Justice Department Recovers Fraudulent Transfer of Proceeds Arising From Kickback Scheme

Carl “Casey” Estridge and Shannon Foster Estridge have agreed to pay $150,000 to resolve a civil lawsuit alleging that payments they received from an individual subsequently found liable for paying kickbacks violated the federal Debt Collection Procedures Act. Mr. and Mrs. Estridge had no involvement in the kickback violations. 

Floyd Calhoun Dent III and two other individuals were found liable by a South Carolina jury in 2018 for submitting false claims to Medicare and TRICARE, in violation of the Anti-Kickback Statute and the False Claims Act. A judgment was subsequently entered against these defendants jointly for $114 million. Prior to the judgment, but after Mr. Dent had been served with a Department of Health and Human Services Inspector General subpoena, Mr. Dent and his wife, Christina Marie Dent, transferred $175,500 in cash and gold coins to Mr. and Mrs. Estridge. Mr. Estridge was a long-time employee of corporations owned by Mr. and Mrs. Dent. The government alleged that the Dents received nothing in return for the transferred assets.

“Individuals may not receive and retain gifts that are the proceeds of fraudulent activity,” said Principal Deputy Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “Recovering ill-gotten gains that have been improperly transferred to third parties is an important component of the department’s commitment to combat fraud involving taxpayer funds.”

“This case demonstrates an important premise – fraudulently obtained money is not a gift,” said U.S. Attorney Adair Boroughs for the District of South Carolina. 

The settlement resolves the United States’ allegations that Mr. and Mrs. Dent’s transfers to Mr. and Mrs. Estridge were fraudulent transfers. The settlement requires the Estridges to surrender $150,000 to the Department of Justice and the Liquidating Trustee for now bankrupt Health Diagnostic Laboratories Inc., which will split these assets pursuant to a bankruptcy court agreement. 

The settlement was the result of a coordinated effort between the Civil Division’s Fraud and Corporate/Financial Litigation Sections, and the U.S. Attorney’s Office for the District of South Carolina. Senior Trial Counsel Alicia J. Bentley and Trial Attorney Andrew Warner of the Civil Division and Assistant U.S. Attorneys James Leventis, Johanna Valenzuela and Joanna Stroud handled the matter. 

The claims resolved by the settlement are allegations only and there has been no determination of liability.