A recent high profile case highlights the federal government’s ability to seize a convicted defendant’s accounts to satisfy an Order of Restitution after a conviction at trial or a guilty plea. The Second Circuit recently held that the retirement funds of Evan Greebel, the former convicted attorney and Martin Shkreli’s codefendant, could be seized in partial satisfaction of the restitution amount owed. Greebel was convicted in a separate 2017 trial for assisting his client Shkreli’s fraudulent taking of funds from Retrophin to pay Shkreli’s hedge fund debts, and for manipulating the stock price of Shkreli’s drug company. After conviction, Greebel was sentenced to 18 months in prison and ordered to pay $10.4 million in restitution.

In its opinion, the Second Circuit upheld the trial court’s decision that Greebel’s 401(k) accounts at his former law firm were subject to garnishment in an effort to collect the restitution amount. The Second Circuit held that the Mandatory Victims Restitution Act (MVRA) gives the government full access to retirement funds, and that ERISA’s prohibition on disbursing retirement funds to third parties is trumped by the MVRA.

It is well-established that under 18 U.S.C. § 3664(m)(1)(A), the Government may enforce a restitution order in the manner provided by subchapter B of Chapter 229, or 18 U.S.C. § 3613. An order of restitution may be executed in accordance with the practices and procedures for the enforcement of a civil judgment under federal law or state law or by all other available and reasonable means. 18 U.S.C. § 3613 (a) and (f).

The MVRA broadly permits the United States to enforce a restitution order “against all property or rights to property of the person fined.” Pursuant to §3613(c), once restitution is ordered, all the defendant’s property becomes subject to a lien in favor of the United States, and for purposes of debt collection, such lien is treated like a tax lien. §3613(c). Thus, any property the IRS can reach to satisfy a tax lien, a sentencing court can also reach in a restitution order – bank accounts, retirement funds, stock accounts and even Social Security benefits. Additionally, while periodic payments (usually monthly payments through the Probation Department) in satisfaction of a restitution order are limited to 25% of the defendant’s disposable income, one time lump sums payments, such as the garnishment of a retirement or bank account, are not limited.

The only issue left unanswered by the Second Circuit in Greebel was whether the government could seize all the funds, or whether it had to leave the defendant sufficient funds to pay the 10% tax penalty for early withdrawal of retirement funds. In many instances, the amount left to a defendant to pay tax penalties and taxes on garnishment of retirement accounts can be negotiated with the government.

Stahl Gasiorowski Criminal Defense Attorneys have represented scores of clients facing restitution and forfeiture orders and garnishments. We actively and aggressively protect clients’ rights. To contact Mr. Stahl, call 908.301.9001 for the NJ office and 212.755.3300 for the NYC office, or email Mr. Stahl at rstahl@stahlesq.com.

The Department of Justice just announced charges against 21 individuals in a nationwide crackdown of COVID-19 related prosecutions that resulted in $150 million worth of fraud. The schemes were varied and involved medical doctors, medical labs, marketers and others in the healthcare field.

For instance, two owners of a lab in California allegedly billed more than $125 million in fraudulent claims. In Maryland and New York drive through test site operators are accused of using confidential patient information to bill for lengthy office visits that never occurred. In New Jersey, five individuals were accused of paying or receiving kickbacks for referring COVID tests to a particular lab. Even though the tests were medically necessary, and the lab only billed the allowable rate to the government program, the lab was accused of violating the anti-kickback statute that prohibits paying individuals or companies to refer tests.

The Maryland case charged a physician with submitting false claims to Medicare and private insurers. The defendant owned drive through COVID testing sites. Employees gathered patient information at the sites and later submitted false claims for complex in office visits for other healthcare procedures that never occurred.

In Florida, a registered nurse was charged with signing huge numbers of medically unnecessary doctor’s orders in exchange for sham telemedicine consulting fees. Another case in Florida charged individuals with fraudulent Medicare billing for medical equipment that was obtained by paying kickbacks to marketing companies that solicited patients for equipment they didn’t need.

In other schemes, defendants in California were charged with allegedly counterfeiting vaccine cards. Another case involved a hospital pharmacy director who obtained authentic Moderna dose lot numbers and used them to falsify vaccine ecards.

In New Jersey, one of the District’s first healthcare fraud trials just resulted in a guilty verdict against a medical sales representative of a diagnostic lab who paid kickbacks to a physician for referring tests to the lab. In an effort to disguise the kickbacks, the marketer placed the physician’s medical assistant on the lab’s payroll. In a related scheme, the marketer was paid for promoting medically unnecessary compound medicines that certain insurance plans covered. The defendant and others paid kickbacks to doctors to prescribe the unnecessary compounds without even examining the patients.

Other cases have charged individuals with fraudulently obtaining relief funds from the Coronavirus Aid, Relief and Economic Security Act. A 2020 bill that provided billion in emergency financial assistance.

These and scores of other cases highlight federal authorities continuing investigations and DOJ’s aggressive prosecution of a variety of healthcare fraud schemes. These schemes involve medically unnecessary compound medicines, genetic cancer tests, kickbacks on prescriptions for DME – durable medical equipment – such as braces, as well as COVID-19 tests.

Federal healthcare laws and regulations are complex. There are countless ways for doctors, pharmacists, lab owners and marketers to violate these laws. Stahl Gasiorowski Criminal Defense Lawyers have extensive experience representing individuals and corporations accused of healthcare fraud. To contact the firm’s NJ office, call 908.301.9001 and to contact the firm’s NYC office, call 212.755.3300, or email Mr. Stahl at rgs@sgdefenselaw.com.

The law in this state that makes forgery a crime makes it clear that the act must be intentional, and that it must be undertaken with the intent to defraud or injure someone else. How one can go about accomplishing these objectives can involve more than simply faking someone else’s signature on a blank line.

To begin with, altering an otherwise valid writing by someone else is a form of forgery. This can be something other than altering a signature; it can be something like making changes to an existing record or creating a false communication, and then passing it off as being from another person, such as the will example above, or to make a defamatory comment in another person’s name in the hope that the reaction will harm that person.

Another thing to keep in mind is that the law considers a “writing” to be more than just a document. Writings can include non-documentary items, including:

• Credit or debit cards
• Identity cards
• Coins
• Stamps
• Sales receipts
• UPC labels
• Trademark or other symbols

The information in the false writing can be personal identifying information, which goes beyond names and addresses or phone numbers to include taxpayer or employee identification, account numbers, or even biometric data, it is possible to “forge” someone else’s fingerprint, for example, or a retinal scan or voiceprint.

The most important consideration to remember is not the mechanisms of possible forgery, but the intent element. Not every altered or newly-created writing will qualify as a forgery if the prosecution cannot prove that it was made with the intent to defraud or injure another. This is where having experienced defense counsel can be crucial, because if the intent element of the crime can be cast into reasonable doubt, it may be possible to avoid a conviction for forgery even if the other elements exist.

Violations of any number of federal statutes have the potential to jeopardize a business and can, in many cases, result in individuals going to prison. In addition, restitution and forfeiture may be applicable. Below, we delve into some of the most commonly encountered federal business fraud statutes.

The Foreign Corrupt Practices Act

The Foreign Corrupt Practices Act applies to any company that must file a report with the SEC, including companies based in the United States, their subsidiaries and those listed on the stock exchanges. This Act bars payments to foreign governments or officials to obtain a competitive advantage.

Wire Fraud and Mail Fraud

Mail fraud and wire fraud are used extensively by federal authorities. Mail fraud involves the use of the mail in a scheme to defraud another person or entity. This broad-based statute includes any mailing of a document that contains a materially false statement. “Mail” is defined as documents sent via public or private carriers. The document is not required to cross state lines to qualify as mail fraud. Wire fraud is similar to mail fraud except it includes just about all forms of media including e-mail, telephone, TV, radio, Internet, telex and facsimile.

Bankruptcy Fraud

This type of business fraud involves defrauding through a document, petition or representation tied to a bankruptcy proceeding. It includes material misrepresentations as to assets and ownership interests in assets.

Health Care Fraud

Health care fraud is the defrauding of any private or public health care benefit program. The definition encompasses the payment for/delivery of services. This a very active area of investigation for federal and state authorities. It includes paying others for patient referrals, upcoding, over billing, ordering unnecessary tests or procedures and submitting false claims. False statements made to procure payment from a federal health care program also qualifies as health care fraud.

Securities Fraud

This type of fraud refers to the sale or purchase of an investment where the return is based on the effort of a third party. An example of such an offense is the trading of stocks with insider information. The fraudulent marking of prices or material false statements in the prospectus are also forms of securities fraud.

The False Claims Act

Those who knowingly make or conspire to produce erroneous financial claims to the government can be found guilty of this type of fraud. It commonly applies to Medicaid and Medicare. False statements made on a bill can qualify as separate offenses. The operative word in this statute’s definition is “knowingly”. “Knowingly” is defined as actual knowledge, intentional ignorance or a “reckless” disregard for what is true. Examples of false claims include false affirmative certifications of compliance with federal regulations, billing and claims that stand for compliance with regulations, statutes or contract terms.

Material False Statements

An individual who makes a materially false statement to an official of the federal government or makes a false record of entry is committing a criminal offense. Though individuals certainly have the right to remain silent, they do not have the right to lie.

The Dodd-Frank Act of 2010

Passed into law as a result of the last recession, this Act is meant to spur improved transparency and accountability on Wall Street, protect investors and reform mortgages. However, its Constitutionality is currently being challenged in federal court. Stay tuned for developments.

Bank Fraud

Bank fraud is an attempt (or the actual execution) to defraud a federally insured financial institution. Bank fraud encompasses securities, funds and property owned or possessed by the institution that has been victimized. Bank fraud can still apply even if the institution does not suffer an actual loss. It also includes submitting materially false statements on loan applications, whether the loan is for a car, car lease, home mortgage, or revolving line of credit.

Uniform Fraudulent Transfer Act

Fraudulent conveyances that occur in various contexts, such as bankruptcy, have tripped up numerous individuals and businesses in the past. The language of these statutes is broad enough to include activity that is meant to defraud, delay or disrupt a creditor. Courts can go back as far as six years to uncover evidence of this style of fraud. An example in the context of the private sector is a leveraged buyout in which a company borrows against its assets and acquires stock. Such an action can be scrutinized as a fraudulent conveyance.

The Computer Fraud and Abuse Act

This Act bars the procurement of national security information, infiltrating confidential information stored on computers, password trafficking, damaging transmissions/access and any extortion involving threats to damage computing devices. It is worth noting that cell phones qualify as “computing devices”.

Immigration Fraud

Those who fraudulently use immigration documents such as border crossing cards, permits and visas can be found guilty of immigration fraud.

The Sarbanes-Oxley Act of 2002

This Act has eleven unique “Titles”, each with a section that has been written in response to corporate wrong-doings. Its purpose is to prevent future corporate scandals by requiring in-depth financial disclosures and auditor independence.

The experienced attorneys at Stahl Gasiorowski Criminal Defense Lawyers aggressively defend individuals charged with complex federal and state crimes. Founder Robert G. Stahl is recognized as one of the top criminal defense attorneys in the NY/NJ area for his skills, knowledge and success. To contact us to discuss your case, call 908.301.9001 for our NJ office and 212.755.3300 for our NYC office or email us at rgs@sgdefenselaw.com.