty-eight (28) remaining counts. The parties did not raise any additional issues following the verdict and the Court excused the jury. The Court then scheduled sentencing for March 15, 2010.

On December 14, 2009, the Government submitted a Motion for Preliminary Order of Forfeiture. Defendant responded, opposing such motion, on December 28, 2009. The Government filed its reply on December 30, 2009. The Court heard oral argument on the Government's motion on January 11, 2010, in order to resolve the matter "sufficiently in advance of sentencing to allow the parties to suggest revisions or modifications before the order becomes final," as is required by Rule 32.2(b)(2)(B) of the Federal Rules of Criminal Procedure. By separate order, the Court today entered a preliminary order of forfeiture accompanied by this Memorandum Opinion.

II. DISCUSSION

The Government moves for a preliminary order of forfeiture pursuant to 18 U.S.C. § 982(a)(7). The Government primarily requests a money judgment in the amount of $1,326,852.70, which it claims represents the gross proceeds traceable to Defendant's health care fraud. Because the Government has been unable to locate any such proceeds, it also moves for an order requiring Defendant to forfeit substitute assets up to the unavailable amount, pursuant to 21 U.S.C. § 853(p). As a preliminary matter, the Court observes that successfully navigating the criminal forfeiture statutes can be a challenging endeavor. For this reason, before addressing the Government's forfeiture request in this case, the Court begins with a brief overview of the relevant forfeiture statutes and procedural rules.

A. Relevant Law¹

Section 982(a)(7) requires a court to order a defendant convicted of a federal health care offense to forfeit property that constitutes, or is derived from, gross proceeds traceable to the violation.² 18 U.S.C. § 982(a)(7). The plain language of the statute provides that such forfeiture is mandatory. Id.; see United States v. Patel, No. 06-60006, 2009 WL 1579526, at *20 (W.D.La. June 3, 2009) ("The mandatory language of this statute leaves the Court absolutely no discretion in imposing this portion of the sentence."). Although § 982 does not itself set forth the procedures for forfeiture, it expressly incorporates the provisions in 21 U.S.C. § 853.³ 18 U.S.C. § 982(b)(1). In addition to providing guidance as to the proper means by which forfeitable property should be seized and disposed of, § 853 defines, more fully than § 982, what property is subject to forfeiture. 21

The procedure for forfeiture of assets in a criminal case such as this is further governed by Federal Rule of Criminal Procedure 32.2.⁴ In order for a court to enter a judgment of forfeiture following a finding of guilt, the government must first have notified the defendant, either through the indictment or the information, of its intent to seek forfeiture as part of any sentence. FED. R. CRIM PRO. 32.2(a). If this notice requirement is satisfied, the government may then pursue a forfeiture order by demanding either a money judgment, specific property, or substitute property. See FED. R. CRIM PRO. 32.2(b)(1)(A) & (b)(2)(A); United States v. Candelaria-Silva, 166 F.3d 19, 42 (1st Cir.1999) (recognizing that the government may seek a personal judgment, specific property, or substitute property); United States v. Davis, 177 F.Supp.2d 470, 484 (E.D.Va.2001) (relying on Candelaria to find that money judgments, specific property, and substitute property are all properly forfeitable). Despite this broad procedural grant, the court must "determine what property is subject to forfeiture under the applicable statute." FED. R. CRIM PRO. 32.2(b)(1)(A) (emphasis added); see also United States v. Surgent, No. 04-CR-364, 2009 WL 2525137, at *7 (E.D.N.Y. Aug. 17, 2009) (finding that a statute must authorize the form of forfeiture sought because Rule 32.2 only governs procedure). Furthermore, in cases where the government seeks specific property, "the court must determine whether the government has established the requisite nexus between the property and the offense." FED. R. CRIM PRO. 32.2(b)(1)(A). On the other hand, when the government seeks a money judgment, "the court must determine the amount of money that the defendant will be ordered to pay." Id.

To prevail on a motion requesting forfeiture under § 982, the government must prove by a preponderance of the evidence that forfeiture of the subject property is warranted. United States v. Cherry, 330 F.3d 658, 669-70 (4th Cir. 2003). The government may meet this burden "based on evidence already in the record ... or information presented by the parties at a hearing after the verdict or finding of guilt." FED. R.CRIM. PRO. 32.2(b)(1)(B). In addition, because the traditional rules of evidence do not typically apply to sentencing proceedings, courts may consider hearsay when determining forfeiture so long as it is sufficiently reliable. See id. ("The Court's determination may be based on . . . any other evidence or information . . . accepted by the court as relevant and reliable"); United States v. Ivanchukov, 405 F.Supp.2d 708, 709 n. 1 (E.D.Va.2005) (citing United States v. Higgs, 353 F.3d 281, 324 (4th Cir.2003) and United States v. Gaskin, No. 00-CR-6148, 2002 WL 459005, at *9 (W.D.N.Y. Jan. 8, 2002), aff'd, 364 F.3d 438 (2d Cir.2004)).

The statutes governing forfeitures relating to health care fraud provide that, in the event that the government is unable to recover "property, real or personal, that constitutes or is derived, directly or indirectly, from gross proceeds traceable to the commission of the offense," it may seek forfeiture of substitute property under 21 U.S.C § 853(p).⁵ See United States v. Wingerter, 369 F.Supp.2d 799, 805 (E.D.Va.2005) (finding that property forfeitable under § 982 includes, by incorporation pursuant to § 982(b)(1), substitute property described in § 853(p)). Section 853(p) applies if, "as a result of any act or omission of the defendant," the property originally sought by the government under § 982 either: (1) "cannot be located upon the exercise of due diligence"; (2) "has been transferred or sold to, or deposited with, a third party"; (3) "has been placed beyond the jurisdiction of the court"; (4) "has been substantially diminished in value"; or (5) "has been commingled with other property which cannot be divided without difficulty." 21 U.S.C. § 853(p)(1). If these conditions are met, a court must order a defendant to forfeit substitute property "up to the value of any property" originally sought. Id. at § 853(p)(2). As is the case under § 982, the government must prove its entitlement to forfeiture of substitute property by a preponderance of the evidence. See United States v. Tanner, 61 F.3d 231, 234 (4th Cir.1995) (holding that the preponderance of evidence standard applies to forfeitures sought pursuant to § 853).

B. Forfeiture Request

The Government seeks a money judgment in the amount of $1,326,852.70 for the gross proceeds traceable to the Defendant's health care offense. Before the Court may enter a preliminary order of forfeiture, it must first...