Federal False Claims Act; and 3) that the plaintiff has failed to
show that she was unjustly enriched by the amount claimed.
Where, as here, a summary judgment motion is supported by
affidavits and other documentation, an adverse party may not rest
on his pleadings but must otherwise show that a genuine issue
remains for trial. Fed.R.Civ.P. 56(e). In the case at bar, the
claims against defendant Lyons are: 1) that she fraudulently
received government monies which she refuses to return or account
for; 2) that she received payments in violation of the Federal
False Claims Act, 31 U.S.C. § 3729 et seq.; and 3) that she was
unjustly enriched in the amount of $40,448.82. As to the first
claim, the plaintiff seeks to have a trust imposed and,
additionally, seeks an accounting of the funds received.
Lyons' claim that the plaintiff has failed to show that she
fraudulently caused funds to be issued to her is irrelevant. At
no time does the government contend that Lyons caused the
issuance of the funds. As to Lyons, all claims deal with her
receipt and use of the monies.
Lyons' contention concerning the Federal False Claims Act is
also without merit. The fraudulent submission of checks for
payment is within the Federal False Claims Act and establishes a
violation thereof. Scolnick v. United States, 331 F.2d 598, 599
(1st Cir. 1964). In the case at bar, despite her protestations to
President asking for the stoppage of the checks, Lyons clearly
accepted the checks, presented them, and deposited the proceeds
in her bank account. Given these facts, the government is
entitled to summary judgment under the Federal False Claims Act.
As to the amount of the monies received, the plaintiff has
submitted actual business records reflecting the amounts of the
payments made. According to these records, Lyons received
$40,448.82 to which she was not entitled. As she submits nothing
which would indicate that the amounts reflected in the
government's records are inaccurate or otherwise unreliable,
Lyons cannot contend that the amount plaintiff claims she
received is incorrect. Lyons' assertion in this regard therefore
also must fall.
In her motion, defendant Delridge claims that 26 U.S.C. § 6103
requires that the evidence against her be excluded. For the
reasons discussed above in connection with defendant President,
it is apparent that Delridge's claim in this regard is without
merit. Similarly, Delridge's argument that the statute of
limitations bars the plaintiff from bringing certain claims is
also in error. Finally, as with Lyons, it is undisputed that
Delridge submitted the fraudulently obtained checks for payment.
A claim under the Federal False Claims Act has therefore been
established and cannot be contested by Delridge by an assertion
that the elements of the statute have not been met.
Where, as here, a party responding to a summary judgment motion
fails to raise by affidavit or other materials a genuine issue of
material fact, the facts presented in the moving parties'
materials shall be considered established. Wang v. Lake Maxinhall
Estates, Inc., 531 F.2d 832 (7th Cir. 1976). In the instant case,
the plaintiff has substantiated each of its claims against
President and Lyons with affidavits, canceled checks, altered
payment vouchers, and the admissions of both defendants. The
defendants do not challenge the facts contained in these
materials submitted by the government; rather, the admissibility
of certain of the documents is challenged as is the timeliness of
the suit given the statute of limitations on some of the claims.
Having determined that the defendants' assertions are without
facts furthered by the plaintiffs are established and are
sufficient to establish the allegations contained in the
complaint. The plaintiff's motion for summary judgment is
therefore granted as to all relevant Counts against defendants
President and Lyons and the motions to dismiss or strike filed by
defendants President and Delridge are denied.
Under Count I, damages are assessed against defendant
Maggielean President in the amount of $585,797.81 plus interest
and costs. Under Count II, the Court hereby orders an accounting
by defendants President and Lyons with respect to all monies
constituting the proceeds from the funds defrauded as well as all
monies and real and personal property derived therefrom. In
addition, the Court hereby imposes a constructive trust upon all
property, including earnings, income, profits, proceeds,
benefits, and other things of value identified as resulting from
the above misconduct, however held, concealed, or distributed,
for the use of plaintiff as beneficiary. As to Count III,
judgment is entered under the Federal False Claims Act, 31 U.S.C. § 3729
et seq., against defendants President and Lyons in the
amount of double the damages assessed against each plus any
statutory forfeitures. Finally, under Count IV, judgment is
entered against defendants in the amounts they were unjustly
enriched, specifically $355,166.30 against defendant President
and $40,448.82 against defendant Lyons, plus interest and costs.
IT IS SO ORDERED.
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