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United States of America v. Gautam Gupta

August 30, 2011

UNITED STATES OF AMERICA, PLAINTIFF,
v.
GAUTAM GUPTA, JAANA MONIKA VIRTA-GUPTA, AND GAUTAM GUPTA, M.D., LLC, D/B/A THE NUTRITION CLINIC, AND RAKEESH WAHI, DEFENDANTS.



The opinion of the court was delivered by: Sue E. Myerscough, U.S. District Judge:

E-FILED Tuesday, 30 August, 2011 04:12:19 PM Clerk, U.S. District Court, ILCD

OPINION

This matter comes before the Court on Plaintiff United States of America's Motion to Reconsider Temporary Restraining Order. See d/e 6 (Motion). For the reasons stated below, the Court will not reconsider its finding that the Government is required to satisfy the four-factor test typically used in cases of injunctive relief. However, because the Motion recites proof sufficient to obtain a TRO, the Motion is ALLOWED.

RELEVANT FACTS

On August 24, 2011, Plaintiff United States of America (the Government), filed a Motion for Temporary Restraining Order and Preliminary Injunction (Motion) under 18 U.S.C. § 1345 . See d/e 3. The Government attached a 14-page affidavit from Michael Kuba, an Illinois State Police Officer, stating that his investigation of Dr. Gupta shows that Dr. Gupta violated 18 U.S.C. § 1347 by obtaining $2.3 million in fraudulently obtained health care payments. See d/e 3-1 at 8-9 (Aff. In Support of Injunctive Relief). Officer Kuba's affidavit detailed how from June 2001 to January 2010, Dr. Gupta and persons acting on his behalf systematically inflated bills they submitted for Medicaid reimbursement. The Complaint for Injunctive Relief filed against Dr. Gupta similarly alleged a $2.3 million dollar Medicaid fraud. See d/e 1.

By comparison, the Government's Motion for Entry of Temporary Restraining Order and Preliminary Injunction alleged fraud in excess of $20 million. See d/e 2. The $20 million figure is consistent with the amount alleged in a criminal indictment pending against Dr. Gupta wherein Dr. Gupta defrauded Blue Cross and Blue Shiled of Illinois. See United States v. Gupta, et al., 11-30043 (C.D.Ill. (July 13, 2011)). However, this Court does not consider amounts pertaining to the Blue Cross and Blue Shield of Illinois fraud since the amount alleged in the instant civil case is limited to the $2.3 million in Medicaid fraud.

The $2.3 in fraudulent Medicaid bills were sent to the Illinois Department of Health and Family Services' (HFS) offices in Springfield, Illinois for processing and payment. HFS administers the Medicaid program for the State of Illinois and received Medicaid funds pursuant to 42 U.S.C. § 1396, et seq.

Although the fraudulent scheme is over, Dr. Gupta is allegedly dissipating assets traceable to his fraud insofar as he is selling and transferring property he purchased with proceeds of the fraud. See d/e 3-1 at 10-14 (Aff. In Support of Injunctive Relief). Therefore, the Government moved to enjoin Dr. Gupta, and those acting on his behalf, from dissipating assets traceable to the scheme to defraud. Additionally, the Government alleges that while Dr. Gupta has sold The Nutrition Clinic, The Nutrition Clinic has at least $300,000 in outstanding accounts receivable. Id. at 13-14.

The Nutrition Clinic The Government filed a brief in support of its Motion. See Memorandum in Support of Temporary Restraining Order, Preliminary Injunction and Other Equitable Relief (d/e 4). The brief and the related pleadings allege that Dr. Gupta has fled this country to avoid prosecution. Prior to fleeing, Dr. Gupta provided his wife, Defendant Jaana Monika Virta-Gupta, with a "power of attorney" designed to liquidate and/or transfer assets in Dr. Gupta's name and in the name of his corporations within the United States. See, i.e., d/e 3-1 at 12-13 (Aff. In Support of Injunctive Relief).

This Court denied the Government's motion initially because the Government did not satisfy the four-factor test required for injunctive relief. See Text Order dated August 24, 2011 (citing United States v. Hoffman, 560 F.Supp.2d 772 (D.Minn. 2008)(applying four-factor test in context of 18 U.S.C. § 1345) and United States v. Williams, 476 F.Supp.2d 1368 (M.D.Fla. 2007)(same). However, the Court gave the Government leave to refile. See Text Order dated August 24, 2011.

On August 25, 2011, the Government moved for reconsideration by filing the instant Motion. As before, the Government contends that it need not satisfy the traditional four-factor test. Nonetheless, because the Government alternatively provides evidence to satisfy the four-factor test to support issuance of a TRO, this Court will enjoin Dr. Gupta, and those acting on his behalf, from dissipating assets traceable to the scheme to defraud. The injunction shall not apply to erstwhile Defendant Rakeesh Wahi, a medical doctor who worked with Dr. Gupta and allegedly participated in the fraud. The reason for this limitation is that the Government voluntarily dismissed Dr. Wahi from this case on August 26, 2011. See d/e 5 (Notice of Voluntary Dismissal).

JURISDICTION & VENUE

Because the Government is the plaintiff and a federal question is posed by the § 1345 issue, this Court has subject matter jurisdiction. See 28 U.S.C. §§ 1345, 1331. Personal jurisdiction and venue requirements are satisfied because relevant acts-the processing of Defendants' fraudulent bills at HFS' Springfield, Illinois office-occurred in this judicial district. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980) (personal jurisdiction exists where a defendant "purposefully avail[ed] [himself or herself] of the privilege of conducting activities" in the forum state); see 28 ...


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