No Receiver For You! Eleventh Circuit Holds That Government Has No Right To Receiver To Collect Forfeited Assets And Fines
In an extensive Medicaid fraud case, United States v. Bradley, 2011 WL 2565480 (11th Cir., June 29, 2011), the defendants were convicted and subsequently consented to forfeiture orders which entitled the government to seize the defendants’ company and to take a $40 million judgment against them. The day before sentencing, anticipating that the court would impose fines and special assessments as well, the government moved for the appointment of a receiver to marshal and liquidate the defendants’ assets. Defendants objected on the elegant and simple ground that there is no authority under federal law authorizing the appointment of a receiver for such purposes. The sentencing court appointed one anyway, citing the general authority of the Federal Debt Collection Procedures Act and the good old All Writs Act.
Not so fast, according to the Eleventh Circuit. The appointment of a receiver is an extraordinary equitable remedy and the appointment here was inappropriate, since the FDCPA provides the government with “all the tools necessary to obtain payment of the fines, special assessments, and [judgment].” Given the panoply of devices available to the government under the statute -- writs of attachment and garnishment, post-judgment discovery -- the appointment was an abuse of discretion.
(Alain Leibman, Esq., the author of this entry and a co-author of this blog, is a partner with Fox Rothschild LLP, based in our Princeton, NJ office. A former decorated federal prosecutor, he practices both criminal defense and commercial litigation in federal and state courts)
