Court Opinion

ID: 9367837
Source: CourtListenerOpinion
Date Created: 2023-02-01 22:01:37.775774+00
Date Added: 2024-06-11T17:16:03.646521
License: Public Domain

USCA11 Case: 22-12049    Document: 24-1      Date Filed: 02/01/2023   Page: 1 of 13

                                                    [DO NOT PUBLISH]
                                    In the
                 United States Court of Appeals
                         For the Eleventh Circuit

                           ____________________

                                 No. 22-12049
                           Non-Argument Calendar
                           ____________________

        UNITED STATES OF AMERICA,
                                                       Plaintiff-Appellee,
        versus
        JOHN PAUL GOSNEY, JR.,

                                                    Defendant-Appellant.

                           ____________________

                  Appeal from the United States District Court
                      for the Southern District of Florida
                    D.C. Docket No. 9:22-cr-80022-AMC-3
                           ____________________
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        2                      Opinion of the Court                 22-12049

        Before LUCK, LAGOA, and BRASHER, Circuit Judges.
        PER CURIAM:
             John Paul Gosney appeals the district court’s denial of his
        motion to vacate a restraining order on a bank account. We affirm.
                                          I.

               In February 2022, a grand jury charged several defendants,
        including Gosney, with multiple criminal offenses in connection
        with a scheme to submit false and fraudulent claims to Medicare
        for reimbursement. The indictment gave notice that the govern-
        ment would seek criminal forfeiture in connection with the
        charged offenses. Specifically, the indictment stated that, upon
        conviction, the defendants would forfeit property constituting or
        derived from, directly or indirectly, gross proceeds traceable to
        health care fraud, conspiracy to commit health care fraud and wire
        fraud, and kickback offenses, as well as any property “involved” in
        the money-laundering offenses and any property “traceable to”
        such property. The indictment listed certain property subject to
        forfeiture as a result of the charged offenses, which “include[d], but
        [was] not limited to,” funds from four listed bank accounts and
        three parcels of real property.
               After filing the indictment, the government applied ex parte
        for an order under 21 U.S.C. section 853(e)(1) and 18 U.S.C. section
        982(b)(1) restraining all funds on deposit in an account at Valley
        National Bank on which Gosney was a signatory. In support of its
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        22-12049               Opinion of the Court                         3

        application, the government submitted the declaration of an FBI
        agent setting forth the probable cause to restrain the funds in the
        account. The account wasn’t specifically listed in the criminal for-
        feiture section of the indictment but was mentioned elsewhere, in-
        cluding a criminal count alleging conduct related to concealment
        money laundering.
               The district court granted the government’s request. Based
        on the grand jury indictment, the district court concluded that
        there was “probable cause to find that [the account] [was] subject
        to forfeiture” upon Gosney’s conviction and thus that “the United
        States [was] entitled to a protective order pursuant to 21 U.S.C.
        [section] 853(e).” The district court entered a protective order re-
        straining the account to preserve its availability for forfeiture.
               Gosney moved to vacate the district court’s protective or-
        der, arguing that the restraint on the account violated his Sixth
        Amendment right to counsel of choice by denying him access to
        the funds he needed to hire the counsel he wanted. Specifically,
        Gosney asserted that the account wasn’t restrainable because it
        wasn’t listed in the criminal forfeiture section of the indictment, so
        neither the district court nor the grand jury had determined that
        the account was traceable to a charged offense. Gosney also re-
        quested that the district court grant him a pretrial hearing on the
        traceability of the account to the crimes alleged in the indictment.
        In opposing the motion, the government argued that the indict-
        ment and agent declaration established the account as tainted prop-
        erty subject to criminal forfeiture and that Gosney’s challenge was
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        4                       Opinion of the Court                 22-12049

        barred under the Supreme Court’s decision in United States v. Ka-
        ley, 571 U.S. 320 (2014), as an impermissible attack on the grand
        jury’s probable cause determination underlying the criminal
        charges.
               Following a hearing, the district court denied Gosney’s re-
        quest to vacate outright the restraining order. But the district court
        granted Gosney leave to make an ex parte showing of financial
        need to determine whether he was entitled to a hearing to chal-
        lenge the restraint. Based on our decision in United States v. Kaley,
        579 F.3d 1246, 1252 (11th Cir. 2009) (“Kaley I”), the district court
        found that Gosney wasn’t entitled to a pretrial hearing unless he
        showed that the asset restraint effectively prevented him from hir-
        ing his counsel of choice. It permitted Gosney to attempt to make
        such a preliminary showing by submitting documentary evidence
        of financial hardship.
                Gosney filed financial information ex parte as ordered. But
        he “indicated that he would not testify about his finances at a future
        adversarial hearing.” The district court ordered Gosney to file a
        notice indicating whether he intended to meet his burden to show
        financial need by a preponderance of the evidence at an adversarial
        pretrial hearing. In response, Gosney asserted that only he had suf-
        ficient personal knowledge about his finances and that he wouldn’t
        testify in open court without a grant of use immunity.
               The district court denied Gosney’s motion to vacate the re-
        straining order, finding that a pretrial hearing on traceability of the
        restrained funds to the charged offenses was “unwarranted.” The
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        22-12049                 Opinion of the Court                           5

        district court assumed (without deciding) that Gosney had estab-
        lished financial hardship. But it determined that Gosney still wasn’t
        entitled to a hearing under the four-part balancing test established
        in Barker, which we applied to criminal asset restraints in United
        States v. Bissell, 866 F.2d 1343, 1352 (11th Cir. 1989). This test in-
        cludes four factors: “(1) the length of the delay before the defend-
        ants received their post-restraint hearing; (2) the reason for the de-
        lay; (3) the defendants’ assertion of the right to such a hearing pre-
        trial; and (4) the prejudice the defendants suffered due to the delay
        weighed against the strength of the United States’[] interest in the
        subject property.” Kaley I, 579 F.3d at 1254.
                As to the first Barker factor, the district court noted that,
        “[i]n the context of asset restraints, the relevant length of delay is
        the amount of time between when the restraint is imposed and
        when the restraint would be reconsidered and resolved,” which the
        district court calculated to be “between ten and eleven months.”
        The district court found that “[a] delay of that length, although not
        insignificant, is not so substantial as to clearly favor a pre-trial hear-
        ing” and thus determined that this factor was “either neutral or
        marginally weigh[ed] in Gosney’s favor.”
                As to the second factor, the district court observed that the
        case involved twenty-two charges against ten defendants “in con-
        nection with a multimillion-dollar health care fraud conspiracy, in-
        cluding charges of money laundering that implicate numerous en-
        tities and bank accounts.” The district court noted that the discov-
        ery was “massive,” as it involved “hundreds of thousands of
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        6                       Opinion of the Court                 22-12049

        documents and necessitat[ed] a detailed and developed discovery
        protocol for use by a filter team.” The district court found that
        because of “the complexities of this case, the extremely volumi-
        nous discovery, and the expressed need for adequate preparation
        on both sides,” the reason-for-delay factor was neutral.
               As to the third factor, the district court found that it weighed
        in Gosney’s favor because he timely moved to vacate the restrain-
        ing order “one month after [it] was entered.”
               As to the fourth factor, the district court conducted the
        “more searching exposition and calculus” we required in Kaley I.
        579 F.3d at 1258. In doing so, the district court explained that the
        Supreme Court, in Kaley, distinguished between “(1) the grand
        jury’s determination of probable cause to believe a defendant com-
        mitted a crime and (2) the grand jury’s determination that the as-
        sets subject to forfeiture are traceable to the charged crime” and
        “made clear that only the latter determination . . . may be subject
        to second-guessing.” “Conversely,” continued the district court,
        quoting Kaley, “the former determination by the grand jury—that
        probable cause exists to believe a defendant perpetrated the of-
        fenses alleged based on the factual allegations supporting the grand
        jury’s probable cause determination—is ‘conclusive’ at this stage,
        i.e., not subject to ‘any review, oversight, or second-guessing’
        pending resolution of the case.” After a thorough analysis, the dis-
        trict court found that “Gosney’s arguments on the merits all re-
        duce[d] to a claim that neither he nor his co-defendants committed
        the charged crimes or obtained any significant amount of money
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        22-12049               Opinion of the Court                         7

        from improper Medicare claims.” But, because that determination
        “falls within the sole province of the grand jury under the Supreme
        Court’s binding decision in Kaley,” the district court concluded that
        Gosney had failed to show prejudice. Meanwhile, the government
        had a “substantial interest in continuing to restrain [the account]
        without any pre-trial hearing.” Accordingly, the district court de-
        termined that this factor weighed “decidedly in favor of the
        [g]overnment.”
              Gosney timely appealed.
                                          II.

               We review a district court’s refusal to vacate an injunction
        for abuse of discretion. CBS Broad. Inc. v. EchoStar Commc’ns
        Corp., 532 F.3d 1294, 1299 (11th Cir. 2008). The legal conclusions
        underlying the district court’s decision are reviewed de novo, and
        factual findings are reviewed for clear error. Dillard v. Baldwin
        Cnty. Comm’rs, 376 F.3d 1260, 1265 (11th Cir. 2004). We review
        de novo issues of constitutional law and statutory interpretation.
        United States v. Castro, 455 F.3d 1249, 1251 (11th Cir. 2006).
                                          III.

                Gosney argues that the district court erred in two ways.
        First, he claims that the indictment didn’t permit the district court
        to enjoin transfers from his account. Second, he argues that he was
        entitled to a pretrial hearing on whether the restraint was constitu-
        tional. We address each argument in turn.
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        8                       Opinion of the Court                 22-12049

                                           A.

                Under 21 U.S.C. section 853(e), a district court may impose
        pretrial restraints on property that would be subject to criminal for-
        feiture in the event of a defendant’s conviction. Specifically, a dis-
        trict court “may enter a restraining order or injunction” to preserve
        such property for forfeiture “upon the filing of an indictment or
        information charging a violation . . . for which criminal forfeiture
        may be ordered under this section and alleging that the property
        with respect to which the order is sought would, in the event of
        conviction, be subject to forfeiture under this section.” 21 U.S.C. §
        853(e)(1)(A). The Supreme Court has held that a pretrial restraint
        of assets is constitutionally permissible when it is “based on a find-
        ing of probable cause to believe that the assets are forfeitable.”
        United States v. Monsanto, 491 U.S. 600, 615 (1989).
                Gosney argues that the district court wasn’t authorized to
        issue an order restraining his account because the account wasn’t
        specifically listed in the non-exhaustive forfeiture allegations sec-
        tion of his indictment. To support this argument, Gosney cites
        United States v. Kaley, 677 F.3d 1316, 1327 (11th Cir. 2012) (“Kaley
        II”), for the proposition that such an omission from this specific part
        of the indictment is “fatal to the validity of the district court’s or-
        der.” But Kaley II says no such thing. True, we noted that the
        prosecution can’t restrain assets “[w]ithout the grand jury’s proba-
        ble cause determination and the court’s approval.” Kaley II, 677
        F.3d at 1327. But we made this statement in the context of “em-
        phasizing that the prosecution cannot unilaterally restrain a
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        22-12049               Opinion of the Court                        9

        defendant’s assets between the time of indictment and trial.” Id.
        We never specified that a grand jury’s probable cause determina-
        tion must appear in a particular part of the indictment, nor did we
        preclude district courts from making their own post-indictment
        probable cause determinations.
                The indictment’s allegations, in conjunction with the FBI
        agent’s declaration, established probable cause that the funds in the
        account would be forfeitable upon Gosney’s conviction. Specifi-
        cally, the FBI agent declared that investigators had identified more
        than twenty million dollars in proceeds from Medicare contractors
        tied to reimbursements for false and fraudulent claims submitted
        to Medicare by the clinical laboratory used by Gosney and his co-
        defendants. More than thirteen million dollars of these funds were
        transferred to an account at JPMorgan. Between October 2020 and
        February 2021, $1,954,100.00 was transferred in a series of forty-
        one wire transfers from the JPMorgan account to a Wells Fargo
        account on which Gosney was the sole signatory. In July 2021, ap-
        proximately two million dollars was transferred from the Wells
        Fargo account into the account at issue in this case. The indictment
        identified Gosney as the owner of this account and charged him for
        the two-million-dollar transfer, which the indictment described as
        “proceeds of specified unlawful activity”—namely, “conspiracy to
        commit health care fraud and wire fraud,” “health care fraud,” and
        “receipt of kickbacks in connection with a [f]ederal health care pro-
        gram.” In light of what was presented to the district court, com-
        bined with the indictment’s clear notice that any property involved
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        10                     Opinion of the Court                 22-12049

        in or traceable to the charged offenses would be subject to criminal
        forfeiture upon a defendant’s conviction, the district court’s re-
        straint of the account was proper under section 853(e).
                                          B.

               On the issue of whether Gosney is entitled to a post-indict-
        ment, pretrial hearing on the legality of the restraint on his prop-
        erty, we’re bound by our decision in Bissell. In Bissell, we clearly
        held that a defendant whose assets are restrained pursuant to a
        criminal forfeiture charge in an indictment, rendering him unable
        to afford counsel of choice, is entitled to a pretrial hearing only if
        the balancing test in Barker is satisfied. 866 F.2d at 1353. Thus, we
        must decide whether the district court correctly interpreted and ap-
        plied the four factors of the Barker balancing test: “(1) the length
        of the delay before the defendants received their post-restraint
        hearing; (2) the reason for the delay; (3) the defendants’ assertion
        of the right to such a hearing pretrial; and (4) the prejudice the de-
        fendants suffered due to the delay weighed against the strength of
        the United States’[] interest in the subject property.” Kaley I, 579
        F.3d at 1254.
                Gosney provides no legal argument as to the first three fac-
        tors, which the district court found weighed neutrally or margin-
        ally in Gosney’s favor. Gosney devotes the lion’s share of his brief
        to challenging the district court’s finding that the fourth factor
        weighed “decidedly in favor of the [g]overnment.” So the question
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        22-12049               Opinion of the Court                        11

        before us is whether the district court erred in finding that Gosney
        wasn’t unduly prejudiced by the restraint on his assets.
               When a defendant’s assets are forfeitable as a result of crim-
        inal conduct, a defendant has no Sixth Amendment right to use
        those tainted funds to hire an attorney. See Caplin & Drysdale,
        Chartered v. United States, 491 U.S. 617, 632 (1989). In Kaley, the
        Supreme Court concluded that an asset restraint that deprives a de-
        fendant of his Sixth Amendment right to retain counsel of his
        choice is “erroneous only when unsupported by a finding of prob-
        able cause.” 571 U.S. at 337 (emphasis omitted); see also Monsanto,
        491 U.S. at 615 (holding that no constitutional violation occurs
        where assets are restrained pretrial based on a finding of probable
        cause that the assets are forfeitable).
               The Kaley Court recognized that a pretrial asset restraint
        must be supported by two probable-cause determinations: “There
        must be probable cause to think (1) that the defendant has commit-
        ted an offense permitting forfeiture, and (2) that the property at is-
        sue has the requisite connection to that crime.” 571 U.S. at 323–24.
        Kaley held that a defendant seeking to lift a pretrial asset restraint
        has no right to a hearing to contest the first determination—the
        grand jury’s finding of probable cause to believe that the defendant
        committed the crimes charged. Id. at 322. The Court emphasized
        the grand jury’s “singular role” in finding “probable cause neces-
        sary to initiate a prosecution for a serious crime” and explained
        that, because “a fundamental and historic commitment of our
        criminal justice system is to entrust those probable cause findings
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        12                      Opinion of the Court                 22-12049

        to grand juries,” a defendant isn’t entitled to a “judicial re-determi-
        nation of the conclusion the grand jury already reached.” Id. at 328.
        Thus, only the second determination may be challenged before
        trial. See id. at 331 n.9, 333. This is because “the tracing of assets
        is a technical matter,” whereas the grand jury’s determination of
        probable cause to support criminal charges is part of its “core com-
        petence and traditional function” and thus “conclusive[].” Id. at
        328, 331 & n.9 (quotation omitted). This distinction is consistent
        with Kaley II, where we held that “a defendant who is entitled to a
        pretrial due process hearing with respect to restrained assets may
        challenge the nexus between those assets and the charged crime,
        but not the sufficiency of the evidence supporting the underlying
        charge.” 677 F.3d at 1327; see also Kaley, 571 U.S. at 324 (noting
        that lower courts allow a defendant to challenge “whether proba-
        ble cause exists to believe that the assets in dispute are traceable or
        otherwise sufficiently related to the crime charged in the indict-
        ment”).
               Although couched as a traceability challenge, we agree with
        the district court that Gosney’s argument constitutes an impermis-
        sible attack on the grand jury’s determination of probable cause
        that he committed an offense permitting forfeiture. Gosney pays
        lip service to Kaley II by stating that he seeks to challenge the
        “nexus” between the account and the charged crimes. But he
        doesn’t argue that the account’s funds are from sources unrelated
        to his alleged conduct. Rather, he cites testimony from his co-de-
        fendants’ preliminary hearing to show the absence of fraud and
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        22-12049               Opinion of the Court                       13

        argues that the scheme didn’t constitute fraud because the billings
        were for medically necessary services authorized by physicians. Es-
        sentially, he insists that “the revenues . . . do not constitute pro-
        ceeds of a fraud” because the conduct with which he is charged
        doesn’t actually constitute fraud. This argument is squarely at odds
        with the factual allegations in the indictment and thus is foreclosed
        by Kaley. See 571 U.S. at 341.
               As a fallback, Gosney urges us to overturn Bissell and “con-
        clude that, in assessing the need for a hearing, Gosney may chal-
        lenge not only the nexus prong, but the guilt prong as well.” Even
        if we were at liberty to overturn our binding precedent, as Gosney
        suggests, it’s not Bissell that compels our conclusion. Rather, it’s
        the Supreme Court’s Kaley opinion, which mandates that Gosney
        has “no right to relitigate” the “grand jury’s prior determination of
        probable cause to believe [he] committed the crimes charged.” 571
        U.S. at 322. And, “under our system of vertical precedent, we are
        bound to apply [Kaley] until it is overruled, receded from, or in
        some other way altered by the Supreme Court.” United States v.
        Henco Holding Corp., 985 F.3d 1290, 1302 (11th Cir. 2021).
              AFFIRMED.