Government Allowed Writs of Attachment and Garnishment Against Defendants in Qui Tam Cases

 jimi-filipovski-189724-copy-300x176In the qui tam case of BlueWave Healthcare v. U.S., the government was allowed to execute writs of attachment against both real and personal property and writs of garnishment against bank accounts of the defendants under the Federal Debt Collection Procedures Act (FDCPA). The defendant’s attempted to appeal the denial of their motions to quash these writs, but this appeal was dismissed for lack of jurisdiction.

About the Case

The qui tam case was filed by Scarlett Lutz and Kayla Webster against BlueWave HealthCare Consultants, Robert Bradford Johnson, and Floyd Calhoun Dent in 2014. Lutz and Webster, the relators, alleged that the defendants had violated the Anti-Kickback Statute and the False Claims Act. They stated that the defendants arranged for illegal kickback payments to doctors, which were labeled processing and handling fees. The federal government intervened in the case in April of 2015.

Since the government believed the defendants were concealing and actively trying to dispose of their assets, it sought prejudgment remedies under the FDCPA, including writs against the defendant’s personal and real property and writs of garnishment against bank accounts for a total of $16.7 million. In February of 2016, the district court granted all but one of the government’s writs and the defendants filed motions to quash these writs. In May of 2016, the court denied the defendant’s motions, stating that the government satisfied all of the elements within the FDCPA, which led to the defendant’s appeal to the Fourth Circuit Court of Appeals.

Appealing the Writs of Attachment and Garnishment

The defendants claimed that the Circuit Court of Appeals had the right to review their motions to quash because they were similar to a collateral order or an injunction. The court disagreed with both of these arguments. The order derived from the motion did not fulfil the conditions for a collateral order, which required that it conclusively determined a disputed question, resolved an important issue separate from the merits of the action and was effectively unreviewable on appeal from a final order. The court found the motion was too intertwined with the merits of the qui tam case. The order also did not meet the requirements to be an injunction.

The Circuit Court of Appeal’s Conclusion

The court of appeals found the order was an unreviewable interlocutory order and dismissed the defendant’s appeal for lack of jurisdiction, leaving the government’s writs of attachment and garnishment in place. This ensures that these funds and assets, which may be used to satisfy a settlement or judgement against the defendants, cannot be wasted or disposed of prior to a conclusion of the case.

Do You Have Information About Fraud Against the Government?

If you have information that a business or individual is benefiting from fraudulent claims against the U.S. government, then you may be able to file a qui tam case on behalf of the government. If there is a successful end to the case, then you may be able to share in the final judgment. To learn more about qui tam actions and your rights as whistleblower, contact the San Francisco qui tam lawyers of Brod Law Firm at (800) 427-7020.

(image courtesy of Jimi Filipovski)