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Eleventh Circuit Holds That Civil Whistleblowers Cannot Collect Awards from Criminal Forfeiture Proceedings

The Eleventh Circuit Court of Appeals recently issued an opinion affirming a district court’s ruling that a civil whistleblower was not entitled to an award arising from criminal forfeiture proceedings where the government decided to criminally prosecute the defendant. The case is United States v. Couch.

In Couch, the whistleblower (legally known as a “relator”) was a former employee of a pain management clinic in Alabama who filed a qui tam action under the False Claims Act (FCA) alleging that the clinic was submitting false claims to government healthcare programs. While the civil qui tam action was still pending, the government decided to criminally prosecute two doctors from the clinic for conspiracy to distribute controlled substances and conspiracy to commit healthcare fraud. The criminal allegations overlapped with the allegations in relator’s qui tam complaint. The two doctors were convicted while the civil qui tam action was still pending, and the relator tried to intervene in the criminal forfeiture proceedings to collect her award as a whistleblower.

In general, the qui tam provisions of the False Claims Act (FCA) permit whistleblowers to collect a portion of the government’s recovery as an award. The relator in Couch argued that the FCA permits relators to collect an award even when the government pursues remedies other than a qui tam action. However, the district court ruled that the criminal forfeiture statutes expressly prohibit third parties from obtaining forfeited property. The Eleventh Circuit agreed with the district court and held the relator was not entitled to any portion of the criminal forfeiture. However, the Court also noted that while the relator cannot collect any portion of the forfeited property, her pending qui tam action is not precluded by the criminal convictions, and she would be entitled to the entire recovery if she prevails in her qui tam suit.

The attorneys at CCLB represent healthcare providers of all types and sizes in connection with a wide-variety of regulatory and compliance matters, including government investigations, audits, and litigation. For any questions, or if we can assist you in connection with a healthcare regulatory or compliance issue or audit/investigation, please contact us at (404) 262-6505 or sgrubman@cclblaw.com.