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United States v. Feldman

United States District Court, W.D. New York

September 5, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
DORON FELDMAN, Defendant.

          DECISION AND ORDER

          HON. FRANK P. GERACI, JR. CHIEF JUDGE UNITED STATES DISTRICT COURT

         INTRODUCTION

         In these two related cases, Defendant Doron Feldman (“Feldman”) pleaded guilty to conspiring to commit mail fraud in violation of 18 U.S.C. § 1349 and filing a false tax return in violation of 26 U.S.C. § 7206(1).[1] Feldman was sentenced to 24 months imprisonment and, as relevant here, ordered to pay $1.46 million in restitution to the University of Rochester.

         Feldman and the government are now engaged in a dispute regarding the government's attempt to levy a retirement account held in Feldman's name with the Sentinel Benefits and Financial Group (the “Sentinel Account”). The government argues that it is entitled to levy the Sentinel Account to satisfy the restitution order. Feldman argues that the government may not access the Sentinel Account for two reasons: (1) seizing the Sentinel Account would violate promises the government made as part of the plea agreement in this case; and (2) the Sentinel Account is exempt from seizure pursuant to the Employees Retirement Income Security Act of 1974 (“ERISA”).

         In a previous decision, the Court rejected Feldman's first argument and reserved decision on the second to allow the parties to submit supplemental briefing. ECF No. 46. The parties have now filed their supplemental briefs. ECF Nos. 48, 49. In addition, Feldman has filed a motion for reconsideration in which he argues that the Court's prior decision was erroneous. ECF No. 50. For the reasons stated below, the Court reaffirms its prior decision and finds that the Sentinel Account is not exempt from the government's collection efforts.

         BACKGROUND

         On June 24, 2014, pursuant to a written plea agreement between Feldman and the government, Feldman pleaded guilty to conspiring to commit mail fraud in violation of 18 U.S.C. § 1349. See ECF No. 3.[2] The factual basis for that plea is set forth in the agreement. See Id. ¶ 4. For the fiscal years 2008 through 2010, Feldman, a medical doctor and board-certified anesthesiologist, participated in a scheme to defraud the Department of Anesthesiology at the University of Rochester by causing the department to pay fraudulent “option fees” to Feldman and his co-conspirators. Id. This scheme defrauded the University of Rochester out of $1.46 million, $630, 000 of which was received by Feldman himself. Id. ¶ 4f.

         The plea agreement includes separate sections regarding restitution and forfeiture. In the restitution section, the parties agreed that the Mandatory Victims Restitution Act of 1996 (“MVRA”), 18 U.S.C. § 3663A, required the Court to order Feldman to pay restitution in the amount of $1.46 million to the University of Rochester. Id. ¶ 19. Feldman also agreed “to disclose fully and completely all assets in which [he] either has any property interest or over which [he] exercises control, directly or indirectly, including those held by a spouse, nominee or other third party.” Id. ¶ 20.

         In the forfeiture section, Feldman agreed not to contest the government's seizure of three bank accounts totaling $992, 939.98.[3] Id. ¶¶ 27-30; see ECF No. 10. Most importantly, the forfeiture section also included the following language:

The defendant further agrees that the forfeiture of the aforementioned funds as authorized herein shall not be deemed an alteration of the defendant's sentence. Forfeiture of the defendant's property shall not be treated as satisfaction of any fine, restitution, cost of imprisonment, or any other penalty the Court may impose upon the defendant in addition to forfeiture. However it is understood by the defendant that the government may, in its discretion, recommend to the Attorney General that any of the forfeited proceeds be remitted or restored to eligible victims of the offense, pursuant to 18 U.S.C. § 981(e), 28 C.F.R. Pt. 9, and other applicable law, it being understood that the United [States] Attorney's Office has authority only to recommend such relief and that the final decision of whether to grant relief rests with the Department of Justice, which will make its decision in accordance with applicable law.

ECF No. 3 ¶ 31.

         The plea agreement concludes with a “merger” or “integration” clause that reads as follows:

This plea agreement represents the total agreement between the defendant, DORON FELDMAN, and the government. There are no promises made by anyone other than those contained in this agreement. This agreement supersedes any other prior agreements, written or oral, entered into between the government and the defendant.

Id. ¶ 33.

         The Court sentenced Feldman on February 18, 2015. See ECF Nos. 18, 20. Prior to sentencing, Feldman wrote a check to the University of Rochester for $467, 060.02-the difference between the $1.46 million restitution and the $992, 939.98 forfeiture-in anticipation that the forfeited funds would be applied towards restitution. At sentencing, the government commented on the restitution issue:

MR. RESNICK: The restitution of $1.46 million is to be ordered. The Government-I just wanted to clarify. The Government has seized approximately a million dollars, a little less than a million dollars of Dr. Feldman's assets when this case first started and when we were investigating it.
Mr. Feldman has recently paid the U of R about $467, 000. We anticipate applying the forfeited funds to the restitution amount, if we get approval from DOJ down in Washington.
But, technically, the restitution has not been paid yet in full. We're hoping that we can get that million dollars in seized funds, you know, applied towards the restitution amount, but we ...

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