United States of America v. $88,029.08, More or Less, in United States Currency

Filing 93

MEMORANDUM OPINION AND ORDER denying interested parties' 72 MOTION for a perjury charge; granting United States' 76 MOTION to Dismiss civil action 2:11-0101; the USM is directed forthwith to return the seized currency to the interested parties and to reflect their receipt of the monies within the record of this case; denying as moot interested parties' 67 MOTION to Dismiss civil action 2:11-0101 as fraudulent and untimely; denying as moot interested parties' 68 VERIFI ED MOTION to Dismiss civil action 2:11-0101 for failure to state a claim; denying as moot interested parties' 80 MOTION for summary judgment; denying as moot interested parties' 86 REQUEST for an order returning $27,671.50 with pre judice; denying as moot United States' 73 MOTION for a hearing as to the United States' motions to dismiss and the interested parties' motions concerning a perjury charge against an Assistant U.S. Attorney and federal law enforcement agent; denying without prejudice the United States' 77 motion for entry of a certificate of reasonable cause; denying without prejudice interested parties' 79 and 87 MOTIONS to remove the assigned Assistant U.S. Attorney; the court d eclines the request seeking disciplinary action against the AUSA and the federal law enforcement agent; denying interested parties' 58 MOTION to clarify the 4/12/2011 order; to the extent that the interested parties seek at this point a ruling on the merits respecting their entitlement to the seized money involved in the lead action, the request is premature and denied without prejudice; denying interested parties' 62 MOTION for a grand jury investigation; denying as moot intereste d parties' 65 MOTION for Consolidation; denying interested parties' 85 MOTION for an order regarding subject matter jurisdiction; the United States is relieved of its further obligations under the 4/20/2011 scheduling order pending the magistrate judge's consideration of the 84 motion for modification of the scheduling order; this action is referred anew to the magistrate judge for further action that she deems appropriate. Signed by Judge John T. Copenhaver, Jr. on 8/8/2011. (cc: attys; any unrepresented party; U.S. Marshal) (skh)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
UNITED STATES OF AMERICA,
Plaintiff
v.

Civil Action No. 2:10-1087
(Lead action)

$88,029.08, More or Less,
in United States Currency,
UNITED STATES OF AMERICA,
Plaintiff
v.

Civil Action No. 2:11-0101
(Consolidated action)

$27,671.50, MORE OR LESS,
IN UNITED STATES CURRENCY
Defendant
IN THE MATTER OF THE SEIZURE
OF PROCEEDS ON DEPOSIT IN ACCOUNT
NOS. XXXXXX3002 AND XXXXXX7905,
WESBANCO BANK, WHEELING, WV,
IN THE NAME OF KATHERINE A. HOOVER
Magistrate Case No. 2:10-mj-0029
(Closed action)
IN THE MATTER OF THE SEARCH OF THE
BEDROOM USED BY DR. KATHERINE A. HOOVER
LOCATED AT 110 WEST SECOND AVENUE
WILLIAMSON, WV
Magistrate Case No. 2:10-mj-0035
(Closed action)
Interested parties:
Katherine Anne Hoover, M.D.
John F. Tomasic

MEMORANDUM OPINION AND ORDER
Pending are a number of motions in the above-styled
actions which the court lists in tabular form below for ease of
reference:
Case

Date

2:10-1087
2:11-0101

06/24/2011
03/15/2011

2:11-0101
2:10-1087

Dk.

Requested Relief

67
06

Interested parties’ motions to dismiss the
fraudulent untimely in rem action.

03/17/2011

08
68

Interested parties’ verified motions to dismiss
in rem action for failure to state a claim.

2:10-1087
2:11-0101

06/24/2011
03/29/2011

72
15

Interested party Katherine Hoover’s motions
requesting the court to rule on a perjury
charge against an Assistant United States
Attorney and a federal law enforcement agent.

2:10-1087
2:11-0101

06/24/2010
04/01/2011

73
16

United States’ motions for a hearing concerning
docket entries 8 and 15 above.

2:10-1087
2:11-0101

06/24/2011
04/08/2011

76
19

United States’ motions to dismiss.

2:10-1087
2:11-0101

06/24/2011
04/08/2011

77
20

United States motions for entry of a
certificate of reasonable cause.

2:10-1087
2:11-0101

06/24/2011
04/08/2011

80
24

Interested parties’ motions for summary
judgment.

2:10-1087
2:11-0101

06/24/2011
04/21/2011

79
23

Interested parties’ motions to remove the
assigned Assistant United States Attorney.

2:10-0029
2:10-0035

04/21/2011

30
30

Interested parties’ appeals of a December 21,
2010, order entered by the United States
Magistrate Judge.

2:10-1087

04/21/2011

58

Interested parties’ motion to clarify an order
entered April 12, 2011.

2:10-1087
2:11-0101

06/13/2011
06/13/2011

62
26

Interested parties’ motions for a grand jury
investigation.

2:10-1087
2:11-0101
2:10-0029
2:10-0035

06/24/2011
06/24/2011
06/24/2011
06/24/2011

65
29
32
32

Interested parties’ motion for consolidation.

2:10-1087

07/13/2011

84

United States’ motion to modify the scheduling
order.

2

2:10-1087

07/18/2011

85

Interested parties’ request for an order
regarding subject matter jurisdiction.

2:10-1087

07/18/2011

86

Interested parties’ request for an order
returning $27,671.50 with prejudice.

2:10-1087

07/22/2011

87

Request for an order removing the Assistant
United States Attorney.

2:10-1087

07/22/2011

88

Motion for a grand jury investigation into
actions by agents of the federal government and
the United States Judiciary.

The interested parties' request that the court “rule on
a perjury charge” against an Assistant United States Attorney and
a federal law enforcement agent (“motion for a perjury charge”
(dckt. nos. 72, 15)).

The motions actually “request[] that

perjury charges be filed against” the two federal officials.
(Mots. at 1).

The request is answered by no less than the Fifth

Amendment, which provides pertinently that “[n]o person shall be
held to answer for a capital, or otherwise infamous crime, unless
on a presentment or indictment of a Grand Jury . . . .”

U.S.

Const. amend. V (emphasis added).
In sum, the Executive Branch is the decision maker
respecting presentment.

United States v. Ashley Transfer &

Storage Co., Inc., 858 F.2d 221, 224 (4th Cir. 1988) (“In our
system, courts are not free to ‘interfere with the free exercise
of the discretionary powers of the attorneys of the United States
in their control over criminal prosecutions.’”) (quoting United
3

States v. Cox, 342 F.2d 167, 171 (5th Cir. 1965)).

The court,

accordingly, ORDERS that the motions for a perjury charge (dckt.
nos. 72, 15) be, and they hereby are, denied.
The United States’ moves to dismiss civil action 2:110101 (dckt. nos. 76, 19).

It asserts that, after obtaining

additional bank records respecting the account holding the monies
for which forfeiture was sought, it is apparent that the sums
therein

neither constitute, nor are traceable to, proceeds from

the illegal distribution of controlled substances.
Based upon this admission, it is ORDERED that the
United States’ motions to dismiss civil action 2:11-0101 (dckt.
nos. 76, 19) be, and they hereby are, granted.

It is further

ORDERED that the United States Marshal Service be, and it hereby
is, directed forthwith to return the seized currency to the
interested parties and to reflect their receipt of the monies
within the record of this case.
In view of this foregoing disposition, it is further
ORDERED that the interested parties’ (1) motions to dismiss civil
action 2:11-0101 as fraudulent and untimely (dckt. nos. 67, 6),
(2) verified motion to dismiss civil action 2:11-0101 for failure
to state a claim (dckt. nos. 68, 8), (3) motion for summary
4

judgment (dckt. nos. 80, 24), and (4) interested parties' request
for an order returning $27,671.50 with prejudice (dckt. no. 86)
be, and they hereby are, denied as moot.
Further, in view of the disposition of the United
States’ motions to dismiss and the interested parties’ motions
concerning a perjury charge against an Assistant United States
Attorney and federal law enforcement agent, it is ORDERED that
the United States’ motion for a hearing as to those dual requests
(dckt. nos. 73, 16) be, and they hereby are, denied as moot.
The United States also moves for entry of a certificate
of reasonable cause pursuant to 28 U.S.C.A. § 2465 (dckt. nos.
77, 20).

Section 2465(a)(2) provides as follows:

Upon the entry of a judgment for the claimant in any
proceeding to condemn or forfeit property seized or
arrested under any provision of Federal law-. . . .
(2) if it appears that there was reasonable
cause for the seizure or arrest, the court
shall cause a proper certificate thereof to
be entered and, in such case, neither the
person who made the seizure or arrest nor the
prosecutor shall be liable to suit or
judgment on account of such suit or
prosecution, nor shall the claimant be
entitled to costs, except as provided in
subsection (b).
Id.

5

The court defers ruling on the matter pending the
conclusion of the lead action.

The court, accordingly, ORDERS

that the motions for entry of a certificate of reasonable cause
(dckt. nos. 77, 20) be, and they hereby are, denied without
prejudice.
The interested parties' seek to remove the assigned
Assistant United States Attorney (“AUSA”) inasmuch as they view
her as a witness (“motions to remove”) (dckt. nos. 79, 23, 87).
The interested parties assert that the AUSA “will be required to
give evidence as to when she knew that [sic] facts regarding the
origin of the $27,671.50.”

(Mot. to Rem. at 1).

It is not

apparent at this time that the AUSA is properly characterized as
a witness.

The court, accordingly, ORDERS that the motions to

remove (dckt. nos. 79, 23, 87) be, and they hereby are, denied
without prejudice.1
The interested parties’ appeals filed in the search
warrant actions, 2:10-0029 and 2:10-0035 (dckt. nos. 30, 30),
were adjudicated by the memorandum opinion and order entered in
each of those cases by the undersigned on April 12, 2011.
The motions to remove also
against the AUSA and the federal
to the Court.” (Mots. to Remove
presently exists for making such
the request.
1

The

seeks disciplinary action
law enforcement agent “for lying
at 3). Inasmuch as no basis
a finding, the court declines
6

court, accordingly, ORDERS that the appeals (dckt. nos. 30, 30)
be, and they hereby are, dismissed.
Additionally, magistrate judge actions 2:10-0029 and
2:10-0035 have been resolved and final orders have been entered
therein.

The interested parties are directed to make all further

filings in the lead civil action.

Irrespective of the style used

by the interested parties, the Clerk is directed to treat any
attempted future filings in the search warrant actions as filings
herein and docket them accordingly.
The interested parties’ motion to clarify the April 12,
2011, order (dckt. no. 58) appears to seek reconsideration of
their earlier request to recuse the magistrate judge.
no basis for either recusal or reconsideration.

There is

The court,

accordingly, ORDERS that the motion to clarify (dckt. no. 58) be,
and it hereby is, denied.2
The interested parties’ motions for a grand jury
investigation (dckt. nos. 62, 26, 88) relate to their contentions
that certain federal officials unlawfully raided Dr. Katherine
Hoover’s medical practice, illegally seized two bank accounts,
To the extent that the
point a ruling on the merits
seized money involved in the
premature and denied without
2

interested parties seek at this
respecting their entitlement to the
lead action, the request is
prejudice.
7

and engaged in other misdeeds.

The requested relief appears

beyond that which the court might lawfully allow.

See Fed. R.

Crim. Proc. 6(a) (noting the court’s authority only to summon a
grand jury); United States v. Williams, 504 U.S. 36, 47 (1992)
(“Judges’ direct involvement in the functioning of the grand jury
has generally been confined to the constitutive one of calling
the grand jurors together and administering their oaths of
office.”); In re Grand Jury Proceedings, 142 F.3d 1416, 1424-25
(11th Cir. 1998) (“Historically, the grand jury has operated as
an autonomous body, independent of the court or prosecutors.”)
(citing Stirone v. United States, 361 U.S. 212, 218 (1960)
(explaining that constitutional right to grand jury indictment
presupposes a “group of fellow citizens acting independently of
either prosecuting attorney or judge”).
The court, accordingly, ORDERS that the motions for a
grand jury investigation (dckt. nos. 62, 26, 88) be, and they
hereby are, denied.
The interested parties’ four motions for consolidation
(dckt. nos. 65, 29, 32, 32) filed in each of the above-styled
civil actions are addressed by the June 24, 2011, order entered
by the magistrate judge.

The court, accordingly, ORDERS that the

motions for consolidation be, and they hereby are, denied as
moot.
8

On July 18, 2011, the interested parties moved in civil
action 2:10-1087 for “AN ORDER OF SUBJECT MATTER JURISDICTION”
(dckt. no. 85).

The interested parties ask the court to issue an

order recognizing that the practice of medicine is regulated by
the states and not the federal sovereign.

This request is a

variant of the numerous prior subject matter jurisdiction
challenges lodged by the interested parties.

They, in essence,

seek to divest the United States of the power to prosecute this
forfeiture action.
Treating the request as a challenge pursuant to Rule
12(b)(1), the governing standards are clear.

Subject matter

jurisdiction may be challenged in one of two ways.

Kerns v.

United States, 585 F.3d 187, 192 (4th Cir. 2009) (citing Adams v.
Bain, 697 F.2d 1213, 1219 (4th Cir. 1982)).

The interested

parties appear to rely upon the first means, namely, contending
“‘that . . . [the verified] complaint simply fails to allege
facts upon which subject matter jurisdiction can be based.’”
(citation omitted).

Id.

This type of a facial challenge to subject

matter jurisdiction results in plaintiff being “‘afforded the
same procedural protection as he would receive under a Rule
12(b)(6) consideration.’”

Id. (citation omitted).

In other

words, “the facts alleged in the complaint are taken as true, and
9

the motion must be denied if the complaint alleges sufficient
facts to invoke subject matter jurisdiction.”

Id.

Title 28 U.S.C. § 1345 provides in pertinent part as
follows:
[T]he district courts shall have original jurisdiction
of all civil actions, suits or proceedings commenced by
the United States, or by any agency or officer thereof
expressly authorized to sue by Act of Congress.
28 U.S.C. § 1345.
This civil action is one of the type contemplated by
section 1345.

It is an in rem proceeding instituted pursuant to

21 U.S.C. § 881(a)(6) and 18 U.S.C. § 983(a)(3)(A).

Section

881(a)(6) provides pertinently as follows:
The following shall be subject to forfeiture to the
United States and no property right shall exist in
them:
. . . .
All moneys . . . or other things of value
furnished or intended to be furnished by any
person in exchange for a controlled substance
or listed chemical in violation of this
subchapter, all proceeds traceable to such an
exchange, and all moneys . . . used or
intended to be used to facilitate any
violation of this subchapter.
21 U.S.C. § 881(a)(6).

Section 983(a)(3) provides pertinently as

follows:
Not later than 90 days after a claim has been filed,
the Government shall file a complaint for forfeiture in
10

the manner set forth in the Supplemental Rules for
Certain Admiralty and Maritime Claims or return the
property pending the filing of a complaint . . . .
18 U.S.C. § 983(a)(3)(A).
The United States alleges, inter alia, that Dr. Hoover
served as a physician at Mountain Medical Care Center, LLC, in
Williamson.

During that time, the United States further asserts

that she conspired with others to unlawfully obtain and
distribute hydrocodone and alprazalom, schedule III and IV
controlled substances, in violation of 21 U.S.C. §§ 846 and
841(a)(1).
In United States v. Singh, 54 F.3d 1182, 1186 (4th Cir.
1995), our court of appeals noted as follows:
To convict a physician of distributing a controlled
substance in violation of § 841, the Government must
prove the following three elements. First, it must show
that the defendant “distributed or dispensed a
controlled substance.” Second, it must prove that, in
doing so, “he acted knowingly and intentionally.”
Finally, and most importantly for our purposes, the
evidence must show that the defendant's “actions were
not for legitimate medical purposes in the usual course
of his professional medical practice or [were] beyond
the bounds of medical practice.”
Id. at 1186-87 (citations omitted).
Paragraphs 10(A) and (B) of the complaint allege in
particular as follows:
11

(A) In 2004, Dr. Hoover was one of four physicians
working at the clinic at that time. The clinic averaged
150 patients per day but on busy days that number could
easily increase to 300 to 400 patients per day.
Typically the money generated from the first week of
the month paid all salaries and overhead expenses and
the remaining three weeks income was pure profit for
the business.
(B) Approximately 70% of patients seen at the clinic
paid in cash, paying $450 for a first time patient and
$150 for established patients . The clinic generally
only accepted insurance from individuals involved in
Kentucky due to "P.I.P.", a Kentucky based private
insurance program which guaranteed the clinic the sum
of $10,000 per patient. Patients were then transferred
to the Aquatic Rehab Center until the $10,000 was
exhausted. The patient then became a cash patient,
returning to the clinic on a monthly basis.
(C) Dr. Hoover was known by clinic staff and patients
to prescribe pain medication "to anyone." As a result,
her prescribing practices generated the largest income
for the clinic.
(Verif. Compl. ¶¶ 10(A)-(C); see also ¶ 11 (“Prescription records
of the West Virginia Board of Pharmacy, for the period December
2002 through January 25, 2010, reveal that Dr. Katherine Hoover
was the number one prescriber of controlled substances in West
Virginia, based upon the number of prescriptions filled under her
DEA registration number as reported by pharmacies in West
Virginia. Since December 2002, there have been 355,132
prescriptions for controlled substances issued under her DEA
number.”)).

12

Paragraph 18 of the verified complaint further alleges
as follows:
Proceeds generated by the Mountain Medical Care Center
have been deposited into . . . [an individual’s] BB&T
accounts and thereafter, have been transferred in part
into Hoover's WesBanco Account No. XXXXXXXXX7905,
through the form of checks drawn on the . . .
[individual’s] account. Accordingly, the defendant
currency totaling $85,127.08, representing the balance
of WesBanco Account No. XXXXXXXXX7905, seized pursuant
to a federal seizure warrant, constitutes proceeds
traceable to one or more controlled substance
violations and, therefore, is forfeitable to the United
States pursuant to 21 U.S.C. § 881(a)(6).
(Verif. Compl. ¶ 18).
The allegations of the verified complaint, taken as
true, and read in concert with the aforementioned statutes,
sufficiently allege subject matter jurisdiction.

Based upon the

foregoing, it is ORDERED that the motion for an order regarding
subject matter jurisdiction (dckt. 85) be, and it hereby is,
denied.3

Dr. Hoover has apparently already refused to appear for a
deposition based upon her meritless challenge of subject matter
jurisdiction. While the interested parties may wish to preserve
their challenge to subject matter jurisdiction for purposes of
any appeal following the entry of final judgment herein, any
further challenge by them on the same grounds as those dealt with
herein would be inappropriate. Absent unforeseen new grounds,
any future challenge to subject matter jurisdiction in this court
will be dealt with summarily and perhaps suggest the imposition
of appropriate sanctions.
3

13

Finally, the United States has moved for modification
of the scheduling order (dckt. no. 84).

It notes that it has

attempted, without success, to depose Dr. Hoover so that its
potential expert witness will be able to evaluate her actions for
purposes of preparing the report contemplated by Rule 26(a)(2).
The United States adds, inter alia, that Dr. Hoover's
unwillingness to comply with its requests thus far has hampered
its ability to determine the written discovery that must be
served in the case.
Inasmuch as the magistrate judge authored the schedule
entered April 20, 2011, the court leaves to her the entry of a
revised schedule.

The court, however, ORDERS that the United

States be, and it hereby is, relieved of its further obligations
under the April 20, 2011, scheduling order pending the magistrate
judge’s consideration of the matter.
The court ORDERS that this action be, and it hereby is,
referred anew to the magistrate judge for further action that she
deems appropriate.

14

The Clerk is directed to forward copies of this written
opinion and order to all counsel of record and any unrepresented
interested parties.
DATED: August 8, 2011

John T. Copenhaver, Jr.
United States District Judge

15