United States District Court, E.D. Louisiana
UNITED STATES OF AMERICA EX REL. ZONELL WASHINGTON
MARK MORAD, ET AL.
ORDER AND REASONS
S. VANCE UNITED STATES DISTRICT JUDGE.
March 19, 2015, plaintiff United States, through relator
Zonell Washington, brought this qui tam False Claims
Act civil action against defendants Mark Morad, Paige
Okpalobi, Barbara Smith, Joe Ann Murthil, Latausha Dannel,
Roy Berkowitz, Winston Murray, Divini Luccioni, Christopher
White, Beverly Breaux, Medical Specialists of New Orleans,
Interlink Health Care Services, Memorial Home Health, Inc.,
Lakeland Health Care Services, Lexmark Health Care, LLC, and
Med Rite Pharmacy, Inc., d/b/a Medrite DME,
The complaint alleges that the defendants defrauded the
United States by submitting false claims for Medicare
reimbursement and used false records or statements to get the
false claims approved, all in violation of 31 U.S.C. §
3729(a)(1)(A) and (B). The complaint further alleges that
defendants conspired to defraud the Government in violation
of 31 U.S.C. § 3729(a)(1)(C). The complaint seeks a
judgment in an amount equal to three times the damages
sustained by the United States as a result of defendants'
actions, plus a civil penalty of not less than $5, 500 and
not more than $11, 000 for each statutory
did not respond to the complaint or to their summonses. On
October 10, 2016, after obtaining entries of default, relator
filed a motion for default judgment as to each defendant,
except Winston Murray. Relator also requested a hearing to
determine the amount of damage suffered by the Government
pursuant to Federal Rule of Civil Procedure
December 12, 2016, after finding that relator had alleged
facts showing prima facie violations of 31 U.S.C.
§§ 3729(a)(1)(A), (B), and (C), the Court entered a
default judgment against the defendants. The Court also
ordered relator to submit summary judgment-type evidence
establishing the amount of damages within 21 days of the
entry of the default judgment. In response, relator submits the
judgments entered against defendants in the criminal case
United States v. Morad, et al, No. CRIM. A. 13-101
(E.D. La.).Additionally, the United States submits a
statement of interest requesting that judgment be entered in
favor of the United States and that the Court not treat
related criminal proceedings against defendants as
“alternate remedies” for the purposes of 31
U.S.C. § 3730(d)(5).
the False Claims Act, any person who violates the Act is
“liable to the United States Government for a civil
penalty of not less than $5, 000 and not more than $10, 000,
as adjusted by the Federal Civil Penalties Adjustment Act of
1990 . . ., plus 3 times the amount of damages which the
Government sustains because of the act of that person.”
31 U.S.C. § 3729(a)(1). As adjusted, the penalty is now
between $5, 500 and $11, 000. See 28 C.F.R. §
85.3(a)(9). The statutory penalty is not limited to
“false claims, ” but attaches to “all
fraudulent attempts to cause the Government to pay out sums
of money.” United States v. Neifert-White Co.,
390 U.S. 228, 233 (1968); see also United States v.
Bornstein, 423 U.S. 303, 312 (1976) (noting that False
Claims Act imposes penalties “for the commission of
acts which cause false claims to be presented”);
United States ex rel. Schwedt v. Planning Research
Corp., 59 F.3d 196, 199 (D.C. Cir. 1995) (“Each
individual false claim or statement triggers the
statute's civil penalty.”).
Damages Sustained by Government
evidence of the damages that the Government has sustained as
a result of defendants' actions, relator submits the
judgments against the defendants in the criminal case against
them. The judgments indicate that defendants
Berkowitz, Breaux, Smith, White, Dannel, and Murthil caused
the Government losses of $4, 952, 816, $2, 057, 179.48, $9,
484, 939.85, $2, 272, 241.96, $2, 377, 938, and $14, 147,
295.28, respectively. The Court's finding on the amount
of damages suffered by the Government due to the actions of
each defendant is sufficient proof in the False Claims Act
context. See United States v. Boutte, 108 F.3d 332,
1997 WL 73792, at *1 (5th Cir. Feb. 10, 1997) (“The
criminal court's finding that the Government's loss
was $301, 627 is prima facie proof of that
fact.”). Further, the Supreme Court has established
that an order of restitution in a criminal case and a
subsequent civil penalty for the same acts do not violate the
Double Jeopardy Clause. See Hudson v. United States,
522 U.S. 93, 98-99 (1997), abrogating United States v.
Halper, 490 U.S. 435 (1989).
makes clear that defendants' participation in a
conspiracy to defraud the government renders them jointly and
severally liable for the total amount of loss suffered by the
government and the total amount of civil penalties. See
Peterson v. Weinberger, 508 F.2d 45, 49 (5th Cir. 1975);
Mortgages, Inc. v. U.S. Dist. Court for Dist. of Nev.
(Las Vegas), 934 F.2d 209, 212 (9th Cir. 1991)
(“Where one or more persons have committed a fraud upon
the government in violation of the FCA, each is joint and
severally liable for the treble damages and statutory
penalty.”); United States v. Bd. of Educ. Of City
of Union City, 697 F.Supp. 167, 177 (D.N.J. 1988) (False
Claims Act case finding that conspiracy to violate the False
Claims Act results in joint and several liability “for
all of the damages and penalties against each of
[the defendants]”) (emphasis in original); Kelsoe
v. Fed. Crop Ins. Corp., 724 F.Supp. 448, 453 (E.D. Tex.
1988); United States v. Cabrera-Diaz, 106 F.Supp.2d
234, 242 (D.P.R. 2000) (“[W]hen two or more persons act
in concert in violation of the False Claims Act, they are
jointly and severally liable.”) (citations omitted).
Further, this includes the defendants who have not yet been
sentenced in the criminal case and the corporate defendants
who were not charged with a crime. See United States v.
Hangar One, Inc., 563 F.2d 1155, 1158 (5th Cir. 1977)
(citing United States v. Ridglea State Bank, 357
F.2d 495 (5th Cir. 1966)); United States v.
O'Connell, 890 F.2d 563, 568-69 (1st Cir. 1989);
Cabrera-Diaz, 106 F.Supp.2d at 242
(“Individuals and corporations can be sued together in
one action, with each being jointly and severally liable for
the total treble damages and civil penalties sought.”)
(citing United States v. Coop. Grain & Supply
Co., 476 F.2d 47 (8th Cir. 1973)). Therefore, whatever
the total amount of damages and penalties, defendants are
jointly and severally liable for that amount.
evidence of damages, while establishing various loss amounts
for each defendant, does not establish whether the losses are
independent of each other, i.e., whether the largest
loss amount of $14, 147, 295.28 includes the lower loss
amounts. Instead, Relator solely asks for a judgment of $14,
147, 295.28. Thus, given the absence of evidence
indicating that the defendants' loss amounts should be
added, the Court finds relator's evidence establishes
that the total amount of damage sustained by the Government
is $14, 147, 295.28.
discussed above, the statutory penalties under the False
Claims Act are not limited to each violation of the Act. But
relator has submitted no evidence or argument as to how
many acts or false claims or statements defendants made.
The Court will not presume or guess at the actual number of
the false claims or statements made in the absence of
evidence. Thus, as each defendant has been found to have