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United States v. Barnes

United States District Court, E.D. Louisiana

January 16, 2019

UNITED STATES OF AMERICA
v.
SHELTON BARNES, ET AL.

         SECTION “E” (2)

          ORDER AND REASONS

          SUSIE MORGAN, UNITED STATES DISTRICT JUDGE.

         Before the Court are three motions for stays of forfeiture, seizure, garnishment, and collection, filed by Defendants Shelton Barnes, Paula Jones, and Michael Jones (collectively, “Defendants”).[1] Although the relief sought is less than clear, the Court will consider the motions as requesting a stay of collection efforts on both the asset-forfeiture money judgments against the Defendants[2] and the restitution provisions of the judgments against the Defendants.[3] The Government opposes Defendants' motions.[4] Defendant Barnes filed a reply memorandum.[5] For the following reasons, Defendants' motions are DENIED.

         BACKGROUND

         On May 9, 2017, after sixteen days of trial testimony and more than two days of deliberation, the jury convicted Barnes and Paula Jones on all counts for which they were charged in the Second Superseding Indictment.[6] Michael Jones was found guilty as to Counts 1, 2, 18, and 22-27, and not guilty as to Counts 19, 20, and 21.[7]

         On September 25, 2018, the Court entered a Revised Preliminary Order of Forfeiture requiring Barnes to forfeit $371, 784 and Michael Jones to forfeit $19, 235.15.[8]In addition, Michael Jones and Paula Jones were required to forfeit $35, 000, for which they are jointly and severally liable.[9] The forfeiture order became final upon sentencing, and the forfeiture amounts were included in the amended judgments against Defendants, dated October 10, 2018, as personal money judgments.[10]

         Defendants were sentenced on September 25, 2018.[11] At sentencing, the Court ordered Defendants to pay restitution to their victim, Medicare. The Court imposed restitution in the following amounts: $10, 850, 229 from Barnes, $3, 106, 954 from Paula Jones, and $347, 525 from Michael Jones.[12] For Barnes and Michael Jones, these amounts were calculated by adding the total Part A payments Medicare paid Abide Home Care Services, Inc. (“Abide”) based on the relevant doctor's certification of patients during his participation in the conspiracy and the total Part B payments Medicare paid the relevant doctor during the same period.[13] For Paula Jones, who was a biller, the amount was calculated from Abide's total billings during her participation in the conspiracy, based on estimates of the proportion of Abide's billing for which she was responsible.[14]

         Defendants appealed their sentences to the Fifth Circuit.[15] Between November 27, 2018 and November 30, 2018, the Government filed ten applications for writs of garnishment as to Defendants to obtain funds to satisfy the orders of restitution.[16]Defendants filed the instant motions.[17] The Government opposes any stay, but does not oppose an order that the garnished funds be held on deposit in the registry of the Court until the resolution of Defendants' appeals.[18]

         LEGAL STANDARD

         To the extent Defendants move to stay the orders of forfeiture against them, Rule 32.2(d) of the Federal Rules of Criminal Procedure provides that “[i]f a defendant appeals from a conviction or an order of forfeiture, the court may stay the order of forfeiture on terms appropriate to ensure that the property remains available pending appellate review.”[19] In United States v. Ngari, the Fifth Circuit explained, “in determining whether to grant a stay of a forfeiture, courts have generally examined the following factors: (1) the likelihood of success on appeal; (2) whether the forfeited assets will depreciate over time; (3) the forfeited assets' intrinsic value to the defendant; and (4) the expense of maintaining the forfeited property.”[20]

         To the extent Defendants move to stay the orders of restitution against them, Rule 38(e)(1) provides, “[i]f the defendant appeals, the district court, or the court of appeals under Federal Rule of Appellate Procedure 8, may stay--on any terms considered appropriate--any sentence providing for restitution under 18 U.S.C. § 3556 or notice under 18 U.S.C. § 3555.”[21] The Fifth Circuit has not analyzed Rule 38(e)(1). Courts facing Rule 38(e)(1) motions have analyzed the four factors the Supreme Court laid out in Nken v. Holder[22] for motions for stays: “(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.”[23]

         ANALYSIS

         I. Forfeiture

         In their motions, Defendants do not address the first Ngari factor, likelihood of success on appeal. The Court notes it has denied Defendants' motions for release on bond pending appeal because Defendants failed to identify a substantial question of law or fact at issue in the case that, if decided in favor of Defendants, would be likely to result in reversal, an order for a new trial, or less or no imprisonment.[24] This factor weighs against a stay.

         The second factor, whether the forfeited assets will depreciate over time, “is relevant to cases in which the government intends to sell the forfeited property, and fears the property will depreciate in value while the appeal is pending.”[25] This factor is irrelevant in this case because the seizure is of cash.

         The third Ngari factor is the forfeited assets' intrinsic value to the defendant.[26] “In considering whether an asset has intrinsic value, courts are generally concerned with whether a defendant will receive adequate, alternative compensation for the forfeited property in the event he succeeds on appeal.”[27] Defendants' motions do not clearly address this factor. If Defendants are successful on appeal, the cash will be returned to them, constituting adequate compensation. As a result, the Court finds this factor also is irrelevant.

         The fourth factor, the expense of maintaining the forfeited property, is irrelevant because there will be no cost to maintain the forfeited property.

         The only relevant Ngari factor is the likelihood of success on appeal. Defendants have not shown they are likely to be successful on appeal. As a result, the Court denies Defendants' motions to stay the forfeiture orders against them.

         II. ...


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