United States v. Van Dyck, No. 16-10160 (9th Cir. 2017)
Annotate this CaseA criminal forfeiture action does not constitute an "alternate remedy" to a civil qui tam action under the False Claims Act, entitling a relator to intervene in the criminal action and recover a share of the proceeds pursuant to 31 U.S.C. 3730(c)(5). In this case, the Ninth Circuit held that the district court correctly denied relators' motion to intervene in the criminal forfeiture proceeding because the proper remedy was through their FCA civil action. The panel rejected relators' arguments claiming otherwise. Furthermore, the district court did not abuse its discretion in denying an evidentiary hearing or in declining to impose sanctions on the government. Accordingly, the panel affirmed the judgment.
Court Description: Criminal Law. The panel affirmed the district court’s denial of a motion by two qui tam relators to intervene in a criminal forfeiture action so that they could recover a share of the proceeds. The relators worked for the criminal defendant, a licensed podiatrist who was convicted of health care fraud and against whom the government issued a personal forfeiture money judgment in the estimated amount of fraudulent claims paid by victim insurers. The relators filed a qui tam action against the criminal defendant pursuant to the False Claims Act. The panel held that the relators lack standing to intervene in the criminal forfeiture action, as they had no interest in the property when the criminal acts were committed, and they were not qualifying bonafide purchasers for value. The panel rejected the relators’ contention that the “alternate remedy” provisions of the False Claims Act permit a relator to intervene in a criminal action for the purpose of asserting a right to the proceeds of that action. The panel also rejected the relators’ argument that they have standing to intervene in the criminal action as “partial assignees of the government’s claims” under 21 U.S.C. § 853(n). The panel wrote that the relators’ sole statutory remedy is to commence a civil action. UNITED STATES V. SMITH 3 The panel held that the district court did not abuse its discretion in denying an evidentiary hearing or in declining to impose sanctions on the government.
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