Sixth Circuit Rules that the U.S. District court had jurisdiction to order Angela Ford to produce an accounting of the distribution of her Fen Phen assets handled by her

The Sixth Circuit has upheld the power of the U. S. Attorney to obtain an accounting from Angela Ford, but says review of her personal finances is “not yet ripe”.

See:
11-6187: USA v. William Gallion, et al :: Sixth Circuit :: US Court of …
See full text of Sixth Circuit Order at:
http://www.leagle.com/xmlResult.aspx?page=1&xmldoc=In FCO 20121102103.xml&docbase=CSLWAR3-2007-CURR&SizeDisp=7

U.S. v. GALLION
UNITED STATES OF AMERICA, Plaintiff-Appellee,
v.
WILLIAM J. GALLION; SHIRLEY A. CUNNINGHAM, JR.; MELBOURNE MILLS, JR., Defendants, and
ANGELA M. FORD, Appellant.
No. 11-6187.
United States Court of Appeals, Sixth Circuit.
Filed November 2, 2012.

Before: MERRITT, MCKEAGUE, and STRANCH, Circuit Judges
(excerpt)
The Government may enforce a restitution order “in accordance with the practices and procedures for the enforcement of a civil judgment under Federal law or State law,” 18 U.S.C. §§ 3613(a) & 3664(m)(1)(A)(i), which includes utilization of the Federal Debt Collection Procedures Act (FDCPA). United States v. Kollintzas, 501 F.3d 796, 801 (7th Cir. 2007). The Government may enforce the restitution order against all of the defendants’ property or property rights, with certain limited exceptions. 18 U.S.C. § 3613(a). Importantly, the statute transforms the restitution order into a lien in favor of the Government on all of the defendants’ property and property rights. 18 U.S.C. § 3613(c). Under the MVRA, the Government may enforce a restitution order “by all other available and reasonable means.” 18 U.S.C. § 3664(m)(1)(A)(ii).
These collection mechanisms, including civil procedures, may be utilized by the Government in federal court in the same criminal case in which the district court ordered the payment of restitution. See Kollintzas, 501 F.3d at 801. “[T]here is no concern about the district court’s jurisdiction” over such collection procedures, id., because “[t]he United States always gets to litigate in its own courts.” United States v. Vitek Supply Corp., 151 F.3d 580, 586 (7th Cir. 1998). Title 18 U.S.C. § 3231 and 28 U.S.C. § 1345 grant the district court jurisdiction over restitution enforcement proceedings. Kollintzas, 501 F.3d at 801. Therefore, we conclude that the district court had jurisdiction to order Ford to provide an accounting, which is an “available and reasonable means” to enforce the federal restitution order.2 18 U.S.C. § 3664(m)(1)(A)(ii).
Ford contends that the Federal Rules of Civil Procedure generally do not permit a judgment creditor to discover the personal assets of a non-party, citing Burak v. Scott, 29 F.Supp. 775, 776 (D.D.C. 1939). She also alleges that the Government did not employ a civil judgment collection mechanism, such as a subpoena, to bring her before the court to obtain discovery.
We are not persuaded by these arguments because Ford stood in a unique relationship to the criminal and civil litigation in her dual role as the appointed crime victims’ representative and as a private civil lawyer. Her desire to protect her personal financial information and to retain the attorney’s fees she earned is certainly understandable.
Any issues concerning the Government’s ongoing efforts to obtain and/or use Ford’s private financial information to collect restitution are not yet ripe for our consideration.
We think it was reasonable, however, for the Government to ask Ford as an officer of the court to provide the requested information. When Ford declined to provide all of the requested information, the Government reasonably resorted to the court’s authority to obtain an accounting. See 18 U.S.C. § 3664(m)(1)(A)(ii); Kollintzas, 501 F.3d at 801. Service of a subpoena on Ford likely would have produced the same information, but under the circumstances, the district court had jurisdiction to order Ford to produce an accounting.

LAWREADER ARTICLE PRECEDING THE LAST ORDER OF THE SIXTH CIRCUIT:

SIXTH CIRCUIT ISSUES SHOW CAUSE ORDER TO ANGELA FORD TO EXPLAIN WHY HER APPEAL FROM JUDGE REEVES DISCLOSURE ORDER SHOULD NOT BE DISMISSED – U.S. Attorney seeks Angela Ford’s banking records and more…

On August 28, 2012 the Sixth Circuit Court of Appeals issued an order giving Angela Ford and the U.S. Attorney’s Office a short time to show cause why Ford’s appeal efforts to avoid disclosure of the names of the attorneys with whom she shared legal fees shouldn’t be dismissed.
For close to two years the U.S. Attorney’s Office has been seeking disclosure of information about Angela Ford’s handling of some $42 million dollars in assets seized from William Gallion, Shirley Cunningham et al. In a story written by Courier Journal Andy Wolfson, Ford admitted that she had shared her attorney fees “with other attorneys”. She continues to refuse to disclose information about her distribution of funds she seized from Gallion et al, in a court ruling which has been set aside by the Court of Appeals, and which is now on discretionary review by the Kentucky Supreme Court.

Ford has filed two appeals to the Sixth Circuit seeking to avoid having provided this information to the U.S. Attorney’s Office. U.S. District Judge Danny Reeves has previously ordered her to provide this information to the U.S. Attorney.
It is almost a certainty that the show cause letter by the Sixth Circuit means that Ford will have to release that information to the U.S. Attorney. The briefs reveal that the U.S. Attorney is seeking disclosure of Angela Ford’s personal finances and banking accounts.
The question must be asked. Why is Angela Ford resisting the efforts of the U.S. Attorney. She was appointed “victim’s advocate” by the Federal Judge in the Fen Phen criminal trial. The federal court had jurisdiction to award her a fee, but she jumped the gun and seized assets and made distributions without consulting with the Federal court.
The very Circuit Court judgment she relied on to seize $42 million in assets was set aside by the Court of Appeals, and is now on appeal to the Ky. Supreme Court.
The granting of discretionary review of the Court of Appeals ruling shocked many. The delay in ruling on this appeal may suggest that there is an internal argument among the Justices and they may be having trouble in coming to agreement on a ruling.
The Supreme Court could well benefit from waiting for final disclosure in the Federal Court of Ford’s assets and distribution. The U.S. Attorney has been dedicated to obtain discovery and documentation of Ford’s financial dealings.
The briefs reveal that the U.S. Attorney is seeking far more information than just a disclosure of which attorneys she shared fees with. We would suspect that the U.S. Attorney is not playing games here….we wish we knew what they know, but they are tight-lipped. LawReader called the U.S. Attorney today, and they would only confirm that the final ruling of the Sixth Circuit had not yet been released.
Ford has already distributed $42 million dollars. If the Supreme Court upholds the Court of Appeals it will be almost impossible for Ford to recover the expended funds and place them in escrow pending the new trial which was ordered by the Court of Appeals. How many of Ford’s 400 clients received a check from her and still have all the money in their bank?
The potential violations of the Supreme Court rules regarding handling client’s money, communicating with clients, etc. are mind boggling. One must wonder why the KBA Bar Counsel has apparently chosen to sit quietly sat on the sidelines. The KBA could be of great assistance to the U.S. Attorney in convincing Angela Ford that she must be transparent regarding the handling of client’s funds. This whole episode appears like the movie “Groundhog Day” redux. Didn’t this all start out with a claim of mishandling of the Fen Phen clients money?
Ford has argued that the Ct. of Appeals reversal had no effect on her right to collect the $42 million and to disburse the money to herself, her clients, and “other attorneys”. That legal theory is highly contested by legal scholars. The ruling of the Court of Appeals set aside the Circuit Court summary judgment of Judge Weir…and Ford is appealing to get the Circuit Court judgment reinstated.
The pending efforts of the U.S. attorney to obtain discovery of Ford’s handling of the $42 million would have inspired quick action and support by the KBA in most cases, but strangely in this case, the KBA has stood by and allowed Ford to hide her financial dealings with her client’s money.
The action of the Sixth Circuit basically says, “the Federal District Judge has ruled that Ford must provide a disclosure of her handling of the $42 million, we have previously upheld that ruling, and the U.S. Attorney is entitled to full disclosure. And the second appeal to the Sixth Circuit will be dismissed due to a lack of jurisdiction of the Sixth Circuit to interfere in the rulings of the Federal District Court.”
LawReader goes out on a limb and guesses the Sixth Circuit’s ruling on the show cause briefs (described below) will be handed down before the end of the year, if not sooner.
There are three pleadings discussed in this article. The Sixth Circuit’s show cause order, Ford’s supplemental brief and the U.S. governments brief.
THE SIXTH CIRCUIT ORDER STATES:
“It is not apparent to the Court that there is a continuing case or controversy to support appellate jurisdiction in this appeal. Appellant Angela ford is aggrieved by the district court’s order for disclosure or a sealed accounting to the government. Both the district court and the Sixth Circuit have denied her request to stay the disclosure.
Hence, the panel assumes the information has either been disclosed to the government or is available for its review. The relief sought by appellant (i.e., that the court vacate the order of disclosure), would not undo the disclosure and would appear to be moot. Insofar as the appellant may be concerned about potential misuse or further disclosure of the information, such an appellate claim would appear not to be ripe.
Accordingly, the appellant shall show cause not later than Sept. 5, 3012, why this appeal should not be dismissed for lack of a justiciable controversy. The government shall file its response not later than Sept. 12, 2012. Each supplemental brief shall be limited to five pages in length.
Entered By Order of the Court – Leonard Green, Clerk
Issued August 28, 2012.”
IN THE SUPPLEMENTAL BRIEF PREPARED AND FILED BY R. KENYON MEYER OF DINSMORE AND SHOHL, IN BEHALF OF ANGELA FORD IT IS ARGUED:
1. “…A continuing case or controversy exists between her and the United States concerning the orders on appeal, which require Ford to provide an accounting including information about her personal finances.”
2. “Although the sealed accounting has been made available to the Unites States, the United states has taken the position that the district court’s June 29, 2011 and September 9, 2011 orders require Ford to produce more information than what was contained in the sealed accounting and to provide updated information about her personal funds on an ongoing basis. “
3. “On November 19, 2011, Ford provided the United States with additional information regarding funds collected by her and not distributed to the victims, including information about funds collected in 2011. …Four days later, the United States wrote to Ford’s counsel, requesting additional information regarding those funds, including recent bank statements, year-to-date ledgers for each account, and current financial statements.”
4. “In early December of 2011, Ford produced additional documents in response these (sic) continued requests. Four days later, the United States indicated in an email that it believes that the district court’s orders entitle the government to obtain even more additional information from Ford including personal bank statements.”
5. “Thus, even though the initial accounting filed under seal has been made available to the United States, the orders on appeal continue to subject Ford to ongoing efforts by the United states to obtain records from her. Ford has a “personal stake” in whether she can be compelled to provide information on her personal finances, and this Court can no doubt grant Ford “meaningful relief” by vacating the orders providing the orders that are providing the basis for the government’s ongoing efforts to obtain such information.”
6. “The United States possesses numerous records that have been produced by Ford to comply with the orders on appeal. These records contain information about Ford’s personal finances. If this Court vacates the orders, this Court or the district court could order the government to return to Ford or destroy records that Ford has produced to the United States. …This Court is capable of providing Ford with “meaningful relief” by vacating the orders on appeal, so Ford’s appeal should not be dismissed as moot. See American Atheists, 567 F.3d at 287.”
THE UNITED STATES ASST. ATTORNEY CHERYL D. MORGAN SUBMITTED A SUPPLEMENTAL BRIEF IN BEHALF OF THE UNITED STATES:
Issues raised included:
1. SUMMARY OF ARGUMENT: This appeal should be dismissed for lack of jurisdiction. In her initial brief, Ford sought the vacatur of the district court’s orders requiring her to disclose an accounting that she had prepared. Ford’s appeal is moot because an accounting has been produced to the United States. Thus there is no case or controversy for this Court to review.
(LawReader footnote: Vacatur is defined by a legal dictionary as: vacatur noun abolishment, abrogation, annulment, canceling, cancellation, cessation, defeasance, deprivation, dissolution, invalidation, neutralization, nullification, rescission, revocation, undoing, vacation, vitiation
Associated concepts: vacating a judgment.)
2. In her supplemental brief, Ford expands her claim and asks this Court to intervene in a dispute over the scope of discovery that has not been resolved by the district court. This Court lacks jurisdiction over Ford’s supplemental claim because the claim is not ripe. Regardless, Ford waived the right to bring he supplemental claim by failing to raise the issue in her initial brief.
3. (Argument:) “Article III of the Constitution limits federal courts to the adjudication of actual, ongoing controversies between litigants…It is not enough that a controversy existed at the time the complaint was filed…” “An actual controversy must exist at all stages of review…”
4. “Ford represented victims in a civil action in Kentucky against several attorneys for breach of their fiduciary duty and fraudulent misrepresentations, and the district court appointed Ford to represent the victims in criminal proceedings against the attorneys (Note: Gallion, Cunningham, Mills)
During the course of the criminal proceedings, the district court ordered Ford to provide a “full and complete accounting” of all the funds, including the location of the funds, that she had collected in the state court action case that had not been distributed to the victims….The court also denied Ford’s subsequent motion to alter, amend or vacate the order. …Ford provided an accounting to the district court under seal, but she asked the court to stay the orders requiring an accounting and disclosure to the United States pending an appeal. Ford claimed that the disclosure of her accounting to the United States would “effectively” deny her the rights afforded by an appeal. The court granted Ford a sixty-day stay to seek relief in this Court, but the court denied Ford’s request to stay the disclosure of the accounting to the United States.
In her initial brief, Ford sought the vacatur of the district court’s orders requiring her to disclose her accounting to the United States.
In her supplemental brief, Ford expands her claim and asks this Court to intervene in a discovery dispute that has not been resolved by the district court.
This appeal should be dismissed for lack of a justiciable controversy. Ford’s appeal is moot because her accounting has been produced to the United States. Thus there is no case or controversy for this Court to review.
This Court lacks jurisdiction over Ford’s supplemental claim because the claim is not ripe. In her supplemental brief, Ford claims that the discovery dispute between the parties constitutes a “continuing controversy between (her) and the United States concerning the accounting.
She notes that “the United States has taken the position that the district court’s…orders require (her) to produce more information than what was contained in the sealed accounting and to provide updated information about her personal funds on an ongoing basis. And that “the orders on appeal continue to subject (her) to ongoing efforts by the Unites States to obtain records from her.”
Thus, Ford asks this Court not only to vacate the district court’s orders, but to order the United States to return or destroy the records that she has produced. Ford’s request attempts to bring life to matters that are not ripe for appellate review.”
5. (Discovery motions before district court) “The district court, which is the proper forum for adjudicating the parties’ discovery dispute, has not ruled on the issue.”
“The parties’ dispute over the scope of a discovery issue that the district court has not decided does not meet the fitness test.”
6. “Regardless, Ford waived the right to bring her supplemental claim by failing to raise the issue in her initial brief. See United States v. Johnson , 440 F.3d 832, (6th. Cirt. 2006) (appellant waives all issues not raised and argued in initial brief on appeal.
7. Regardless, Ford’s appeal should be dismissed for lack of jurisdiction.”

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