1/16/25: Criminal forfeiture case

In United States v. Omidi, --- F.4th ---, 23-1959 (9th Cir. 2025), the Court  affirmed the district court’s forfeiture judgment of nearly $100 million in a case in which Julian Omidi and his business, Surgery Center Management, LLC (SCM), were convicted of charges arising from their “Get Thin” scheme in which Omidi and SCM defrauded insurance companies by submitting false claims for reimbursement.

Here, the government sought forfeiture of the proceeds of Omidi and SCM’s mail and wire fraud violations under 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c). While 18 U.S.C. § 981 governs civil forfeiture actions, 28 U.S.C. § 2461(c) “permits the government to seek criminal forfeiture whenever civil forfeiture is available and the defendant is found guilty of the offense[.]” United States v. Newman, 659 F.3d 1235, 1239 (9th Cir. 2011) (emphasis omitted), abrogated on other grounds by Honeycutt v. United States, 581 U.S. 443, 454 (2017). When applicable, such forfeiture is mandatory. Id. at 1240; 28 U.S.C. § 2461(c). If the government seeks forfeiture of specific property, such as the proceeds at issue here, it must establish “the requisite nexus between the property and the offense,” Fed. R. Crim. P. 32.2(b)(1)(A), by a preponderance of the evidence.

The question in this case is whether the district court erred in ordering the forfeiture of all Get Thin’s proceeds, even though conceivably some of the incoming funds ultimately paid for legitimate and medically necessary procedures. After a review of the relevant law and facts, we conclude that the district court got it right. 

[W]e follow our sister circuits to conclude that in a forfeiture case seeking proceeds of a fraud scheme under § 981(a)(1)(C), there is no so-called “100% Fraud Rule.” All proceeds directly or indirectly derived from a health care fraud scheme like Get Thin—even if a downstream legitimate transaction conceivably generated some of those proceeds—must be forfeited. The district court did not err in so concluding.

1/14/25: False answers to unlawful questions.

In United States v. Patnaik, --- F.4th ---, No. 23-10043 (9th Cir. 2025), the Court reversed the district court’s judgment dismissing an indictment charging the defendants with submitting fraudulent H-1B visa applications, and remanded for reinstatement of the criminal charges.

Before the district court, Defendants asserted that these allegedly false statements could not be materially false statements because it was unlawful for the government to ask for such information under ITServe All., Inc. v. Cissna, 443 F. Supp. 3d 14 (D.D.C. 2020). The district court accepted Defendants’ argument and granted their motion to dismiss the indictment. 

Yet, under longstanding principles, the government may protect itself against “those who would swindle it” even if the government demanded answers to questions it had no right asking. See United States v. Kapp, 302 U.S. 214, 218 (1937). So lying on H-1B visa applications remains visa fraud even when the lies were given in response to questions the government can’t legally ask—as long as the misrepresentations could have influenced USCIS at the time they were made. We thus reverse. 

This case turns on the element of materiality. A visa-application statement is material if it “could have affected or influenced the government’s decision to grant th[e] petition[].” United States v. Matsumaru, 244 F.3d 1092, 1101 (9th Cir. 2001). Materiality is assessed “at the time the alleged false statement was made” and “[l]ater proof that a truthful statement would not have helped the decision-making body does not render the false [statement] immaterial.” United States v. McKenna, 327 F.3d 830, 839 (9th Cir. 2003) (simplified).

The indictment sufficiently alleges a material misrepresentation. By law, H-1B petitioners must “establish that the H-1B beneficiary employees would fill specific, bona fide positions that were available at the time [the petitioner] filed the petitions, and that there was, or would be, a legitimate employer-employee relationship between [the petitioner] and the H-1B beneficiaries.” See Prasad, 18 F.4th at 316. Accurate information on where and for whom the H-1B beneficiaries will work could affect or influence the decision to grant the H-1B visa petition. See Matsumaru, 244 F.3d at 1101. Thus, a jury could find Defendants’ alleged false statements material. 

The principle that the government may punish untruthful responses to unlawful questions as fraud goes back to the Supreme Court’s 1937 Kapp decision. Since then, the Court’s cases “have consistently—indeed without exception—allowed sanctions for false statements or perjury; they have done so even in instances where the perjurer complained that the Government exceeded its constitutional powers in making the inquiry.”