Opinion
CIVIL ACTION FILE NO. 1:19-CV-5340-MHC-JCF
2020-07-09
UNITED STATES of America, Petitioner, v. KAMAL KABAKIBOU, MD, PC d/b/a the Center for Pain Management, Respondent.
Anthony Christopher DeCinque, Office of the United States Attorney, Atlanta, GA, for Petitioner. Amanda R. Clark Palmer, Donald Franklin Samuel, Garland, Samuel & Loeb, P.C., Steven Howard Sadow, Law Office of Steven H. Sadow, P.C., Atlanta, GA, for Respondent.
Anthony Christopher DeCinque, Office of the United States Attorney, Atlanta, GA, for Petitioner.
Amanda R. Clark Palmer, Donald Franklin Samuel, Garland, Samuel & Loeb, P.C., Steven Howard Sadow, Law Office of Steven H. Sadow, P.C., Atlanta, GA, for Respondent.
ORDER
MARK H. COHEN, United States District Judge
This matter is before the Court on the Final Report and Recommendation ("R&R") of the Magistrate Judge [Doc. 13] recommending that Petitioner's Petition to Enforce a Civil Investigative Demand [Doc. 1] be granted. The Order for Service of the R&R [Doc. 14] provided notice that, in accordance with 28 U.S.C. § 636(b)(1), the parties were authorized to file objections within fourteen (14) days of the receipt of that Order. Respondent has timely filed his objections to the R&R ("Resp.’s Objs.") [Doc. 16].
123 In reviewing a Magistrate Judge's R&R, the district court "shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." 28 U.S.C. § 636(b)(1). "Parties filing objections to a magistrate's report and recommendation must specifically identify those findings objected to. Frivolous, conclusive, or general objections need not be considered by the district court." United States v. Schultz , 565 F.3d 1353, 1361 (11th Cir. 2009) (quoting Marsden v. Moore , 847 F.2d 1536, 1548 (11th Cir. 1988) ) (internal quotation marks omitted). Absent objection, the district court judge "may accept, reject, or modify, in whole or in part, the findings and recommendations made by the magistrate judge," 28 U.S.C. § 636(b)(1), and need only satisfy itself that there is no plain error on the face of the record in order to accept the recommendation. See United States v. Slay , 714 F.2d 1093, 1095 (11th Cir. 1983). In accordance with 28 U.S.C. § 636(b)(1) and Rule 72 of the Federal Rules of Civil Procedure, the Court has conducted a de novo review of those portions of the R&R to which Respondent objects and has reviewed the remainder of the R&R for plain error. See Slay , 714 F.2d at 1095.
I. BACKGROUND
The pertinent facts are largely undisputed. The United States Attorney's Office is conducting a civil investigation of Respondent's medical practice under the False Claims Act, 31 U.S.C. § 3729 et seq., based upon allegations that the practice billed the federal government for Medicare reimbursement payments for services that were not medically necessary or were not performed as billed. Civil Investigative Demand ("CID"), attached as Ex. 3 to Decl. of Anthony C. DeCinque ("DeCinque Decl.") [Doc. 1-1 at 11-33]. On September 27, 2019, the United States Attorney issued CID No. 2019-81-NDGA, pursuant to 31 U.S.C. § 3733(a), seeking information and documents relating to Respondent's practice. CID; DeCinque Decl. ¶ 10.
It appears that this was the second CID served by the United States Attorney on Respondent. The first was on June 7, 2019 (CID No. 2019-14-NDGA), which was answered by Respondent on July 11, 2019. DeCinque Decl. ¶¶ 7, 9.
A search warrant was executed at Respondent's practice nine days prior to the issuance of the CID. DeCinque Decl. ¶ 15 & Ex. 5 [Doc. 1-1 at 38-41]. Respondent's counsel responded by stating that Respondent would not comply with the CID without a court order requiring him to do so, but offered as a compromise that Respondent would respond to the CID if the United States Attorney's Office agreed not to share the responses to the CID with any individuals who are handling the criminal investigation. DeCinque Decl., Ex. 5 [Doc. 1-1 at 38-41]. The offer was declined, and the Petition to Enforce the CID was filed on October 18, 2019.
II. LEGAL STANDARD
The Department of Justice is authorized to investigate violations of the False Claims Act and to issue CIDs to obtain answers to interrogatories and the production of documentary material. 31 U.S.C. §§ 3730(a) & 3733(a). The Act provides a means for enforcing the CID:
Whenever any person fails to comply with any civil investigative demand issued under subsection (a), or whenever satisfactory copying or reproduction of any material requested in such demand cannot be done and such person refuses to surrender such material, the Attorney General may file, in the district court of the United States for any judicial district in which such person resides, is found, or transacts business, and serve upon such person a petition for an order of such court for the enforcement of the civil investigative demand.
Id. § 3733(j)(1).
4"It is well-settled that the role of a district court in a proceeding to enforce an administrative subpoena is sharply limited; inquiry is appropriate only into whether the evidence sought is material and relevant to a lawful purpose of the agency." E.E.O.C. v. Kloster Cruise Ltd. , 939 F.2d 920, 922 (11th Cir. 1991) (citations omitted); see also United States v. Feaster , 376 F.2d 147, 149 (5th Cir. 1967) ("In subpoena cases the Supreme Court has rejected claims that the court must satisfy itself that probable cause exists for the agency's contention that the subject of the subponena [sic] is covered by the statute; the only judicial inquiry to be made in enforcing an agency subpoena is whether the evidence sought is ‘plainly incompetent or irrelevant to any lawful purpose’ of the agency.") (quoting Endicott Johnson Corp. v. Perkins , 317 U.S. 501, 509, 63 S.Ct. 339, 87 L.Ed. 424 (1943) ).
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the Eleventh Circuit adopted as binding precedent the decisions of the Fifth Circuit rendered prior to October 1, 1981.
III. DISCUSSION
5 Respondent acknowledges that there is nothing inherently unlawful in the Government's pursuant of parallel civil and criminal proceedings against the same investigative target. Resp.’s Objs. at 3, 8.
There is no general federal constitutional, statutory, or common law rule barring the simultaneous prosecution of separate civil and criminal actions by different federal agencies against the same defendant involving the same transactions. Parallel civil and criminal proceedings instituted by different federal agencies are not uncommon occurrences because of the overlapping nature of federal civil and penal laws. The simultaneous prosecution of civil and criminal actions is generally unobjectionable because the federal government is entitled to vindicate the different interests promoted by different regulatory provisions even though it attempts to vindicate several interests simultaneously in different forums.
F.D.I.C. v. Maxxam, Inc. , 523 F.3d 566, 592 (5th Cir. 2008). Indeed, in United States v. Kordel , 397 U.S. 1, 90 S.Ct. 763, 25 L.Ed.2d 1 (1970), the United States Supreme Court approved the use of parallel civil and criminal investigations and prosecutions as necessary to protect the public interest, and noted, "It would stultify enforcement of federal law to require a governmental agency ... invariably to choose either to forgo recommendation of a criminal prosecution once it seeks civil relief, or to defer civil proceedings pending the ultimate outcome of a criminal trial." Id. at 11, 90 S.Ct. 763 (footnote omitted).
Although Respondent is certainly aware of a parallel criminal investigation, he contends that the United States Attorney's "refusal to reveal the nature of the criminal case, or the affidavit that supported the search warrant, deprives the Practice of the ability to intelligently decide how to respond to discovery, or who should respond, particularly to interrogatories." Resp.’s Objs. at 11. Respondent also speculates, without any evidence thereof, that the United States Attorney's Office is using the CID to obtain records for the criminal investigation that it could not obtain by use of the search warrant. Id. at 14.
Indeed, the only evidence before the Court indicates otherwise. DeCinque Decl. ¶ 14 (stating that Respondent's contention that the CID "was issued for the sole purpose of furthering a criminal investigation is not correct. The CID was issued to further my civil investigation."); ¶ 15 ("The execution of this search warrant did not affect the scope of CID No. 2019-81-NDGA in any manner. This CID would seek the same information and documents even if there had been no search. In fact, the CID would stand, unchanged, even if there were no criminal investigation.").
6 The government may act in bad faith if it brings a civil action solely for the purpose of obtaining evidence in a criminal prosecution or has failed to timely advise the defendant in its civil proceeding that it contemplates criminal prosecution. However, aside from Respondent's bald assertion, there is no evidence before the Court that the Government initiated a CID solely to collect evidence for a criminal case. See, e.g. , Kordel , 397 U.S. at 6, 90 S.Ct. 763 (holding the United States Food and Drug Administration's routine investigation was not done solely to obtain evidence supporting criminal charges).
Respondent has cited no authority to support his proposition that the Government should reveal the nature of the criminal case or produce the affidavit supporting the search warrant as a condition of Respondent's compliance with the CID. The two cases he relies upon are inapposite. In United States v. Scrushy , 366 F. Supp. 2d 1134 (N.D. Ala. 2005), the government gave the Security and Exchange Commission ("SEC") "advice or ‘preferences’ regarding the content of [an SEC] deposition and its location" in an attempt to gather evidence for its criminal investigation, of which the deponent unknowingly was a target. Id. at 1137. The court excluded the deposition testimony as evidence of the defendant's alleged perjury because the government "manipulated the simultaneous [criminal and civil] investigations for its own purposes" in order to procure it. Id. at 1140. The court stated that the "determining principle" for deciding whether the defendant's deposition testimony should be suppressed as a violation of due process is "the prosecution may use evidence acquired in a civil action in a subsequent criminal proceeding unless the defendant demonstrates that such use would violate his constitutional rights or depart from the proper administration of justice." Id. at 1138 (citation and emphasis omitted). Respondent has failed to raise such an inference in this case. In fact, unlike the defendants in Scrushy who were misled into believing there was no criminal investigation against them, Respondent is not "in the dark" about being a target of a criminal investigation, having been served with a search warrant prior to the issuance of the CID.
7 In United States v. Tweel , 550 F.2d 297, 299-300 (5th Cir. 1977), the former Fifth Circuit held that evidence obtained through an affirmative misrepresentation by an Internal Revenue Service ("IRS") agent (who failed to advise the taxpayer that the civil audit had been requested by the Justice Department's organized crime and racketeering section) may be suppressed as an unreasonable search in violation of the Fourth Amendment. " Tweel stands merely for the proposition that, when acting in their official capacity, IRS agents are expected to deal in an honest and forthright manner and may not abuse the power of their positions by deceiving a taxpayer in order to gain access to that taxpayer's files." United States v. Centennial Builders, Inc. , 747 F.2d 678, 682 (11th Cir. 1984). Unlike the accountants in Tweel , Respondent had actual knowledge of the criminal investigation through the issuance of the earlier search warrant. See Chris-Marine USA, Inc. v. United States , 892 F. Supp. 1437, 1453 (M.D. Fla. 1995) ("Unlike the accountants in Tweel , plaintiff's representatives here had actual knowledge of the Swedish criminal investigation since they knew the criminal search warrant had been issued.").
Nothing contained in either Scrushy or Tweel compels the government to reveal the affidavit supporting the search warrant that was executed on Respondent prior to Respondent complying with the CID in question. See United States v. Whispering Oaks Residential Care Facility, LLC , 673 F.3d 813, 818 (8th Cir. 2012) ("Whispering Oaks cites no legal authority for requiring the Government to justify its administrative subpoenas by revealing the identity of any informants, the information those informants may have provided, or any other facts revealing the motives behind a lawful investigation."). Respondent also fails to show that the CID was issued solely to obtain evidence for the criminal investigation. Indeed, the Government "showed its hand" less than ten days before the CID was issued by the execution of a search warrant confirming the existence of a separate criminal investigation. Given this fact, it is somewhat illogical to claim that the CID was issued to surreptitiously bolster a criminal case.
There is no dispute that the CID was lawfully issued, the information sought is material to the False Claims Act investigation, and is relevant to a lawful purpose of the issuing agency. Respondent has failed to establish any ground under which this Court should deny the Petition to Enforce the Civil Investigative Demand.
IV. CONCLUSION
Therefore, after consideration of Respondent's objections and a de novo review of the record, it is hereby ORDERED that Respondent's objections [Doc. 16] are
OVERRULED.
Accordingly, the Court APPROVES AND ADOPTS the Final Report and Recommendation [Doc. 13] as the Order of this Court. It is hereby ORDERED that Petitioner United States of America's Petition to Enforce Civil Investigative Demand No. 2019-81-NDGA [Doc. 1] is
GRANTED.
It is further ORDERED that Respondent shall provide the information and documents requested in CID No. 2019-81-NDGA within fourteen (14) days of the date of this Order or as otherwise agreed upon by Petitioner.
IT IS SO ORDERED this 9th day of July, 2020.
FINAL REPORT and RECOMMENDATION
J. Clay Fuller, United States Magistrate Judge
This matter is before the Court on the United States of America's Petition to Enforce a Civil Investigative Demand. (Doc. 1). Respondent has filed an opposition to the Government's request (Doc. 3), and Petitioner has submitted a reply (Doc. 6). Having considered the arguments presented by the parties in their filings, the undersigned concludes that no hearing is necessary to resolve these issues, and now turns to the merits.
DISCUSSION
The underlying procedural history and facts are not disputed. The United States of America served a civil investigative demand ("CID") on Respondent Kamal C. Kabakibou, MD. PC ("the Practice") seeking interrogatory responses and documents related to an investigation pursuant to the False Claims Act, 31 U.S.C. § 3729, et seq. The Practice has submitted substantial claims to various government health care programs in recent years. The Government asserts that an analysis of claims submitted by the Practice suggests that patients are prescribed opioids at rate and for a duration that exceeds other comparable practices.
A CID, like the one served on the Practice, is an administrative subpoena the Government may use to secure information in a False Claims Act investigation. United States v. Markwood, 48 F.3d 969, 976 (6th Cir. 1995). Where, as here, a party refuses to respond to a CID, the Government may file a petition seeking enforcement in the District Court. 31 U.S.C. § 3733(a)(1)(A) and (j)(1).
The CID at issue seeks information concerning opioid risk testing on the Practice's patients, and it also requests documents related to 289 specific patients who utilized government-payor medical insurance, such as Medicare. The Practice refused to respond to the CID, prompting the Government to file this action.
The Court's review of an administrative subpoena is "sharply limited." United States v. Vici Marketing, LLC, Case No. 8:15-cv-444-T-33TGW, 2020 WL 1677335 (M.D. Fla. Apr. 6, 2020) (noting that since a CID is an administrative subpoena the Court's review is "sharply limited" to whether the information sought is "material and relevant to a lawful purpose of the agency.") An agency need not show probable cause, but instead may choose to investigate based "merely on suspicion" that the law is being violated. United States v. Morton Salt Co., 338 U.S. 632, 642-43, 70 S.Ct. 357, 94 L.Ed. 401 (1950). An investigative subpoena may be found "sufficient" where "the inquiry is within the authority of the agency, the demand is not too indefinite, and the information sought is reasonably relevant." Id. at 652, 70 S.Ct. 357.
This standard does not change simply because the Government pursues civil investigative mechanisms while criminal proceedings are contemplated or pending:
There is no general federal constitutional, statutory, or common law rule barring the simultaneous prosecution of separate civil and criminal actions by different federal agencies against the same defendant involving the same transactions. Parallel civil and criminal proceedings instituted by different federal agencies are not uncommon occurrences because of the overlapping nature of federal civil and penal laws. The simultaneous prosecution of civil and criminal actions is generally unobjectionable because the federal government is entitled to vindicate the different interests promoted by different regulatory provisions even though it attempts to vindicate several interests simultaneously in different forums.
United States v. Avery, 1:14-cr-379-MHC-JFK, 2016 WL 8671970 (N.D. Ga. February 5, 2016) (quoting United States v. Simcho, 326 Fed. App'x. 791, 792 (5th Cir. 2009) ) adopted by 2016 WL 1126527 (N.D. Ga. Mar. 21, 2016). As parallel proceedings are commonplace, sharing of information gleaned from different proceedings is generally appropriate. United States v. Rhodes, No. 18-cr-887, 2019 WL 3162221, at *1 (S.D.N.Y. July 16, 2019) ("coordination and sharing between the lawyers and agents on the criminal prosecution team, on the one hand, and the SEC, on the other, is, in itself, unexceptional and unproblematic.").
While there is nothing inherently wrong with the Government pursuing simultaneous civil and criminal investigations, the conduct in pursuing those investigations is still subject to limitation. The Supreme Court has identified certain conditions which may justify a court to intervene to prevent the Government from securing an unfair advantage through abusive conduct:
We do not deal here with a case where the Government has brought a civil action solely to obtain evidence for its criminal prosecution or has failed to advise the defendant in its civil proceeding that it contemplates his criminal prosecution; nor with a case where the defendant is without counsel or reasonably fears prejudice from adverse pretrial publicity or other unfair injury; nor with any other special circumstances that might suggest the unconstitutionality or even the impropriety of this criminal prosecution.
United States v. Kordel, 397 U.S. 1, 11-12, 90 S.Ct. 763, 25 L.Ed.2d 1 (1970). Respondent contends that the fact that the Government has superior knowledge of the criminal investigation creates a level of abuse that justifies quashing the CID.
The relative burdens on the parties help frame this inquiry. If the Government can establish that the subpoena was properly issued, it must be enforced "unless the party opposing enforcement can make a sufficient showing that summary enforcement would abuse the court's process." Inspector Gen. of U.S. Dep't of Agric. v. Griffin, 972 F. Supp. 676, 678 (M.D. Ga. 1997). The recipient of the subpoena bears a "heavy" burden. United States v. Medic House, Inc., 736 F. Supp. 1531, 1536 (W.D. Mo. 1989). Respondent does not dispute that the subpoena was properly issued,1 so success in defeating the Government's motion depends on a substantial showing that allowing the inquiry to stand would abuse the Court's process.
In trying to meet this stiff burden, Respondent relies on two cases where courts imposed consequences2 for the use of deception regarding the interaction between civil matters and potential criminal cases. See United States v. Scrushy, 366 F. Supp. 2d 1134 (N.D. Ala. 2005) ; see also United States v. Tweel, 550 F.2d 297 (5th Cir. 1977). In Tweel , when asked directly about the nature of the inquiry, an IRS agent lied and answered in a way that reasonably made a taxpayer believe that the investigation was similar to a prior inquiry, and therefore not criminal in nature. Tweel, 550 F.2d at 297. In Scrushy , the court concluded the government acted improperly when it secretly induced the defendant to hold his deposition in an SEC enforcement action in Birmingham, in hopes of securing false testimony to support a perjury charge in a later criminal case. Scrushy, 366 F. Supp. 2d at 1140. The facts present here, limited as they are at this time, fall far short of what occurred in the cases relied upon by Respondent.
The Practice fails to identify any affirmative misrepresentation on the part of the Government, and it does not point the Court to any duty to disclose that the Government may have breached by failing to reveal the complete nature of the investigation resulting in the search warrant. In addition, the material sought in the CID, medical records and the extent of any opioid risk testing undertaken by the Practice, appears closely tied to the subject matter of the False Claims Act investigation. At this juncture, these requests do not reflect any abuse of process, much less one that would justify squashing an otherwise unobjectionable CID.
CONCLUSION
For the reasons stated above, it is RECOMMENDED that the Petition To Enforce the Civil Investigative Demand (Doc. 1) be GRANTED. If the District Judge adopts this Report and Recommendation, it is further recommended that the Order adopting such should direct the Practice to provide Petitioner with the information and documents sought in the CID within fourteen days of the date of the entry of the Order or as otherwise agreed by the United States. The Clerk is DIRECTED to terminate the reference to the undersigned Magistrate Judge.
IT IS SO REPORTED and RECOMMENDED , this 10th day of June, 2020.