United States v. Aleff, No. 14-1527 (8th Cir. 2014)
Annotate this CaseDefendants pled guilty to conspiracy to defraud the United States by submitting false applications for loan-deficiency payments and were ordered to pay restitution. The United States then filed suit against defendants under the False Claims Act, 31 U.S.C. 3729-33, and the district court granted summary judgment for the United States, ordering defendants and their business to pay a penalty. Defendants appealed. The court rejected defendants' argument that their guilty pleas are not preclusive because no issues were actually litigated in the criminal proceeding because collateral estoppel applies equally whether the previous criminal conviction was based on a jury verdict or a plea of guilty, and defendant Slominski cites no authority that sentencing findings negate the preclusive effect of guilty pleas or admissions; the $1.3 million judgment is not punishment barred by the Double Jeopardy Clause where the Act is not so punitive that it is a criminal sanction; and the $1.3 million judgment is not an unconstitutionally excessive fine violating the Excessive Fines Clause where the monetary sanction here is not grossly disproportional.
Court Description: Civil Case - False Claims Act. After pleading guilty to conspiring to defraud the United States by submitting false application for loan deficiency payments and ordered to pay restitution, appellants appeal from the government's subsequent action under the False Claims Act and imposition of $1.3 million penalty. Guilty plea established the essential elements of the false claim act claim. Sentencing finding of diminished capacity did not negate preclusive effect of guilty plea or admission and did not raise a factual issue whether appellant knowingly presented a false claim. False Claims Act does not implicate the Double Jeopardy Clause, as the FCA is not punishment and treble damages are compensatory not punitive. Penalty imposed did not violate the Excessive Fines Clause. The monetary sanction is not grossly disproportional. Judgment is affirmed.
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