United States District Court, S.D. Alabama, Southern Division
V. S. GRANADE SENIOR UNITED STATES DISTRICT JUDGE.
action is before the Court on the motion of Lori Carver to
intervene, or alternatively her verified petition to assert
an interest in property forfeited (Doc. 525), The
Government's response (Doc. 549) and Carver's reply
(Doc. 585). For the reasons explained below, the Court finds
that Carver's motion should be denied.
False Claims Act (FCA) prohibits any person from knowingly
submitting a false or fraudulent claim to the United States
for payment or approval or knowingly making any false
statement material to such a claim. 31 U.S.C. § 3729(a).
The Attorney General may bring a civil action under the FCA
in the name of the United States. 31 U.S.C. § 3730(a).
Alternatively, a private person-known as a
“relator”-may bring a qui tam action
“for the person and for the United States
Government.” 31 U.S.C. § 3730(b)(1). If a qui
tam action results in a recovery for the Government, the
relator shares in the award. See 31 U.S.C. §
3730(d). If the Government does not join the relator's
suit, but pursues an “alternative remedy, ” the
relator has the same rights to recover in that proceeding
that they would have had if the United States had joined in
the qui tam action. 31 U.S.C. § 3730(c)(5).
instant action, Carver filed a qui tam action on
August 1, 2013, asserting FCA claims against Defendants Couch
and Ruan. U.S. v. Physicians Pain Specialists of Alabama,
P.C. et al., 13-CV-392-WS-N, (S.D. Ala. 2013). Carver
amended her complaint on August 28, 2014 to add C&R
Pharmacy as a defendant and again on October 16, 2016 to add
Castle Medical, LLC, Insys Therapeutics, Inc., Industrial
Pharmacy Management, LLC, and Christopher Manfuso as
defendants. The Government did not join in Carver's
qui tam action. The Government pursued criminal
charges against Couch and Ruan under a Second Superseding
indictment that was issued in April 2016. (Doc. 269). On
February 23, 2017, a jury convicted Defendants Couch and Ruan
on 20 of 21 counts contained in the Second Superseding
Indictment on RICO charges, conspiracy to commit healthcare
fraud, drug charges, money laundering, and wire and mail
fraud. On March 2, 2017, preliminary orders of forfeiture
were entered (Docs. 504, 505), and on March 8, 2017, Couch
entered into an agreement with the Government on forfeiture.
(Docs. 516). Carver claims she is entitled to a share of the
contends that this criminal action against Couch and Ruan
constitutes an “alternative remedy” under the FCA
and thus, that she is entitled to share in the forfeited
assets the same as if the Government had joined in the
qui tam action and the assets had been forfeited
through the qui tam action. Carver cites an
unreported case in the Southern District of Indiana,
United States v. Bisig, 2005 WL 3532554 (S.D. Ind.
Dec. 21, 2005), that held that a criminal forfeiture
proceeding constitutes an “alternate recovery”
from which the relator may recover. The Government disagrees,
citing a case from the District of New Jersey, United
States v. Kurlander, 24 F.Supp.3d 417 (D.N.J. 2014),
that denied a motion by relators to intervene in a criminal
case, holding that a criminal forfeiture action does not
qualify as an “alternate remedy” under the FCA.
In Kurlander, the court discussed the Bisig
case at length and found it to be wrongly decided.
Kurlander, 24 F.Supp.3d at 422-23. Neither of these
cases is binding on this Court.
Eleventh Circuit has not addressed whether a criminal action
can qualify as an “alternate remedy” under the
FCA and a review of the Bisig, Kurlander
and other cases that have addressed the issue provides no
consensus or clarity to the facts presented here. See
e.g. United States v. WellCare Health Plans, Inc., 2011
WL 4431157, at *1 (M.D. Fla. Sept. 21, 2011) (denying
relator's intervention in criminal action where the
government joined in the qui tam action and the
defendant had agreed to a civil forfeiture); United
States v. Lustman, 2006 WL 1207145, at *2-3 (S.D. Ill.
May 4, 2006) (denying intervention in criminal action where
the government had joined in the qui tam action,
finding that § 3730(c)(5) “assumes that the
original qui tam action did not continue” and stating:
“Surely Congress would have explicitly specified
criminal prosecutions as an ‘alternate remedy' if
it intended the result urged here.”); United States
ex rel. Barajas v. United States, 258 F.3d 1004, 1012
(9th Cir. 2001) (holding that administrative proceedings
resulting in a settlement constituted an “alternate
Court turns next to the language of the FCA to determine
whether a relator can intervene in a criminal proceeding.
“The first rule in statutory construction is to
determine whether the language at issue has a plain and
unambiguous meaning with regard to the particular dispute. If
the statute's meaning is plain and unambiguous, there is
no need for further inquiry.” United
States v. Silva, 443 F.3d 795, 797-98 (11th Cir.
2006) (internal quotes omitted). “The plain language is
presumed to express congressional intent and will control a
court's interpretation.” United States v.
Fisher, 289 F.3d 1329, 1338 (11th Cir. 2002). A court
“should not interpret a statute in a manner
inconsistent with the plain language of the statute, unless
doing so would lead to an absurd result.”
Silva, 443 F.3d at 798. In the instant case the FCA
provides the following:
Notwithstanding subsection (b), the Government may elect to
pursue its claim through any alternate remedy available to
the Government, including any administrative proceeding to
determine a civil money penalty. If any such alternate remedy
is pursued in another proceeding, the person initiating the
action shall have the same rights in such proceeding as such
person would have had if the action had continued under this
section. Any finding of fact or conclusion of law made in
such other proceeding that has become final shall be
conclusive on all parties to an action under this section.
31 U.S.C. §3730(c)(5). While the statute uses the broad
word “any” to describe the allowable alternative
remedies, it specifies that “any alternate
remedy” includes “any administrative proceeding
to determine a civil money penalty” and makes no
mention of criminal proceedings. As pointed out in
Kurlander, a private party generally has no right to
intervene in a criminal proceeding. Kurlander 24
F.Supp.3d at 423. “It is well established that ‘a
private citizen lacks a judicially cognizable interest in the
prosecution or non-prosecution of another.' ”
Id. at 424 (quoting Linda R.S. v. Richard D. and
Texas, 410 U.S. 614, 619 (1973)). “The Supreme
Court has made clear that ‘a citizen lacks standing to
contest the policies of the prosecuting authority when he
himself is neither prosecuted nor threatened with
prosecution' and that criminal prosecutions have
‘special status' in our legal system.”
Id. (quoting Linda R.S., supra). Even crime
victims, who enjoy various statutory rights of participation,
have no right to intervene in the district court in a
criminal case. United States v. Laraneta, 700 F.3d
983, 985-86 (7th Cir. 2012).
criminal forfeiture procedures do not provide for the
intervention of third parties. A Court must enter a
preliminary order of forfeiture “without regard to any
third party's interest in the property” and third
parties claiming an interest in the property must file a
petition to be determined in an ancillary proceeding. Fed. R.
Crim. P. 32.2(b)(2)(A) & (c); 21 U.S.C. 853(n). Carver
concedes that she is not a proper petitioner under 21 U.S.C.
§ 853(n). (Doc. 585, p. 1). Carver does not qualify
under 853(n) because her legal interest did not vest in the
petitioner at the time the Defendants committed the crimes
and she is not a “bona fide purchaser for value of the
property” that at the time of purchase was
“reasonably without cause to believe that the property
was subject to forfeiture.” 21 U.S.C. §§
853(n)(6)(A) & 853(n)(6)(B). At the conclusion of the
ancillary proceeding, the Court must enter a final order of
forfeiture. Fed. R. Crim. P. 32.2(c). There is simply no
provision in the Federal Rules of Criminal Procedure for a
third party to intervene in a criminal proceeding to claim a
share of forfeited assets. United States v.
Kollintzas, 501 F.3d 796, 800 (7th Cir.2007). In fact 21
U.S.C. § 853(k) expressly bars intervention. Section
853(k) states the following:
as provided in subsection (n) of this section, no party
claiming an interest in property subject to forfeiture under
this section may--
(1) intervene in a trial or appeal of a criminal case
involving the forfeiture of such property under this section;
(2) commence an action at law or equity against the United
States concerning the validity of his alleged interest in the
property subsequent to the filing of an indictment or
information alleging that the property is subject to
forfeiture under this section.
ancillary proceeding constitutes the sole means by which a
third party can establish entitlement to the forfeited
property.” United States v. Chavous, 654
F.App'x 998, 1000 (11th Cir. 2016) (citing United
States v. Davenport, 668 F.3d 1316, 1320 (11th Cir.
2010)). “Third parties are barred from intervening in a
trial or appeal of a criminal case involving the forfeiture
of property, and are instead limited to participating in the
ancillary proceeding.” Id. (citing
Davenport, supra and 21 U.S.C. § 853(k)).
Accordingly, the Court finds that reading the FCA statute to
allow relators to ...