Can the Government Take My Money in a Healthcare Fraud Case?
Recently, Federal Authorities have been Relying on a New Tactic to Target Healthcare Providers and Other Individuals and Organizations Accused of Medicare, Medicaid, Tricare, and Department of Labor (DOL) Fraud: Civil or Criminal Asset Forfeiture.
As if healthcare providers and medical companies didn’t have enough to worry about. Although fraud targeting Medicare, Medicaid, Tricare, and the Department of Labor (DOL) healthcare benefit program has been an issue virtually since the dawn of these programs’ existence, federal healthcare fraud investigations have taken on a new turn in recent years.
Rather than focusing their efforts on organized fraud scams focused on intentionally siphoning billions of dollars from these programs, federal agents and prosecutors have turned their focus to legitimate healthcare providers and other program participants. While there are several reasons why, the simplest reason is: It’s easier. Instead of spending substantial resources trying to track down co-conspirators in international criminal organizations (which, to be clear, federal authorities are still doing as well), federal authorities are now devoting the majority of their healthcare fraud enforcement efforts toward targeting practitioners and businesses whose billing data are readily available.
This shift in focus has led to a wave of investigations targeting legitimate healthcare providers across the country. From allegations of intentional and unintentional billing errors to allegations of engaging in unlawful referral fee and kickback transactions, physicians, pharmacists, durable medical equipment (DME) companies, testing laboratories, telemedicine companies, marketing groups, and other individuals and entities are routinely being charged with civil and criminal healthcare fraud offenses. While the statutes that establish these offenses already impose recoupments, treble damages, steep fines, and other financial penalties (which often apply on a “per claim”) basis, federal prosecutors are now pursuing asset forfeitures in some cases as well.
Healthcare Fraud Charges and Asset Forfeitures Under 28 U.S.C. Section 1355
When Can Federal Prosecutors Pursue Asset Forfeiture?
Asset forfeiture is a remedy that is available to the federal government in many cases of healthcare fraud. The primary procedural federal asset forfeiture statute, 28 U.S.C. Section 1355, states in relevant part:
“(a) The district courts shall have original jurisdiction . . . of any action or proceeding for the recovery or enforcement of any fine, penalty, or forfeiture, pecuniary or otherwise, incurred under any Act of Congress. . . .
“(b) (1) A forfeiture action or proceeding may be brought in—(A) the district court for the district in which any of the acts or omissions giving rise to the forfeiture occurred, or (B) any other district where venue for the forfeiture action or proceeding is [authorized by statute].
“(2) Whenever property subject to forfeiture under the laws of the United States is located in a foreign country . . . an action or proceeding for forfeiture may be brought as provided in paragraph (1), or in the United States District court for the District of Columbia.”
While asset forfeiture is not a tool that is available to the federal government in all cases, due to the nature of most federal healthcare fraud investigations, physicians, pharmacists, company owners and executives, board members, and others targeted in these investigations will frequently be at risk for having their assets taken by the government in forfeiture proceedings. The majority of the civil and criminal offenses for which asset forfeiture can be imposed are listed in 18 U.S.C. Section 981 and 18 U.S.C. 982 (although various other federal statutes authorize forfeiture as well), including:
What Types of Assets Can Be Forfeited?
Many people assume that forfeiture involves the government freezing their bank account and perhaps raiding their home and seizing their personal property. While these are indeed two forms of forfeiture, asset forfeiture proceedings will often target other assets as well. For example, in forfeiture proceedings following healthcare fraud investigations, federal prosecutors will routinely seek seizure or freezing of:
- Retirement accounts
- Investment and brokerage accounts
- Checking and savings accounts
- Cash and personal property items (including vehicles and boats)
- Company assets
- Real property
Under the language of 28 U.S.C. Section 1355(b)(2) quoted above, federal authorities can pursue forfeiture of physical and intangible assets located in the United States and abroad.
With regard to real estate, forfeiture will typically be initiated through the legal procedure known as lis pendens. Essentially, this involves the government putting the world on notice that you have been charged with healthcare fraud. It effectively prevents you from selling your property (because virtually no one will want to buy a property that is subject to a federal government lis pendens claim), and prosecutors often use it as a leverage tool when seeking to convince targets and defendants to plead to federal charges. Once you are found liable, then the government can then take additional measures to step in and seize your property.
What are Potential Defenses to Asset Forfeiture in Federal Healthcare Fraud Cases?
When facing a federal healthcare fraud investigation and the potential for asset forfeiture, there are a number of potential defense strategies individuals can use. Of course, the best way to avoid forfeiture is to avoid liability for healthcare fraud, and this means challenging the substantive allegations against you. However, when disputing allegations of healthcare fraud, licensed practitioners, company executives, and others must be extremely careful to avoid “defenses” that could actually help the U.S. Attorney’s Office in its pursuit of charges. For example, trying to convince federal prosecutors that you did not intentionally overbill Medicare or pay a kickback will not protect you (unintentional violations can still lead to civil charges and forfeiture); and, even if you did not “successfully” defraud a federal healthcare benefit program, you could still be charged with attempt, conspiracy, and many of the other federal offenses that often attend to allegations of False Claims Act and Anti-Kickback Statute violations.
With regard to asset forfeiture specifically, some potential defense strategies include:
- Property Not Obtained as a Result of the Alleged Offense – Generally speaking, assets that were not obtained as a result of the alleged offense (or offenses) at issue are not subject to forfeiture. Of course, identifying the source of specific assets can be challenging (if not impossible), and this can potentially create issues for both you and the government. However, if you can clearly establish that certain assets were acquired through lawful means, then it may be possible to protect them from forfeiture proceedings.
- Lack of Knowledge of Illicit Source – In certain types of cases, it may possible to argue that you were not aware of the illicit source of assets in your possession. Although lack of knowledge is generally not a defense to healthcare fraud allegations (at least not to civil healthcare fraud allegations), there may be circumstances in which this type of defense is available.
- No Statutory Grounds for Forfeiture – Due to the complexity of healthcare fraud cases, in some instances, federal prosecutors may pursue forfeiture when forfeiture is not an available remedy under the specific statute (or statutes) pursuant to which you are being charged.
- Constitutional Protections – Due to the potentially-severe nature of asset forfeiture proceedings, in some cases it may also be possible to argue that forfeiture would constitute an “excessive fine” under the Eighth Amendment to the U.S. Constitution.
What Should I Do if I am Under Investigation or Facing an Indictment for Healthcare Fraud?
If you are under investigation or facing an indictment for healthcare fraud, you need to do everything possible to protect yourself and your property. Unless you intervene in the investigation and defend yourself effectively, the outcome is highly unlikely to be in your favor. As we mentioned, federal authorities are now emphasizing prosecution of legitimate program participants in Medicare, Medicaid, Tricare, and DOL fraud investigations, and we are now regularly seeing cases in which doctors, pharmacists, DME company and laboratory owners, hospices, home health agencies, and other individuals and entities are facing exposure to substantial financial penalties – and even federal imprisonment.
How can you defend yourself in a federal healthcare fraud investigation? While there are a number of steps you can (and should) take to protect yourself, the most important thing you can do is to engage experienced defense counsel right away. You need to do everything possible to prevent charges from being filed; and, if you cannot avoid charges entirely, you want to make sure that your charges are civil (rather than criminal) in nature. At Oberheiden, P.C., our attorneys have handled more than 1,000 federal healthcare fraud cases. We can use this experience to help protect you, but only if you give us a call.
Get a Free Case Assessment from the Federal Healthcare Fraud Defense Lawyers at Oberheiden, P.C.
For more information about how our attorneys can help protect your assets (and your freedom) during a federal healthcare fraud investigation, contact us now to schedule a free and confidential case assessment. To speak with a senior member of our federal healthcare fraud defense team as soon as possible, call 888-680-1745 or inquire online now.
Dr. Nick Oberheiden, founder of Oberheiden P.C., focuses his litigation practice on white-collar criminal defense, government investigations, SEC & FCPA enforcement, and commercial litigation.