United States v. Luis
966 F. Supp. 2d 1321
S.D. Fla.2013Background
- Government seeks temporary restraining order and preliminary injunction under 18 U.S.C. § 1345; Luis moves to modify restraining order to release assets for defense.
- Court granted the preliminary injunction and denied Luis’s modification motion.
- Statutory basis: § 1345 permits injunction to prevent alienation of property obtained from federal health care offenses or related violations, including substitution of unrestrained assets.
- Government must show probable cause that a federal health care offense occurred, $45 million in proceeds, and dissipated assets; court adopts probable cause burden in this context.
- Evidence showed Luis’s entities defrauded Medicare between 2006–2012 with $45 million in improper Medicare benefits and dissipation of assets through transfers and purchases; many assets unrecovered.
- Hearing: Luis had an evidentiary hearing with cross-examination of Special Agent Warren; CWs could not be cross-examined.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether probable cause supports a § 1345 injunction | Government contends probable cause established for offenses, amount, and dissipation. | Luis argues insufficient proof of offenses or proceeds to justify restraint. | Yes; probable cause supports restraining up to $45 million (reduced to at least $40.5 million). |
| Right to a hearing to challenge probable cause | Kaley-based due process allows hearing on asset restraints; hearing must be governed by Mathews factors. | No right to challenge the indictment’s validity; assets may be restrained without extensive hearing. | Luis entitled to a hearing challenging the basis for restraint; hearing conducted with cross-examination of agent Warren, but not CWs. |
| Application of safe-harbor provisions to kickbacks | Anti-kickback safe harbor may not apply to payments tied to referrals; safeties do not cover referral payments. | Safe harbor could shield some payments if they were for legitimate employment for covered services. | Safe harbor does not apply; payments to nurse/recruiters for referrals violate the Anti-kickback statute. |
| Ex post facto and § 1345 applicability to pre-March 2010 conduct | Older statute may cover conspiracies; § 1345 can reach conduct even before 2010. | Ex post facto concerns if the offense definition changed; limitation to pre-2010 conduct. | No ex post facto issue; conspiracy to pay kickbacks is a qualifying Federal health care offense under the older definition. |
| Sixth Amendment right to counsel as it relates to substitute assets | Keen right to spend untainted assets to hire counsel; substitute assets cannot be restrained. | No Sixth Amendment right to use substitute assets; substitute assets may be restrained under § 1345. | No Sixth Amendment right to use substitute assets to hire counsel; substitute assets may be restrained; assets for defense ability may be considered in discretionary release. |
Key Cases Cited
- United States v. Bissell, 866 F.2d 1343 (11th Cir. 1989) (probable cause standard and asset restraint analysis in § 1345 proceedings)
- Kaley v. United States (Kaley I), 579 F.3d 1246 (11th Cir. 2009) (Sixth Amendment context for asset restraint and hearing rights)
- Kaley v. United States (Kaley II), 677 F.3d 1316 (11th Cir. 2012) (concurring opinions addressing due process in asset restraint)
- Starks v. United States, 157 F.3d 833 (11th Cir. 1998) (safe harbor interpretation for employee payments not for covered items or services)
- Medina v. United States, 485 F.3d 1291 (11th Cir. 2007) (knowing false representation requirement for health care offenses)
- Caplin & Drysdale, Chartered v. United States, 491 U.S. 617 (1989) (Sixth Amendment implications for using another's money to hire counsel; substitute assets)
- In re Billman, 915 F.2d 916 (4th Cir. 1990) (no Sixth Amendment right to use substitute assets for counsel)
- United States v. Brown, 988 F.2d 658 (6th Cir. 1993) (elements of § 1345 injunctive relief and dissipation discussed)
- United States v. 1349 and related statutes, 18 U.S.C. § 1349 () (conspiracy provisions referenced in health care offense context)