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Qui Tam 2020 is the third annual conference of the Federal Bar Association's Qui Tam Section, for which TELG's Scott Oswald serves as chair. The two-day event will tackle some of the hottest topics in False Claims Act litigation, with panels featuring attorneys from both sides of the aisle, along with government prosecutors, agency representatives, and subject-matter experts.
Here Scott discusses asset forfeiture under the False Claims Act with J. Scott Gilbert of Watkins & Eager PLLC, who'll moderate a panel on the topic on Day One of the conference.
This video interview by TELG managing principal R. Scott Oswald was published by The Employment Law Group, P.C. on February 17, 2020.
“Qui Tam 2020” Panel Preview: Asset Forfeiture under the False Claims Act
» Click here for registration and full details on Qui Tam 2020
(Transcribed and edited lightly by The Employment Law Group)
R. Scott Oswald: [Addressing camera] We are here with Scott Gilbert. He is counsel at Watkins and Eager in Jackson, Miss., and he is moderating a panel at this year’s Qui Tam Conference on February 27-28, 2020.
[Turning to Gilbert] Scott, tell us a little bit about the panel and, if I’m in the audience, what I can expect to see on the panel.
J. Scott Gilbert: Great. Well, thank you: It’s a great honor to be included, Scott. I appreciate the opportunity.
Oswald: Aw, you’re welcome.
Gilbert: So our panel is going to address the interplay of asset forfeiture with qui tam actions — and there are two intersections that are of significant interest to practitioners both in the relators’ bar and the defense bar.
The first intersection is, if you are a relator or relators’ counsel, what does it mean for you and for your ability to recover if the government seizes and then ultimately perfects a forfeiture of the same money that the government is recovering as the proceeds of the fraud?
The second major intersection is for defense counsel and for defendants: What does it mean for you as a defendant and defense counsel if, somewhere in the pre-trial process, the money that’s being used to fund your defense is ultimately seized and restrained by the government in a pre-trial context?
And so, along those lines, we’re very fortunate to have three very experienced litigators in this area join us on the panel. The first is Silvija Strikis, who’s with Kellogg Hansen here in D.C. She is an experienced relators’ counsel. One of her more prominent cases that the people who are interested in the conference may know about is U.S. ex rel. Westmoreland v. Amgen. She was relator’s counsel in that case, where the government recovered about $700 million in fraud proceeds and penalties. She clerked for former Supreme Court Justice O’Connor and she will bring a phenomenal perspective, I think, from the relators’ perspective here.
Our defense counsel is also here from D.C.: Ralph Caccia. He’s with Wiley Rein. Ralph was a former AUSA in DC and he is one of the stalwarts of the white-collar defense bar. He does both civil and criminal defense work, focusing on False Claims cases, where he’s represented corporations and their executives for years. Ralph has frequently run into the circumstance where the government either threatens to or does, in fact, seize money from clients in the pretrial setting.
And then our government representative is the deputy civil chief in the Eastern District of California, Colleen Kennedy. Colleen’s been with DOJ for about ten years, where she handles affirmative civil enforcement — specifically False Claims Act and qui tam cases for the US Attorney’s Office. She has the unique experience of being one of the few federal prosecutors, I think, that have actually dealt with the logistics of facilitating relators receiving their payment from funds that have been forfeited by the government.
Oswald: How common is this? How often does this happen in the False Claims arena, where there may be this parallel civil asset forfeiture action?
Gilbert: Well, in a previous life as an Assistant U.S. attorney, and as the program manager for the forfeiture program here in Washington, we taught AUSAs [to] follow up in every fraud case with a civil forfeiture component. So it’s something they’re taught to do very early on in their evolution, when they join the department and begin to learn about how the Department of Justice pursues fraud cases. And so you see it more and more over the last several years, as it’s really become ingrained in the culture of U.S. Attorneys offices to seize the money early and to preserve it for restitution for both government and individual or private victims. So we’ve seen a major uptick over the last decade.
Now the other side of that coin is we’ve got, of course, the right to due process. I mean, this is America, right? And so defendants have a Sixth Amendment right to fund and pay for their defense. Two of the major cases that are at loggerheads that we’re going to deal with are [U.S. v. Monsanto], which is fairly well-established. And that says, you know: Listen, if the government can show probable cause that a certain asset is, in fact, sufficiently connected to a criminal offense, they can hold that — and the defendant can’t use that to pay for counsel.
Now we’ve got another case that’s much more recent, Luis v. U.S., that says, Well, that’s fine, but the government can’t hold and restrain assets that it can’t connect to the offense. And where this sort of comes up is this notion of substitute assets or unconnected assets to the offense under investigation.
And so we’ve got a rather robust playing field of issues to deal with here both for relators — who’d like to know, Can I still recover my share if the assets are forfeited to the government? — and for defense counsel and defendants, who are saying, Well, wait a minute, what is it that’s there for me to retain to fund my defense to demonstrate that I’m not guilty of what I’m accused with?
Oswald: So give me some of the advice that you’re giving to your clients right now, who might be facing a situation where they have assets that might be seized. What kind of advice you giving to your clients?
Gilbert: This really boils down to an accounting matter, because this is going to be about ledgers and spreadsheets and transactions. The forfeiture law, and the law that deals with what is it that the government actually can seize and restrain under a proceeds theory, or an involved-in property theory, money laundering theories of forfeiture, actually can be quite confusing because of the evolution of the case law. And so it’s not really so clear-cut as just to say, well, this money came from Pot A or this money came from Pot B. It’s a situation where you really have to bring more than just legal acumen to the table: It’s something that you’re going to have to involve CPAs, forensic accountants, and other sorts of professionals and experts to really drive your point home and fill out your defense.
Oswald: So Scott, tell us a little bit about you personally. When you’re not practicing law, not with your family, what’s your passion? What gets you up in the morning?
Gilbert: Well, you know, I’m from Mississippi — which some folks who are watching the video probably could glean from my lack of an accent, that I’m from the South. So I enjoy outdoors things: Hunting, fishing, sports. Things like that that I can do with the family and so I just — those types of things that you would guess that a guy from the South would be involved in.
Oswald: Wonderful. Scott, thank you.
Oswald: [Turning to camera] We look forward to seeing each of you on February 27-28,  here in Washington at the Qui Tam Conference. You can find us at fedbar.org.