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Unfreezing Financial Assets to Allow Criminal Defendants to Hire an Attorney

Once the government establishes that there is probable cause that a defendant has committed health care fraud, the government may move for an injunction to freeze the defendant’s assets. [1] The government shows probable cause through a declaration and an indictment. The government may freeze assets which the defendant obtained as a result of health care fraud. If the defendant is alienating or disposing property or intends to alienate or dispose property, the government will move to freeze all of the defendant’s assets. The “equivalent value” provision allows the government to freeze all of the defendant’s assets when they cannot locate all of the assets obtained through health care fraud.

This happened to Sila Luis. [2] Ms. Luis was alleged to have obtained $45 million dollars through Medicare fraud. Her total assets did not come close to $45 million dollars. The government froze all of Ms. Luis’ assets. Since the government froze all of her assets, Ms. Luis was entitled to a hearing. At the hearing, the Court stated that they had discretion to release assets to pay attorneys’ fees. However, Ms. Luis needed to prove that these assets were her only means of securing counsel for a civil matter. Ms. Luis’ case was criminal. Thus, this exception did not apply. The Court reasoned that Ms. Luis could hire a public defender.

On August 26, 2015, the America Bar Association (ABA) filed an amicus brief in support of Ms. Luis.[3] The ABA took the position that freezing all of a defendant’s assets could prevent criminal defendants from hiring the counsel of their choice. This would “threaten the whole adversarial system.” [4]

If the government freezes your financial assets due to allegations of health care fraud, act quickly. Your bank accounts may be frozen. The government may seize your home. Your case will have criminal, civil, and administrative components. You will need to hire an attorney who understands all of these components. The health care law attorneys at Chapman Law Group have the knowledge to provide you with an aggressive defense to all three components of your case.

When a government indictment and declaration establish probable cause to believe that Federal health care fraud was committed, the government may move for injunctive relief to freeze the suspect offender’s financial assets which were illegally obtained as a result of the offenses. [1] The government will move to freeze all of the suspect offender’s financial assets where the suspect offender is alienating or disposing of property, or intends to alienate or dispose of property that was obtained as a result of the Federal health care fraud. The government may also freeze all of the suspect’s assets even if some of the assets are not traceable to the crime where the government cannot locate all of the assets that were obtained as a result of the crime. This is known as the “equivalent value” provision.

Such was the case with Florida resident Sila Luis. [2] All of her financial assets combined did not approach the $45 million in alleged fraudulently obtained Medicare proceeds she had received; so the government froze all of Ms. Luis’ assets to in an attempt to recoup alleged losses. Luis was entitled to hearing to challenge the basis of the seizure because all of her assets were frozen. The Court’s analysis was not favorable to Luis. The Court stated that it has discretion to release assets for payment of attorney’s fees if the assets are the only means of securing counsel in a civil matter, however, this exception did not apply to the criminal matter. The Court concluded that the defendant could be appointed counsel in the criminal matter if they could no longer afford representation.

On August 26, 2015, the American Bar Association filed an amicus brief in the Supreme Court in support of Luis. [3] The ABA has apparently taken the position that freezing “untainted” financial assets could prevent criminal defendants from hiring the counsel they want and “thus threaten the whole adversarial system.” [4]

If you are the subject of a government seizure of your financial assets arising out of allegations of health care fraud, your bank accounts have been frozen, and your home is under threat of government seizure, you must act quickly to obtain attorneys experienced in the defense of health care professionals. Just a criminal attorney will not do. Your case will likely have criminal, civil, and administrative components. The health care law attorneys at Chapman Law Group are uniquely suited to provide you with a comprehensive aggressive defense in all three components of your case.


[1] 18 U.S.C. § 1345
[2] 966 F. Supp. 2d 1321
[3] http://www.law360.com/articles/695399/freezing-untainted-assets-stifles-defense-high-court-told
[4] Id.