United States District Court, D. Idaho
MEMORANDUM DECISION AND ORDER
Lynn Winmill, United States District Court Chief Judge
a jury trial, the defendant was convicted of health care
fraud and aggravated identity theft. At sentencing, the Court
issued a preliminary finding on amounts to be paid as
restitution and forfeiture, and scheduled an evidentiary
hearing to hear testimony and argument before making a final
determination as to those amounts. Following that hearing,
the Court ordered further briefing that has now been
received. For the reasons set forth below, the Court imposes
forfeiture in the sum of $847, 016.00, and restitution in the
sum of $139, 769.80.
was originally charged with 24 counts of health care fraud
and 24 counts of aggravated identity theft. The case went to
trial, and after the Government rested its case, the
defendant pled guilty to all counts. The 24 counts of health
care fraud that she pled guilty to alleged a scheme from
January 1, 2010 through December 31, 2013.
conclusion of the sentencing hearing, the Court issued a
preliminary finding that forfeiture be imposed in the amount
of $847, 016. That amount represents the gross receipts
received by defendant's clinic, reported on her IRS form
1040 Schedule C for the years 2010 to 2013. See Exhibit
Court also made a preliminary finding that restitution be
imposed in the amount of $549, 605.18. That figure was
computed by adding the amounts paid to the clinic by
insurance companies from defendant's billings for the
years 2010 to 2013. It did not include insurance company
payments to the clinic during times when there was no dentist
in the office for the years 2008 to 2009, a sum of $46,
946.21 sought by the Government.
Court then scheduled a hearing to take testimony and argument
on these amounts. That hearing was held and the Court
requested further briefing that has been received.
Government seeks forfeiture in the amount of $847, 016 and
restitution in the amount of $549, 605.18. The defendant asks
the Court to set the forfeiture amount at $126, 571.62 and
the restitution amount at $139, 769.80.
imposing a sentence on a person convicted of a health care
offense, courts “shall order the person to forfeit
property, real or personal, that constitutes or is derived,
directly or indirectly, from the gross proceeds traceable to
the commission of the offense.” See 18 U.S.C.
§ 982(a)(7). In criminal cases, the government must
prove by a preponderance of the evidence that property is
subject to forfeiture. See U.S. v. Garcia-Guizar,
160 F.3d 511, 517 (9th Cir.1998).
forfeiture process is governed by Rule 32.2 of the Federal
Rules of Criminal Procedure and 21 U.S.C. § 853.
U.S. v. Lazarenko, 476 F.3d 642, 648 (9th Cir.2007).
“Criminal forfeiture provisions operate in
personam against the assets of the defendant and serve
as part of the penalty for the defendant's
conviction.” U.S. v. Nava, 404 F.3d 1119, 1124
(9th Cir.2004). Criminal forfeiture reaches any property
involved in the offense or any property traceable as proceeds
to it. Lazarenko, 476 F.3d at 647. As to the amount
of the money judgment, “[t]he statute mandates that a
defendant forfeit a very specific amount-the proceeds of his
criminal activity, ” or in other words, the amount
“he received in connection with the commission of the
crime.” U.S. v. Casey, 444 F.3d 1071, 1076
(9th Cir.2006). The purpose is to “eliminate the gains
realized from criminal activity.” Id. at 1074.
Generally, proceeds are limited to funds involved in the
offenses of conviction, and should not be based on uncharged
or acquitted conduct. Nava, 404 F.3d at 1129 n. 5.
However, for offenses charging a “scheme or
artifice” - as was charged here - the court may forfeit
proceeds generated over the course of the entire scheme, not
just by the particular executions of it charged in the counts
of conviction. U.S. v. Pena, 2010 WL 2054442 at *3
(9th Cir. May 25, 2010) (holding that forfeiture
was “not limited to amounts related to the specific
checks and victims alleged in the twenty counts of
the trial, the Government established through the testimony
of several witnesses that between the years alleged in the
Superseding Indictment - 2010 to 2013 - all of the
defendant's billings were fraudulent. Those billings were
for (1) dental services done improperly by defendant; (2)
hygiene services done by the defendant and others without the
proper supervision of a dentist; and (3) dental services done
by contract dentists proceeding under the defendant's
misrepresentation that Dr. Fricke had seen the patient and
planned their treatment. During these years, Dr. Fricke was
completely disabled and not coming into the office or doing
any work. The defendant fraudulently misrepresented to
contract dentists that Dr. Fricke ...