United States of America et al v. The Gardens Pharmacy, LLC et al
Filing
105
ORDER denying Relator Estate of Robyn Turner's First Motion 79 to Recognize Relator's Share. Signed by District Judge Halil S. Ozerden on 06/09/2022. (lg)
Case 1:18-cv-00338-HSO-RHWR Document 105 Filed 06/09/22 Page 1 of 11
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
UNITED STATES OF AMERICA,
ex rel. ESTATE OF ROBYN TURNER
PLAINTIFFS
v.
Civil No. 1:18cv338-HSO-RHWR
THE GARDENS PHARMACY, LLC,
DR. BRIAN TSANG, and ALBERT
TSANG
DEFENDANTS
MEMORANDUM OPINION AND ORDER DENYING RELATOR ESTATE OF
ROBYN TURNER’S FIRST MOTION [79] TO RECOGNIZE RELATOR’S
SHARE
BEFORE THE COURT is Relator Estate of Robyn Turner’s First Motion [79]
to Recognize Relator’s Share. Based upon its review of the record and relevant legal
authority, the Court is of the opinion that the Motion [79] should be denied.
I. BACKGROUND
A.
Relator’s factual allegations
This is a suit brought under the False Claims Act, 31 U.S.C. § 3729 (“FCA”).
Relator Estate of Robyn Turner 1 (“Relator” or “Turner”) alleges that Defendant The
Gardens Pharmacy, LLC (“The Gardens”) submitted or caused to be submitted false
claims for payment to TRICARE and Medicare as a result of illegal kickbacks to
prescribing doctors in violation of 31 U.S.C. § 3729. Id. Turner began working in
On October 22, 2019, Relator Robyn Turner passed away. Mot. [11]. The Estate of Robyn Turner
was opened on December 19, 2019, and the Court granted its request to be substituted as Relator in
this action on March 25, 2020. Order [13].
1
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February 2013 as a pharmacist on an as-needed basis at The Gardens. Compl. [1] at
2. After six months, Turner became the pharmacy manager and worked in that role
until February 2014. Id.
According to Relator, The Gardens violated the Anti-Kickback Statute, 42
U.S.C. § 1320a–7b(b)(2)(A) (“AKS”), by using sales teams to market various
expensive compound drug formulations to doctors. Id. at 6. These sales teams were
allegedly paid a commission for every physician referral they made to the
pharmacy. Id. Referrals were tracked by the pharmacy and the sales agents, so that
the sales agents could follow up with physicians and verify the accuracy of their
commission checks. Id. at 7. Relator claims that Clark Levi, owner of The Gardens,
openly discussed commissions with sales agents, and was in charge of making
commission payments to sales agents. Id. These commission payments included
payments for referrals for prescriptions covered by TRICARE and Medicare,
programs funded by the federal government and covered by the AKS. Id.
Relator asserts that one sales agent in particular, Defendant Albert Tsang,
was solely responsible for marketing pharmaceuticals to his father, Defendant Dr.
Brian Tsang. Id. According to the Complaint, Clark Levi, who spoke openly about
commissions paid to the other sales agents, was “particularly secretive about his
dealings with Albert Tsang.” Id. at 8. Relator alleges that The Gardens submitted
claims to TRICARE and Medicare resulting from referrals that Albert Tsang
obtained from Dr. Tsang. Id.
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Relator contends that the conduct of paying commissions to sales agents
violated the FCA and the AKS, and that the familial relationship between Dr.
Tsang and Albert Tsang caused The Gardens to additionally violate the Stark Law,
42 U.S.C. § 1395nn. Id. The Government has elected to decline intervention in this
case. Not. [8] at 1.
B.
Relator’s Motion [79]
Relator has filed the present Motion [79] to Recognize Relator’s Share,
arguing that proceeds recovered by the Government in several separate criminal
proceedings, including criminal forfeiture proceedings, against parties associated
with The Gardens but not named in this lawsuit, should be recognized as part of the
proceeds from which Relator may recover its percentage share of any ultimate
recovery in this qui tam suit. Mem. [80] at 6. Relator identifies seven specific
recoveries the Government obtained from parties allegedly associated with The
Gardens:
1.
$895,740.36 from accounts associated with The Gardens
pursuant to a Warrant to Seize Property Subject to Forfeiture issued
May 29, 2019.
2.
$1,628,409 in criminal restitution ordered against Thomas
Edward Sturdavant, M.D. pursuant to his guilty plea in United
States v. Thomas Edward Sturdavant, M.D., USDC SD MS, 2:19-cr28-KS-MTP.
3.
$160,000 in a money judgment forfeited by Thomas
Sturdavant, M.D. in association with his guilty plea for soliciting and
accepting kickbacks in the form of commission payments from The
Gardens.
4.
$4,800,526.47 in criminal restitution ordered against
Shahjahan Sultan, M.D. pursuant to his guilty plea in United States
v. Shahjahan Sultan, M.D., USDC SD MS, 2:19-cr28-KS-MTP.
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5.
$2,324,945.54 forfeited by Shahjahan Sultan, M.D. in
conjunction with his guilty plea for receiving kickbacks from The
Gardens.
6.
$16,333,583 in criminal restitution ordered against Jeffrey
Wayne Rollins pursuant to his guilty plea in United States v. Jeffrey
Wayne Rollins, USDC SD MS, 2:20-cr-39- KS-MTP. Of this amount,
$8,711,244.27 is associated with reimbursement to Medicare and
$2,341,146.90 is associated with reimbursement to TRICARE.
7.
$16,333,583 in criminal restitution ordered against Dempsey
“Bryan” Levi pursuant to his guilty plea in United States v. Dempsey
“Bryan” Levi, USDC SD MS, 2:20-cr-38-MTP [sic].
Mot. [79] at 1-2.
Relator takes the position that it is entitled to a share of these proceeds,
because the FCA permits qui tam plaintiffs to recover a share where the
Government pursues an “alternate remedy,” instead of joining the qui tam
plaintiff’s civil suit. Mem. [80] at 5 (citing 31 U.S.C.A. § 3730(c)(5) and 31 U.S.C.A. §
3730(d)).
The Government opposes the Motion, arguing that Relator is not entitled to
proceeds from these criminal forfeiture and restitution awards, because they do not
constitute alternate remedies under the FCA. Mem. [86] at 1. The Government
further contends that even if Relator could somehow claim an interest in criminal
forfeiture and restitution awards, the specific criminal actions from which Relator
seeks a share involved different claims against entirely different defendants. Id.
II. DISCUSSION
A.
Applicable legal standards
The False Claims Act, 31 U.S.C. §§ 3729 – 3733 (“FCA”), is violated if any
person presents to the Government false or fraudulent claims for payment or
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approval. 31 U.S.C. § 3729. The FCA “prohibits false or fraudulent claims for
payment to the United States, 31 U.S.C. § 3729(a), and authorizes civil actions to
remedy such fraud to be brought by the Attorney General, § 3730(a), or by private
individuals in the Government’s name, § 3730(b)(1).” Rockwell Int’l Corp. v. United
States, 549 U.S. 457, 463 (2007).
“Notwithstanding subsection (b) [which provides that a person may bring a
civil action for a violation of section 3729 both for the person and the Government],
the Government may elect to pursue its claim through any alternate remedy
available to the Government, including any administrative proceeding to determine
a civil money penalty.” United States ex rel. Babalola v. Sharma, 746 F.3d 157, 160
(5th Cir. 2014) (citing § 3730(c)(5)). If the Government pursues an alternate remedy,
“the person initiating the action shall have the same rights in such proceeding as
such person would have had if the action had continued under” the qui tam section
of the False Claims Act. Id. In this case, Relator maintains the criminal forfeiture
proceedings it has identified constituted alternate remedies pursued by the
Government. Mem. [80] at 5.
B.
Analysis
Relator argues that the FCA’s “alternate remedy” provision permits the
Court to recognize a share of the Government’s recovery obtained from defendants
in the different criminal cases because they were part of the general scheme Turner
alleged in the Complaint. Mem. [80] at 5. To support this position, Relator relies
heavily upon an unpublished 2005 decision from the United States District Court
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for the Southern District of Indiana, United States v. Bisig, Crim No. 02–112, 2005
WL 3532554 (S.D. Ind. Dec. 21, 2005). In Bisig, the court permitted the relator to
claim a share of the recovery in a criminal forfeiture action involving the owners of
the defendant corporation. Id. at *6. A number of courts have expressed reluctance
to follow Bisig or otherwise weigh in on the issue of whether criminal forfeiture or
restitution recoveries can qualify as alternate remedies under the FCA. See, e.g.,
United States v. Kurlander, 24 F. Supp. 3d 417, 423 (D.N.J. 2014), as amended
(June 11, 2014); United States v. Couch, 906 F.3d 1223, 1228 (11th Cir. 2018).
However, the Court finds that it need not resolve this question because Relator has
not shown that the scheme alleged in this case against The Gardens and the Tsangs
is the same as the ones pursued by the Government in the other criminal
proceedings at issue.
Even if criminal forfeiture proceedings could be considered alternate
remedies under the FCA, Relator would not be entitled to a share of the proceeds
here because the conduct alleged in the Complaint is not the same conduct that
resulted in the restitution and forfeiture awards in the separate criminal cases
Relator cites in its Motion [79]. Relator argues that The Gardens is now defunct,
such that Relator should be allowed to obtain a share of the Government’s
recoveries in the other actions against “accounts associated with The Gardens,”
Mem. [80] at 2, as well as against individuals who participated in the scheme
Relator has alleged, Rebut. [87] at 2. Relator maintains that the claims against The
Gardens share the same factual basis as the referenced criminal proceedings,
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thereby entitling Relator to a share of proceeds from the Government’s actions
against those defendants. Mot. [79] at 1-2.
In order for the Court to accept this argument, the criminal forfeiture and
restitution payments over which Relator asserts an interest must involve similar
conduct to that alleged in the Complaint. See, e.g., United States ex rel. Bledsoe v.
Cmty. Health Sys., Inc., 501 F.3d 493, 500 (6th Cir. 2007). In Bledsoe, the relator
alleged that the defendant healthcare system engaged in several fraudulent
practices, including coding contract services at a higher billing rate, double-billing,
and billing for medical care that was never provided. Id. at 498. The defendant
entered into a settlement agreement with the Government arising out of its practice
of miscoding inpatient admissions and diagnoses. Id. Government agents
interviewed the relator during the criminal investigation and determined that the
information provided by the relator was unrelated to the defendant’s conduct that
ultimately resulted in criminal charges. Id. at 498-99.
The relator in that case claimed that he was entitled to a share of the
proceeds obtained from the defendant’s settlement agreement with the Government.
Id. at 521. The Sixth Circuit concluded that because the relator did not allege the
same conduct as that which the Government had alleged when it obtained the
settlement, the relator was not entitled to a share of the Government’s proceeds. Id.
at 522. As the court put it, “a relator is not entitled to settlement proceeds that
potentially overlap” with his claims. Id. (emphasis added). “Qui tam proceeds are
available not to persons who inform the government of wrongdoing, but are only
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available when the government proceeds ‘with an action’” involving that same
wrongdoing. Id. (citing 31 U.S.C. § 3730(d)(1)).
In the present case, the criminal proceedings over which Relator asserts an
interest cover distinct parties and distinct conduct from that alleged in the
Complaint. The Complaint [1] focuses on The Gardens’s sales teams and their
receipt of commissions for marketing higher-reimbursement compound drugs to
prescribers. See Compl. [1] at 6. Relator alleges that the specific sales team named
in the Complaint, “Garden’s Coasteam, LLC,” operated from April 2013 through
December 2014, id. at 7, and focuses on the relationship between Dr. Brian Tsang
and Albert Tsang and how their actions allegedly violated the Stark Law, id. at 8.
Conversely, the Government’s criminal investigations and subsequent
recoveries cited by Relator in its Motion focused on schemes to substitute more
profitable chemical compounds when they were not medically necessary in order to
bill more expensive prescriptions to TRICARE and Medicare Part D. Mem. [86] at 67. While Relator’s Complaint [1] focused on the Tsangs, the Government’s criminal
cases involved allegations against Alvix Labs, Bryan Levi, Jeffrey Rollins, Dr.
Sultan, and Dr. Sturdavant. Ex. [85-1] at 1-2. Moreover, the relevant dates of the
activity alleged by Relator do not overlap with the dates of the conduct involved in
the Government’s criminal investigations. Robyn Turner was employed at The
Gardens from February 2013 until February 2014, Compl. [1] at 2, while the
Government’s investigations and subsequent prosecutions focused on “allegations of
healthcare fraud beginning in mid-2014 through 2015,” Ex. [85-1] at 1-2. As the
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Government states in its brief, “Relator’s employment with Gardens Pharmacy predates the wrongful conduct that is the subject of the guilty pleas,” Mem. [86] at 5,
and therefore she could not have assisted in those investigations. The Government
further maintains that its criminal investigations were opened independently from
Relator’s qui tam suit. Id. at 3.
Relator also seeks a share of the forfeitures “from accounts associated with
The Gardens,” presumably referencing the forfeiture the Government obtained from
Alvix Laboratory accounts. Mem. [80] at 2. However, the Federal Bureau of
Investigation (“FBI”) concluded that “Relator did not provide the FBI with any
information on Alvix Labs.” Id. In addition, Relator’s allegations of violations of the
Stark Law, which were a minor aspect of The Gardens’s TRICARE and Medicare
Part D claims, did not represent a significant portion of the assets seized from The
Gardens before it dissolved, because prescriptions dispensed by Dr. Tsang totaled
less than $4,000.00, where the total criminal forfeiture proceeds were $924,114.40.
Ex. [85-1] at 3. “A review of TRICARE claims data from January 2014 to May 2019
indicates that Dr. Tsang wrote 4 prescriptions for 2 patients . . . for a paid amount
of $3,494.71. A review of Medicare Part D claims data from January 2014 to May
2019 indicates that Dr. Tsang wrote 18 prescriptions for 6 patients . . . for a paid
amount of $573.66.” Id. Even if Alvix Labs and The Gardens were somehow related,
these comparatively very minor amounts related to Dr. Tsang are insufficient, in
the Court’s view, to justify awarding Relator a share of these proceeds.
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Furthermore, Ms. Turner could not have assisted the FBI in its investigation
or acted as a whistleblower in those cases, because the FBI had not “identified Ms.
Turner as an individual with useful information.” Id. at 2. The FBI interviewed Ms.
Turner in January 2019 and determined that she possessed a “limited scope of
knowledge” of the relevant criminal conduct, as she was primarily involved in the
retail aspect of The Gardens, rather than in an area where she could have gained
knowledge about the relevant chemical compound scheme. Id. The FBI noted that
Turner did not provide any information about Dr. Sultan or Dr. Sturdavant and did
not even recognize pictures of them. Id.
Relator’s assertion of a stake in the Government’s criminal recoveries is
similar to that asserted by the relator in U.S. ex rel. Smart v. CHRISTUS Health,
No. 2:05-CV-287, 2013 WL 2289883, at *3 (S.D. Tex. May 22, 2013), aff’d sub nom.
U.S. ex rel. Smart v. Health, 563 F. App’x 314 (5th Cir. 2014). In that case, the
relator sought a share of the Government’s recovery from a settlement agreement
arising out of the defendant’s fraudulent patient admissions process and billing
practices, but the relator’s complaint involved allegations against three of the
defendant’s hospitals that the defendant had rented office space to doctors at belowmarket rent in exchange for patient referrals. Id. at *3. The relator did not mention
billing practices in his complaint, and he did not mention the specific hospitals
where the defendant engaged in the conduct relevant to the Government’s
settlement agreement. Id.
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The court held that the relator was not entitled to a share of the other
recoveries under the qui tam portion of the False Claims Act, because he played no
role in uncovering the defendant’s fraudulent behavior and did not identify the
same hospitals from which the Government obtained a settlement. Id. at *4. Here,
although Relator alleged, at most, a scheme loosely related to the one the
Government prosecuted, the parties and the alleged activities are plainly not the
same and the overlap, if any, is minimal. For these reasons, Relator has not shown
that it is entitled to, or has an interest in a share of, the Government’s criminal
recoveries that this Court can recognize. The Motion [79] should be denied.
III. CONCLUSION
After a thorough review and consideration of the First Motion [79] to
Recognize Relator’s Share, the record as a whole, and relevant legal authority, the
Court concludes that the Motion [79] to Recognize Relator’s Share should be denied.
IT IS, THEREFORE, ORDERED AND ADJUDGED that, the Estate of
Robyn Turner’s First Motion [79] to Recognize Relator’s Share is DENIED.
SO ORDERED AND ADJUDGED, this the 9th day of June, 2022.
s/ Halil Suleyman Ozerden
HALIL SULEYMAN OZERDEN
UNITED STATES DISTRICT JUDGE
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