The 11th Circuit Court of Appeals has ruled that a qui tam relator is not entitled to intervene in criminal forfeiture proceedings that are derived from the relator’s False Claims Act (FCA) case in order to seek a share of the forfeited assets.
The FCA allows the government to intervene in a qui tam relator’s case or to pursue an alternate remedy. Pursuant to the FCA’s alternate-remedy provision, the relator is entitled to a share of the recovery even if the government pursues an alternate remedy.
Here, the relator brought a case against the two physicians who employed her. She alleged that the physicians submitted fraudulent claims to federal healthcare programs. The government did not intervene in the relator’s qui tam action. Instead, the government criminally charged both doctors and the charges in the indictments partially overlapped with the relator’s qui tam complaint. Both doctors were convicted of almost all of the charges levied against them, including forfeiture counts. The relator moved to intervene in the forfeiture proceedings using the alternate-remedy provision of the FCA, but the district court denied the relator’s motion to intervene and the relator appealed.
On appeal, the 11th Circuit held that the criminal forfeiture statutes barred third parties from intervening in forfeiture proceedings unless the third party either had a legal right to the property before the defendant committed the offense or the third party was a bona fide purchaser for value. The relator conceded that neither of the exceptions applied to her and the 11th Circuit ruled that the relator, therefore, had no right to intervene.
However, the 11th Circuit noted that its decision would not prevent the relator from receiving her relator’s share if the qui tam defendant is found civilly liable for damages under the FCA. In that case, the relator would be entitled to a share of the full amount of the damages award, including any amount that the qui tam defendant is able to credit against the qui tam award due to the previous forfeiture.
The appeal in United States v. Couch, No. 17-13402 (11th Cir. 2018), can be found here.