United States v. Bikundi

125 F.Supp.3d 178

United States of America,

v.Michael Bikundi, Sr., et al., Defendants.

Criminal Action No. 14–cr–0030 (BAH)

United States District Court, District of Columbia.

Signed August 28, 2015

Michelle A. Zamarin, Theodore L. Radway, Anthony D. Saler, Lionel Andre, U.S. Attorney's Office, Michael Justin Friedman, U.S. Department of Justice, Washington, DC, for Plaintiff.

William R. Martin, Kerry Brainard Verdi, Sasha Elizabeth H.W. Battle, Martin & Gitner, PLLC, Washington, DC, for Defendants.

MEMORANDUM OPINION

BERYL A. HOWELL, United States District Judge

The defendant Michael Bikundi, Sr. ("the defendant"), his wife, Florence Bikundi, and others, are charged in a multi-count Superseding Indictment for participating in an alleged scheme to defraud the District of Columbia Medicaid Program. Incident to the government's investigation and prosecution of the defendant and his alleged co-conspirators, the government seized significant assets alleged to have been derived from or otherwise involved in the charged offenses. Now pending before the Court is the defendant's motion to vacate partially the seizure of certain of these assets in order to release a total of $132,165.00 seized from four domestic bank accounts and one foreign bank account (the "Disputed Funds"). See Def.'s Mot. Vacate Seizure Warr. ("Def.'s Mot."), ECF No. 149. In conjunction with his motion, the defendant has requested a pretrial hearing to challenge the sufficiency of the government's evidence supporting the seizure of these funds. Id. at 1. For the reasons stated below, the defendant's request for a pretrial hearing is denied and the defendant's motion to vacate partially the seizure warrants is denied in part and granted in part.

I. BACKGROUND

On February 18, 2014, a U.S. Magistrate Judge of this Court issued seizure warrants for property, including sixty-four financial accounts and five vehicles, based upon a 136–page affidavit alleging probable cause to believe that the property was subject to criminal forfeiture (1) as property "involved in a transaction or attempted transaction in violation of" federal criminal money laundering statutes, and (2) as property "derived, directly or indirectly, from gross proceeds traceable to the commission of a Federal health care offense," pursuant to 18 U.S.C. §§ 982(a)(1) and (a)(7), respectively. Affidavit in Support of Seizure Warrants, dated February 18, 2014 ("First Aff.") ¶¶ 348–49, ECF No. 238–1.¹ The affidavit also alleged probable cause to believe that the listed property was subject to civil forfeiture, pursuant to 18 U.S.C. §§ 981(a)(1)(A) and (a)(1)(C). Id.

The following day, a grand jury indicted co-defendant Florence Bikundi on multiple counts of health care fraud and money laundering. Indictment, ECF No. 1. After further investigation, the grand jury returned a Superseding Indictment, on December 18, 2014, against eight additional defendants, including Michael Bikundi, who is charged with Conspiracy to Commit Health Care Fraud, in violation of 18 U.S.C. § 1349 (Count One); Health Care Fraud, in violation of 18 U.S.C. § 1347 (Count Two); Money Laundering Conspiracy, in violation of 18 U.S.C. § 1956(h) (Count Fifteen); Laundering of Monetary Instruments, in violation of 18 U.S.C. § 956(a)(1)(B)(i) (Counts Sixteen through Twenty–Two); and Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity, in violation of 18 U.S.C. § 1957 (Counts Twenty–Three through Twenty–Five). See Superseding Indictment, ECF No. 44.

While the original indictment contained a "Criminal Forfeiture Allegation" seeking forfeiture of a real property parcel in Mitchellville, Maryland, and a general money judgment "in the amount of at least $75,000,000," Indictment, Crim. Forfeiture Alleg. ¶¶ 1–2, the Superseding Indictment includes a more detailed "Forfeiture Allegation." Superseding Indictment, Forfeiture Alleg. Specifically, the Superseding Indictment seeks forfeiture, upon conviction of the health care fraud offenses alleged in Counts One, Two, Thirteen, or Fourteen,² of a money judgment "of at least $75,000,000," as well as eighty-seven listed properties—for which "the Grand Jury finds by probable cause ... [are] subject to forfeiture," under 18 U.S.C. § 982(a)(7). Id., Forfeiture Alleg. ¶ 1. The listed properties consist of six pieces of diamond jewelry, the real property parcel in Mitchellville, Maryland, as well as almost $73,000 in cash seized from that home, five vehicles, and funds held in seventy-four bank or other financial accounts, including the four domestic bank accounts at issue in the instant motion. Id . The Forfeiture Allegation further seeks forfeiture, without a specific grand jury probable cause finding, of property (1) "that constitutes or is derived, directly or indirectly, from gross proceeds traceable to" false statements in the submission of payment claims to the D.C. Medicaid Program, as charged in Counts Three through Twelve, under 18 U.S.C. § 982(a)(7), id. ¶ 2;³ and (2) that is "involved in" the money laundering offenses charged in Counts Fifteen through Twenty–Five, or "any property traceable to such property," under 18 U.S.C. § 982(a)(1), id. ¶ 3.

On September 5, 2014, a U.S. Magistrate Judge of this Court issued a second seizure warrant based upon a 15–page affidavit alleging probable cause to believe that five additional bank accounts held at Banque Internationale du Cameroun pour l'Epargne et le Credit ("BICEC") in Cameroon, including the foreign account at issue in the instant motion, were subject to both civil and criminal forfeiture, as property "traceable to" federal health care fraud and "involved in a transaction or attempted transaction in violation of" a federal money laundering offense, pursuant to 18 U.S.C. §§ 981(a)(1)(C) and 982(a)(1)(A). Affidavit in Support of Seizure Warrants, dated September 5, 2014 ("Second Aff.") ¶¶ 1, 33, ECF No. 245–1.⁴

The government subsequently filed a Notice of Bill of Particulars for the Forfeiture Allegation in the Superseding Indictment identifying the five BICEC bank accounts listed in the Second Affidavit as subject to criminal forfeiture under 18 U.S.C. § 982(a)(7), upon conviction of an offense alleged in Counts Three through Twelve. Bill of Particulars ¶ A, ECF No. 119. The Bill of Particulars also listed ninety-two specific properties, including the eighty-seven properties identified in the Forfeiture Allegation as well as the five newly identified BICEC accounts, as subject to criminal forfeiture under 18 U.S.C. § 982(a)(1) upon conviction of an offense alleged in Count Fifteen. Id. at ¶ B.

The defendant now seeks the release of a total of $132,165.00 previously held in four domestic bank accounts seized pursuant to the first seizure warrant and one of the BICEC accounts seized pursuant to the second seizure warrant. Def.'s Mot. at 3–5. The First Affidavit designates the four domestic accounts containing Disputed Funds as Accounts H, I, W and AA. First Aff. ¶ 1. For each account, the First Affidavit identifies a total amount of funds traceable to Medicaid payments. Id. ¶¶ 234, 236, 238, 240. In contrast to the traceable funds, however, the affidavit also lists "other" funds that are not alleged to be traceable to Medicaid payments. Id. Specifically, the First Affidavit alleges the following with regard to each account:

• Account H: Between November 2009 and December 2013, approximately $317, 241.06 was deposited into this account.Id. ¶ 234. The First Affidavit alleges that $309,729.20 of these funds are traceable to Medicaid payments, but that "[o]ther deposits to the account include $7,200.00 in cash and $311.86 in interest earned on the account." Id.

• Account I: Between November 2009 and January 2014, approximately $634,929.06 was deposited into this account. Id. ¶ 236. The First Affidavit alleges that $588,664.97 of these funds are traceable to Medicaid payments, but that "[o]ther deposits to the account include $5,500.00 deposited from third parties, $29,500.00 in cash deposits, and the deposit of a $10,000 cashier's check." Id.

• Account W: Between March 2012 and November 2013, at least $140,756.66 was deposited into this account. Id. ¶ 238. The First Affidavit alleges that $123,688.94 of these funds are traceable to Medicaid payments, but that "[t]he rest of the funds deposited into this account consist of $8,750.00 in checks from third parties, $8,100.00 in cash, and $217.72 in interest." Id.

• Account AA: Between March 2012 and November 2013, at least $464,771.16 was deposited into this account. Id. ¶ 240. The First Affidavit alleges that $430,360.00 of these funds are traceable to Medicaid payments, but "[o]ther deposits to the account include $17,500.00 in cash, $15,615.00 from the sale of a vehicle, and $126.16 in interest." Id.

Finally, the defendant seeks release of Disputed Funds from a seized BICEC account, XXX–121. Def.'s Mot. at 4–5. The Second Affidavit alleges that this account received deposits between May 12, 2008, when the defendant opened the account, and April 4, 2013, that originated in bank accounts referred to as Accounts AA and HHH in the First Affidavit. Second Aff. ¶ 14–17. To support the seizure of funds held in the BICEC account, the Second Affidavit incorporates the First Affidavit's allegations regarding Account AA and further alleges that Account HHH received funds traceable to Medicaid prior to being closed in March 2012. Id. The government has advised that the funds from BICEC account XXX–121 were transferred to a U.S. Department of Treasury Suspense Account on May 29,2015. Gov't Supp. Br. Def.'s Mot. Vacate Seizure Warr. ("Gov't Supp. Br.") at 2–3, ECF No. 244.

Noting that the First Affidavit explicitly indicates that certain seized funds are not directly traceable to any alleged illegal conduct, the defendant asserts that the government has failed to establish probable cause that the Disputed Funds were subject to seizure and asks the Court to order their release. Def.'s...