United States v. Balotin

1

UNITED STATES OF AMERICA, v. SCOTT BALOTIN THOMAS JONES

No. 3:19-cr-191-MMH-JBT

United States District Court, M.D. Florida, Jacksonville Division

August 30, 2023

ORDER

MARCIA MORALES HOWARD, UNITED STATES DISTRICT JUDGE

THIS CAUSE is before the Court on the United States' Amended Motion for Preliminary Order of Forfeiture for Proceeds and Specific Asset (Doc. 712; Jones Motion), filed May 4, 2023, and the United States' Third Amended Motion for Preliminary Order of Forfeiture for Proceeds and for Substitute Assets (Doc. 726; Balotin Motion), filed August 2 2023. Defendants Thomas Jones and Scott Balotin each filed a response in opposition to the respective motion applicable to him. See Response to the United States Amended Motion for Preliminary Order of Forfeiture for Proceeds and Specific Asset (Doc. 719; Jones Response), filed May 25 2023; Defendant Scott Balotin's Opposition to the United States' Third Amended Motion for Preliminary Order of Forfeiture for Proceeds and for Substitute Assets (Doc. 727) filed August 2, 2023. In his response, Balotin reasserts the arguments made in his response to the Government's second amended motion for forfeiture. See Defendant Scott Balotin's Opposition to the Government's Amended Motion for Preliminary Order of Forfeiture for Proceeds (Doc. 718; Balotin Response), filed May 25, 2023. Accordingly, this matter is ripe for review.^[1]

I. Background

Following a four-week jury trial, on October 18, 2021, the jury returned a verdict finding Balotin guilty as to the charges in Counts One and Twelve of the Indictment (Doc. 1; Indictment). See Verdict as to Scott Balotin (Doc. 522; Balotin Verdict). Specifically, the jury found Balotin guilty of conspiring to commit health care fraud in violation of 18 U.S.C. § 1349 (Count One) and engaging in an illegal monetary transaction in violation of 18 U.S.C. § 1957 and 18 U.S.C. § 2 (Count Twelve). See id. at 1, 3; see also Indictment at 1-8, 1213. The jury acquitted Balotin of Count Two, which charged the solicitation and receipt of a health care kickback in violation of 42 U.S.C. § 1320a-7b(b)(1)(A), and Count Ten, which charged the payment of a health care kickback in violation of 42 U.S.C. § 1320a-7b(b)(2)(A). See Balotin Verdict at 2. The jury also returned a verdict finding Jones guilty of conspiring to commit health care fraud (Count One) and engaging in an illegal monetary transaction (Count Seventeen). See Verdict as to Thomas Jones (Doc. 524; Jones Verdict) at 1, 3; see also Indictment at 1-8, 12-14. The jury found Jones not guilty of soliciting and receiving a health care kickback (Count Four) and of paying a health care kickback (Count Nine). See Jones Verdict at 2.

The Court retained the jury to determine whether two of Jones's specific properties are forfeitable. The jury found the requisite nexus between Jones's 2015 Cadillac Escalade, VIN 1GYS3PKJXFR68195 (Cadillac), and the offenses in Counts One and Seventeen. See Special Verdict Form as to Thomas Jones (Doc. 528; Forfeiture Verdict) at 1-2. However, the jury did not reach a verdict as to whether the real property located at 3691 S. Cathedral Oaks Place, Jacksonville, Florida 32217 (Cathedral Oaks Property), is forfeitable. See id. at 2.

II. Applicable Law

Section 982 of title 18 of the United States Code authorizes criminal forfeiture of property for Defendants' convictions. See 18 U.S.C. § 982(a)(1) (forfeiture for illegal monetary transactions); id. § 982(a)(7) (forfeiture for Federal health care offenses). Section 982 also incorporates the provisions of 21 U.S.C. § 853(p) regarding the forfeiture of substitute assets. See id. § 982(b)(1). Notably, criminal forfeiture “is a matter of sentencing” after a conviction for a substantive offense. United States v. Dicter, 198 F.3d 1284, 1289 (11th Cir. 1999). Because forfeiture is an aspect of sentencing, the Government only needs to prove the elements of forfeiture by a preponderance of the evidence. See id.; United States v. Hasson, 333 F.3d 1264, 1277-78 (11th Cir. 2003). If the Government meets its burden, forfeiture is mandatory. United States v. Waked Hatum, 969 F.3d 1156, 1162 (11th Cir. 2020); see 28 U.S.C. § 2461(c).

Rule 32.2 of the Federal Rules of Criminal Procedure (Rule(s)) governs the procedures for imposing criminal forfeiture. Rule 32.2(b)(1)(A) requires that, “[a]s soon as practical after a verdict or finding of guilty . . . on any count in an indictment or information regarding which criminal forfeiture is sought, the court must determine what property is subject to forfeiture under the applicable statute.” Rule 32.2(b)(1)(A). Under the rule, “[i]f the government seeks a personal money judgment, the court must determine the amount of money that the defendant will be ordered to pay.” Id.; see United States v. Elbeblawy, 899 F.3d 925, 940-41 (11th Cir. 2018) (finding that an in personam forfeiture money judgment against a defendant is authorized in a health care fraud conspiracy case); Waked Hatum, 969 F.3d at 1163-64 (same in a money laundering case). In a case where the Government seeks forfeiture of specific property such as real property, “the court must determine whether the government has established the requisite nexus between the property and the offense.” Rule 32.2(b)(1)(A); see In re Rothstein, Rosenfeldt, Adler, P.A., 717 F.3d 1205, 1212 (11th Cir. 2013). If the Government cannot establish the requisite nexus for specific property, the Government may still seek forfeiture of the property by showing that the requirements of 21 U.S.C. § 853(p) are met. See In re Rothstein, Rosenfeldt, Adler, P.A., 717 F.3d at 1212.

To make a forfeiture determination, the Court may rely “on evidence already in the record . . . and on any additional evidence or information submitted by the parties and accepted by the court as relevant and reliable.” Rule 32.2(b)(1)(B). The Federal Rules of Evidence do not apply. See Fed.R.Evid. 1101(d)(3). Although a court may not order forfeiture based on acquitted offenses, a court may consider “evidence introduced in support of those counts for other purposes” such as determining the proper amount of forfeiture for an offense of which the defendant was convicted. Hasson, 333 F.3d at 1279 n.19. Moreover, determining forfeiture is often not a precise calculation: “[n]umerous cases have upheld reasonable estimates for calculating criminal forfeiture.” United States v. Mazkouri, 945 F.3d 293, 306-07 (5th Cir. 2019) (collecting cases). “If the forfeiture is contested, on either party's request the court must conduct a hearing after the verdict or finding of guilty.”^[2] Rule 32.2(b)(1)(B).

Once the Court finds that property is subject to forfeiture, “it must promptly enter a preliminary order of forfeiture setting forth the amount of any money judgment, directing the forfeiture of specific property, and directing the forfeiture of any substitute property if the government has met the statutory criteria.” Rule 32.2(b)(2)(A). The Court must enter the preliminary order of forfeiture “without regard to any third party's interest in the property.” Id. Rule 32.2 also requires that, “[u]nless doing so is impractical, the court must enter the preliminary order sufficiently in advance of sentencing to allow the parties to suggest revisions or modifications before the order becomes final as to the defendant under Rule 32.2(b)(4).” Rule 32.2(b)(2)(B). “If, before sentencing, the court cannot identify all the specific property subject to forfeiture or calculate the total amount of the money judgment,” the Court may enter a general preliminary order of forfeiture. Rule 32.2(b)(2)(C). The Court's preliminary order of forfeiture becomes final as to the defendant “[a]t sentencing-or at any time before sentencing if the defendant consents.” Rule 32.2(b)(4)(A). Finally, Rule 32.2(e) provides the Court with continuing authority to enter a forfeiture order or amend an existing order when the Government later locates forfeitable assets or seeks substitute assets. See Rule 32.2(e)(1).

III. Discussion

Having carefully reviewed the parties' briefing and the applicable law, the Court finds that it is able to issue a preliminary order of forfeiture as to Counts Twelve and Seventeen. As to Count One, however, the Court has insufficient information to enter a specific preliminary order of forfeiture.

A. Count One: Proceeds of Health Care Fraud Conspiracy

With regard to Balotin, the Government asks the Court to enter a preliminary order of forfeiture for proceeds of the conspiracy to commit health care fraud charged in Count One in the amount of $2,763,945.66. See Balotin Motion at 1. The Government argues that the evidence at trial showed that this amount moved from TRICARE to Park and King Pharmacy and then to Balotin. See id. at 9-11. The Government asserts that it is seeking forfeiture of the net proceeds that Balotin received after the deductions for federal income tax, social security, and Medicare. See id. at 11-12. According to the Government, the $2.7 million it seeks to recover includes only sums traceable to the fraud conspiracy because Agent Corigliano “purposefully avoided any inclusion of proceeds that were either voided or that he could not completely trace from Park and King Pharmacy to Balotin's Suntrust 3416 account.” Id. at 14.

Balotin contends that the Court should deny the Government's request for a preliminary order of forfeiture for proceeds in the amount of $2,763,945.66. See Balotin Response at 1. Balotin argues that the Government has assumed that all of the money that Park and King Pharmacy paid to Balotin was proceeds of the health care fraud conspiracy charged in Count One. See id. at 5.

Balotin asserts that evidence shows that at least some of the claims paid by...