The opinion of the court was delivered by: Robert F. Kelly, Sr. J.
Presently before the Court is the United States of America's ("Government") Motion for Garnishment Order against William King, M.D. ("Defendant"), Defendant's Response in Opposition and Government's Reply to the Response. For the reasons set forth below, the Motion for Garnishment Order will be granted.
On October 14, 2008, Defendant was convicted by a jury of thirteen counts of mail fraud in violation of 18 U.S.C. § 1341, fifty-nine counts of health care fraud in violation of 18 U.S.C. § 1347, and ten counts of making false statements in a health care matter in violation of 18 U.S.C. § 1035.*fn1 The Defendant was sentenced to a prison term of thirty-six months to begin on January 18, 2010, followed by three years of supervised release. Additionally, Defendant was ordered to pay $780,151 in restitution, $12,500 in criminal fines and $8,200 for a special assessment. The Defendant is currently scheduled to be released from custody in May 2012.
At sentencing this Court ordered that "restitution is due immediately." (Tr. Sentencing Hr'g at p. 59, July 24, 2009.) In addition, after taking into account the Defendant's ability to pay the restitution, our Judgment at sentence ("Judgment") reiterates that payment was to begin immediately. (J. at p. 7, July 24, 2009.) The Judgment further mandated that the Defendant participate in the Bureau of Prisons' Inmate Financial Responsibility Program and pay $25 per quarter towards the fine. (Id.) Any unpaid balance when released from custody was to paid in $500 monthly installments. (Id.)
Seven days after his sentencing, the Defendant filed for or consented to a divorce action in Maryland. (Tr. Mot. for Garnishment Order at p. 11, Feb. 24, 2012.) On this same day, Defendant entered into a property settlement agreement whereby he gave half of his assets, including half of the retirement accounts at issue in this case, to his now ex-wife. (Id.)
On March 7, 2011, the Government filed an Application for a Writ of Garnishment against the following five Garnishees: The Vanguard Group; T. Rowe Price; Mairs & Power, Inc.; Fidelity Investments; and Wachovia Bank N.A. (Application for Writ of Garnishment at 2, March 7, 2011, ECF No. 79.) Specifically, the Government believed the Garnishees were in possession, custody, and/or control of certain properties (i.e. retirement accounts) belonging to the Defendant which were not exempt from garnishment. (Id.) On this date, Defendant had completed remunerations for the special assessment, paid $27,604 toward restitution, but had not made any payments toward the criminal fines. (Id.) The current balance owed for restitution was $752,574. (Id.) The Government sought the writ to enforce this outstanding restitution balance.
On March 28, 2011, a Writ of Garnishment was issued by this Court. Through the responses from the Garnishees which were submitted to this Court, it was ascertained that Defendant had the following: two accounts at Vanguard Group worth $32,901.58;*fn2 four accounts with T. Rowe Price worth $20,609.82;*fn3 one account with Mairs & Power, Inc. worth $5,249.67;*fn4 three accounts with Fidelity Investments worth $95,424;*fn5 and no accounts with Wachovia.*fn6 In total, the Defendant had $154,185.07 in these accounts. The Defendant opposed the Writ of Garnishment and requested a hearing in a letter dated March 25, 2011. The Defendant filed an Objection to the Writ of Garnishment on April 13, 2011.
After receiving new information eliciting the possibility of additional financial accounts, the Government filed another Application for a Writ of Garnishment on May 20, 2011. (Second Application for Writ of Garnishment at 2.) This time the Garnishees were MG Trust Company, LLC and Aberdeen Proving Grounds Federal Credit Union. (Id.) On May 23, 2011, we granted the Government's Application for the Writ of Garnishment. In response, Aberdeen Proving Grounds Federal Credit Union asserted that the Defendant did not have any accounts with them.*fn7
However, Defendant did have a retirement account with MG Trust Company, LLC in the amount of $103,830.68.*fn8
On May 31, 2011, Defendant filed a "Continuing Objection to Answers to Writ of Garnishment Regarding Retirement Accounts" renewing all his previously filed objections and extending them to the two new Garnishees. (Objection to Writ of Garnishment, May 31, 2011, ECF No. 91.) Additionally, Defendant requested that this Court schedule a hearing to address the issues raised by the garnishment, after the filing of answers by the garnishees, the filing of briefs by the Government, the filing of a reply brief by the defense, and, on a date and time convenient to all counsel. (Id.)
From the date of Defendant's sentencing until January 2012, the Defendant paid a total of $28,004 in restitution. (Mot. of U.S. for Garnishment Order, January 27, 2012, ECF No. 95.) At this time, Defendant's outstanding restitution totaled $752,197. (Id. at 1.) On January 27, 2012, the Government submitted a "Memorandum of Law in Support of Motion of United States of America for Garnishment Order." In this motion, the Government moved for an order approving the final disposition of property subject to the Writs of Garnishment. (Id.) Specifically, the Government sought the entirety of the Defendant's accounts with Fidelity Investments, Mairs & Powers, Inc., MG Trust Company, LLC, The Vanguard Group and T. Rowe Price worth $258,015.13. (Id. at 3.)
On February 24, 2012, this Court heard oral arguments regarding the
Government's Motion to garnish the Defendant's accounts.*fn9
Subsequent to this hearing, the Government submitted a "Post
Hearing Supplemental Memorandum in Support of Motion for Garnishment
Order." On March 13, 2012, the Defendant responded by submitting a
memorandum to this ...