3:24-cr-00113•USA v. Haney, et al
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IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TENNESSEE AT KNOXVILLE UNITED STATES OF AMERICA, ) ) Plaintiff, ) ) v. ) No. 3:24-CR-113-TAV-JEM ) TIFFANY HANEY, ANNE WARREN, and ) TINA ROPER, ) ) Defendants. ) REPORT AND RECOMMENDATION All pretrial motions are referred to the undersigned for disposition or recommendation as appropriate. See 28 U.S.C. § 636(b). This case is before the undersigned on Defendant Tiffany Haney’s Motion to Suppress [Doc. 89],1 which Defendants Anne Warren [Doc. 96] and Tina Roper [Doc. 138] seek to join, and on Defendant Tina Roper’s Motion to Suppress [Doc. 165], which Defendants Warren [Doc. 172] and Haney [Doc. 177] seek to join.2 The Second Superseding Indictment charges Defendants Haney, Warren, and Roper with conspiring to commit health care fraud from August 2018 to October 2024, by submitting claims for “medicines not dispensed pursuant to a valid prescription, as well as altered and forged prescriptions . . . for the purpose of executing a scheme and artifice to defraud health care benefit programs” to obtain “millions of dollars” in payments by false and fraudulent representations 1 Defendant Haney’s motion also includes her Motion for a Bill of Particulars [Doc. 89 pp. 4, 6, 27]. The Court has addressed this nondispositive motion separately [Doc. 202]. 2 Defendant Haney also filed a Second Motion to Suppress on July 21, 2025 [Doc. 185]. At the August 12, 2025 evidentiary hearing, the undersigned denied that motion as untimely [Doc. 195 pp. 14–16]. In the interest of justice, however, the undersigned stated that it would consider Defendant Haney’s arguments relating to data extracted from cell phones in conjunction with her motion [Doc. 177] to join Defendant Roper’s suppression motion [See Doc. 195 p. 15]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 1 of 91 PageID #: <pageID>
2 (Count One) [Doc. 127 pp. 1, 4–5]. Defendant Haney also faces charges for one count of making false statements relating to health care matters (Count Three) [id. at 10] and two counts of aggravated identity theft (Counts Five and Seven) [id. at 11]. Defendant Warren is likewise charged with two counts of making false statements relating to health care matters (Counts Two and Four) [id. at 10] and two counts of aggravated identity theft (Counts Six and Eight) [id. at 11]. Defendants Haney and Warren are charged with conspiring to commit money laundering from August 2018 through October 2024 (Count Nine) [id. at 12] and each are charged with two counts of money laundering (Counts Ten through Thirteen) [id. at 12–13]. These charges arise in part from the search of Rocky Hill Pharmacy (“RHP”)3 on April 16, 2024, pursuant to a search warrant. Defendants Haney and Warren, who are pharmacists, were the co-owners of RHP [Doc. 127 p. 2]. Defendant Roper, who is a pharmacy technician, worked at RHP [Id.]. During the execution of the search warrant at RHP, agents seized the Defendants’ personal cell phones and the personal cell phones of three other RHP employees [Doc. 185-3 pp. 2–8 (FBI Evidence Entry); Doc. 148-1 p. 2 (FBI Computer Analysis Response Team (“CART”) Report)]. Agents extracted data from the cell phones on the premises of RHP and returned the cell phones to their owners [Id. at 2; Doc. 195, Transcript, p. 35]. They also seized computer records and boxes of documents, including prescriptions, during the execution of the search warrant at RHP [Doc. 185-3 pp. 2–8; Doc. 148-1 p. 3; Doc. 195 pp. 38, 54]. On October 31, 2024, the Government seized bank accounts, investment accounts, vehicles, and personal watercraft from Defendants pursuant to seizure warrants [Doc. 119-2].4 3 Rocky Hill Pharmacy, LLC, was also a Defendant in this case, but the District Judge dismissed RHP from the case on the motion of the Government [Doc. 186]. 4 The seizure warrants in the case numbers listed on the cover sheet of the supporting affidavit are unsealed with redactions in each of those cases. The supporting affidavit of Agent Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 2 of 91 PageID #: <pageID>
3 Defendants seek suppression of all evidence seized during the April 16, 2024 search of RHP, arguing the search warrant affidavit contains false statements and material omissions without which the affidavit is bereft of probable cause [Doc. 89 pp. 4–5, 14–245]. Defendants also challenge the seizure of data from six personal cell phones during the execution of the search warrant at RHP, asserting that officers exceeded the scope of the search warrant in seizing this data and that the affidavit provides no basis for seizing the personal cell phones of the owners and employees [Doc. 165 p. 14; Doc. 195 pp. 73, 80, 97]. Defendants also summarily argue that paper and electronic records seized from RHP exceeded the scope of the search warrant [Doc. 195 pp. 80–81, 97]. Finally, Defendants challenge the seizure of and seek return of their assets, arguing that the affidavit in support of the seizure warrants contains false statements and material omissions necessary to probable cause [Doc. 89 pp. 24–27]. Defendants also argue that the affidavit supporting the seizure warrants does not provide probable cause to seize all assets purportedly flowing from five categories of claims or show that all seized assets are traceable to the alleged offenses [Id. at 5–6, 25–26]. After reviewing the evidence, the arguments of the parties, and the relevant law, the undersigned recommends that the District Judge permit Defendant Warren to join both suppression motions and permit Defendant Haney to join Defendant Roper’s suppression motion to the extent that each Defendant may challenge the seizure of data from her own cell phone. The undersigned recommends that the District Judge deny Defendant Roper’s motion to join in Defendant Haney’s suppression motion because she lacks standing to challenge the general search of RHP or the Emily Celeste is filed in the record in this case [Doc. 91 (sealed); Doc. 119-2 (redacted and unsealed)]. 5 The page numbers for Defendant Haney’s suppression motion begin after a title page and table of contents. The Court cites to the page numbers imposed by the Court’s electronic filing system, which begin with the title page as page 1, rather than to Defendant’s internal page numbers. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 3 of 91 PageID #: <pageID>
4 seizure of assets belonging to her codefendants. Accordingly, the undersigned recommends that the District Judge GRANT Defendant Warren’s [Docs. 96 & 172] and Defendant Haney’s [Doc. 177] motions to join and DENY Defendant Roper’s [Doc. 138] motion to join. The undersigned finds Defendants fail to make a sufficient preliminary showing to warrant a Franks hearing for either affidavit. The undersigned also finds that the affidavit in support of the search warrant for RHP fails to provide a nexus between the personal cell phones of RHP’s owners and employees and the alleged health care fraud. Nevertheless, suppression of the data extracted from the cell phones is not warranted because the agents acted in good faith reliance on the search warrant for RHP. Finally, the undersigned finds the affidavit in support of the seizure warrants provides probable cause to issue the seizure warrants and that Defendants may not seek the return of their seized assets at this juncture. Accordingly, the undersigned RECOMMENDS that the District Judge DENY both motions to suppress evidence [Docs. 89 & 165]. I. BACKGROUND AND EVIDENCE On October 16, 2024, the Grand Jury indicted Defendants Haney, Warren, and Rocky Hill Pharmacy, LLC, with conspiring to commit health care fraud from August 2018 to July 2024, by submitting altered and forged prescriptions to obtain $8,778,736 in payments from health care benefit programs by false and fraudulent representations (Count One) [Doc. 3 pp. 1, 4]. The Indictment also charged Defendant Haney with one count of making false statements relating to health care matters (Count Three) [id. at 8–9] and two counts of aggravated identity theft (Counts Five and Seven) [id. at 9–10]. Defendant Warren was likewise charged with two counts of making false statements relating to health care matters (Counts Two and Four) [id. at 8–9] and two counts of aggravated identity theft (Counts Six and Eight) [id. at 9–10]. Defendants Haney and Warren first appeared on November 1, 2024, and were arraigned on November 12, 2024. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 4 of 91 PageID #: <pageID>
5 On March 5, 2025, the Grand Jury returned a Superseding Indictment, extending the time frame of Count One, conspiracy to commit health care fraud, from August 2018 to October 2024 (rather than July 2024), and increasing the amount of money obtained by false pretenses in connection with the delivery of health care benefits to $14 million [Doc. 73 pp. 1, 4]. The Superseding Indictment also added five new charges: a money-laundering conspiracy from August 2018 through October 2024 against Defendants Haney and Warren (Count Nine) [id. at 11], two counts of money laundering against Defendant Haney (Counts Ten and Twelve) [id. at 11–12], and two counts of money laundering against Defendant Warren (Counts Eleven and Thirteen) [id.]. On March 20, 2025, Defendant Haney filed a notice of intent to pursue three pretrial motions under the Federal Rules of Criminal Procedure: (1) a motion to suppress pursuant to Rule 12, (2) a motion for return of property pursuant to Rule 41, and (3) a motion for a bill of particulars pursuant to Rule 7 [Doc. 82 p. 1]. Defendant simultaneously filed twenty-six sealed exhibits [Doc. 83, Exhs. 2–27, SEALED], and requested oral argument on her motions [Doc. 82 p. 1]. Pursuant to the Court’s Order [Doc. 86], Defendant Haney refiled her motions in compliance with Local Rule 7.1(b) on March 31, 2025 [Doc. 89]. Defendant Haney filed the three motions in a single document [id.],6 attached twelve unsealed exhibits [Doc. 89-1 to 89-12], and filed twelve proposed, sealed exhibits [Docs. 91-1 to 91-12].7 Defendants RHP [Doc. 94] and 6 This Report and Recommendation does not address Defendant Haney’s request for a bill of particulars [Doc. 89 pp. 27–28]. The Court has entered a separate Memorandum and Order addressing this motion [Doc. 202]. 7 The undersigned permitted the Defendant’s proposed, sealed exhibits [Docs. 91-1 to 91- 12] to remain under seal and granted the Government’s request to file redacted versions of the exhibits [Doc. 106 pp. 3–4]. The Government filed the redacted exhibits on May 7, 2025 [Docs. 119-1 to 119-14 (adding the affidavits of Agent Valero and Agent Celeste as redacted exhibits)]. The undersigned references the unredacted exhibits [Doc. 89-1 to 89-12] and the redacted exhibits [Docs. 119-1 to 119-14] herein. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 5 of 91 PageID #: <pageID>
6 Warren [Doc. 96] moved to join in Defendant Haney’s motions. Following the Government’s response [Doc. 111] and Defendant Haney’s reply [Doc. 115], the Court scheduled a motion hearing on Defendant Haney’s pending motions for May 29, 2025 [Doc. 122]. On May 21, 2025, the Grand Jury returned a Second Superseding Indictment adding Codefendant Tina Roper to the conspiracy to commit health care fraud in Count One and changing the amount of money obtained by false pretenses in connection with the delivery of health care benefits from $14 million to “millions of dollars” [Doc. 127 pp. 1, 4–5]. The Second Superseding Indictment added overt acts allegedly committed by Defendant Roper [id. ¶¶ 50–51] and added Defendant Roper to the forfeiture allegations [id. ¶¶ 70–74]. Defendant Roper had an initial appearance and arraignment on the following day [Doc. 130, Minutes], and on May 28, 2025, Defendant Roper moved to join in Defendant Haney’s motions to suppress and for a bill of particulars [Doc. 138]. On May 29, 2025, the Court heard argument on Defendant Haney’s pending motions to suppress and for a bill of particulars, and all codefendants’ requests to join [Doc. 144, Minutes].8 Assistant United States Attorneys Jeremy Dykes and Anne-Marie Svolto appeared on behalf of the Government. Attorneys Anthony Mahajan and Diana Yastrovskaya represented Defendant Haney. Attorney Aaron Wiley represented Defendant Warren, and Attorney Keith Stewart represented Defendant Roper. All three individual Defendants were also present. At the conclusion of the hearing, the Court permitted post-hearing briefing on Defendant Haney’s suppression motions and set a pretrial motion deadline for Defendant Roper. 8 At the May 29, 2025 motion hearing, the Court also arraigned Defendants Haney and RHP, which was represented by Attorney Robert Webster, on the Superseding Indictment and arraigned Defendants Haney, Warren, and RHP on the Second Superseding Indictment [Doc. 114, Minutes]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 6 of 91 PageID #: <pageID>
7 Defendant Haney filed a post-hearing brief in support of her suppression motions on June 3, 2025 [Doc. 148]. The Government responded in opposition on June 16, 2025 [Doc. 164]. On June 11, 2025, Defendant Roper filed a Supplemental Brief on Standing, arguing that she has standing to challenge the search of RHP because her personal cell phone was seized and searched pursuant to the search warrant for the pharmacy [Doc. 158]. The undersigned found Defendant Roper raised new bases for suppression of evidence in this supplemental brief and ordered that she raise any new suppression issues, not raised in Codefendant Haney’s suppression motion, in a separate motion [Doc. 163]. On June 19, 2025, Defendant Roper filed a Motion to Suppress all evidence seized during the search of RHP and from her personal cell phone and for the return of assets seized on October 31, 2024 [Doc. 165]. Defendants RHP [Doc. 166] and Warren [Doc. 172] joined in Defendant Roper’s new suppression motion. The Government responded in opposition to Defendant Roper’s suppression motion [Doc. 175]. Pursuant to the Court’s Order requesting clarification, Defendant Haney stated that she also joined in Defendant Roper’s new suppression motion [Doc. 177]. The Court set the motion and evidentiary hearing on Defendant Roper’s motions for the date of the pretrial conference, August 12, 2025, as no sooner time was available to all parties and the undersigned [Doc. 180]. On July 21, 2025, Defendant Haney filed a Second Motion to Suppress [Doc. 185], to which the Government objected as untimely [Doc. 189]. At the motion hearing, the Court found this motion to be untimely and further found that Defendant failed to state good cause for the late filing [Doc. 195, Transcript, pp. 14–16]. Nevertheless, the undersigned held that Defendant Haney Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 7 of 91 PageID #: <pageID>
8 could raise the arguments therein related to the seizure and search of cell phones as a part of joining Defendant Roper’s suppression motion [Id.].9 The parties appeared for a motion hearing on Defendant Roper’s motions on August 12, 2025 [Doc. 193, Minutes]. Assistant United States Attorneys Jeremy Dykes and Brian Samuelson appeared on behalf of the Government. Attorney Anthony Mahajan represented Defendant Haney. Attorney Aaron Wiley represented Defendant Warren. Attorney Keith Stewart represented Defendant Roper. All three Defendants were also present. Defendants Roper and Haney testified regarding the April 16, 2024 search of RHP and the seizure of their cell phones. The Government introduced Attachment B to the search warrant for the search of RHP. The parties presented argument on the suppression motion. At the end of the hearing, the Court permitted the parties to file post-hearing briefs by August 26, 2025, on any additional argument regarding the pending suppression issues. No additional briefing relating to the suppression motion was filed10 and the time for doing so has expired. The suppression issues are now ripe for adjudication. A. Agent Valero’s Affidavit Special Agent Joseph Valero of the Federal Bureau of Investigation (“FBI”) submitted a forty-page affidavit in support of a search warrant to search the premises of Rocky Hill Pharmacy in Knoxville, Tennessee, for records relating to health care fraud and conspiracy to commit 9 After the Court announced the ruling at the August 12, 2025 hearing, Defendant Haney argued that her initial suppression motion, while focusing on a Franks argument, actually alleges that the evidence seized pursuant to the search warrant for RHP is overbroad [Doc. 195 p. 18]. Defendant Haney argued that she “reserve[s] the right to submit additional briefing once the Court determines the preliminary question [of] whether [after] excising the false statements that [Defendant Haney] alleges and ha[s] proven in this record, there exists probable cause for seizure, and then the determination as to what was seized and is it consistent with that scope” [Id. at 18]. Defendant’s suggested serial approach to filing motions is not permitted by the Court’s schedule, nor is it compatible with her request for a speedy trial [See Doc. 199 pp. 1, 13 n.7]. 10 Defendant Roper filed a supplemental brief in support her Motion to Dismiss the Indictment, which the Court will address by separate report and recommendation. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 8 of 91 PageID #: <pageID>
9 healthcare fraud, false statements in relation to health care, conspiracy to pay and receive health care kickbacks, and violations of the Anti-Kickback Statute [Doc. 119-1 ¶ 4]. Agent Valero alleges that through a “multifaceted and complex” fraudulent scheme, RHP and its owners and employees [id. ¶¶ 4–5] “engaged in an unlawful scheme to alter, fabricate, and/or forge prescriptions for high- reimbursed compounded topical pain creams and gels, topical anti-itch creams, rectal kits, and muscle relaxers, resulting in substantial fraudulent billings submitted to, and payments received from, government and private insurance payors” [id. ¶ 5]. Also, he alleges that “RHP engaged in an unlawful scheme to waive patient co-pays in violation of the Anti-Kickback Statute” [Id. ¶ 6]. Agent Valero states that two pharmacists, Tiffany Haney and Anne Warren, own RHP, and that two of Haney’s sisters, Tina Roper and Tabitha Roper, work at RHP as pharmacy technicians [Id. ¶ 10]. RHP also employs Luther Little as a “pharmacy rep,” whose duties include “delivering pre-printed prescription pads to provider offices” [Id.]. Agent Valero states that from his experience in investigating healthcare fraud, the use of pre-printed prescription forms “are not common-place in legitimate medicine” [Id. ¶ 51]. He also states that RHP uses Pioneer RX as its provider for electronic health records [Id. ¶ 10]. Through Pioneer RX, RHP submits electronic claims for reimbursement for prescriptions to Pharmacy Benefit Managers (“PBMs”), such as Humana and OptumRx, and the PBM’s coordinate payments from government and private health benefit payors, such as Medicare Part D, Medicaid (also known as TennCare), and the Department of Labor’s (“DOL”) Energy Employees Occupational Illness Compensation Program (“EEOICP”) [Id.; see also id. ¶¶ 29, 36]. He states that some PBMs routinely audit pharmacies and ask the pharmacies to produce copies of prescriptions filled at the pharmacy to “detect and prevent waste, fraud, and abuse of PBM funds” [Id. ¶ 13]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 9 of 91 PageID #: <pageID>
10 The agent explains that pharmacists can prepare “compound drugs,” which require a prescription, by mixing drug ingredients to prepare a medication customized to a patient’s particular needs [Id. ¶ 14]. Agent Valero states based upon his experience in investigating healthcare fraud and pharmacies, “compounded creams are not always a first line choice for treatment, but rather are meant to be individualized to a particular patient” [Id.]. Thus, he observes it “can be unusual for providers to prescribe standardized compounded creams in abundance” [Id.]. Moreover, Agent Valero states that “when pharmacies make substitutions of ingredients in a compound outside of the doctor’s original prescription and without the doctor’s input or knowledge, it can expose a patient to potential harm or risk” [Id.]. Agent Valero also states that, based upon his training and experience, he knows that pharmacies can gain “a significant financial benefit by forging or altering prescriptions to substitute higher-cost drugs or to included unneeded/unwanted prescriptions or refills[, ]especially . . . for high-cost prescriptions like topical compound creams and Lidocaine-Hydrocortizone (HC) Rectal Kits” [Id. ¶ 46]. According to Agent Valero, RHP signed provider agreements with various Medicare Part D drug plans and PBMs “to dispense prescription[] drugs in accordance with federal and state rules and regulations” [Id. ¶ 22]. Medicare requires pharmacies to collect copayments from patients to ensure that the patient needs the medication, and the routine waiver of copayments “absent specific exceptions” is a felony [Id. ¶¶ 27–28]. RHP also signed a Pharmacy Network Agreement with TennCare, administered by OptumRx and other PBMs, agreeing to comply with all laws and regulations pertaining to the provision of prescription services [Id. ¶¶ 31–32]. Agent Valero states that in March 2021, state law enforcement officers along with Health and Human Services–Office of Inspector General (“HHS-OIG”) investigators [id. ¶ 3] began investigating RHP when they learned, following a routine audit by PBM OptumRx, that RHP was Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 10 of 91 PageID #: <pageID>
11 an outlier in claims submitted for Lidocaine-HC Rectal Kits [Id. ¶ 47]. The FBI joined the investigation in May 2021 [Id.]. He explains that as of April 2024, the investigation revealed that RHP and “individuals associated with RHP, have engaged in an unlawful scheme to alter, fabricate, and/or forge prescriptions for high-reimbursed topical pain creams, topical anti-itch creams, and muscle relaxers resulting in substantial fraudulent billings submitted to and payments received from Medicare Part D, TennCare, and [the DOL ]EEOICP” [Id. ¶ 48]. Agent Valero states that on February 20, 2024, agents interviewed Ashley Manning, a nurse practitioner (“NP”) who prescribed topical pain creams and whose prescriptions were submitted to RHP [Id. ¶ 49]. Agents showed NP Manning a prescription for a pain cream on RHP’s pre-printed form and bearing her signature [Id.]. A copy of the prescription is reproduced in the affidavit [Id.]. NP Manning agreed that she wrote the prescription and selected certain ingredients for the cream but stated that the prescription contains “add-on’s” and “substitutions” that she did not make and that are not in her handwriting [Id.]. NP Manning stated that her typical practice is to write a prescription for a pain cream on RHP’s pre-printed form and have her medical assistant fax it to RHP [Id. ¶ 50]. She did not recall ever receiving calls from RHP asking to modify prescriptions that she sent to RHP [Id.]. Agent Valero relates that OptumRx performed an audit on RHP regarding Medicaid or TennCare prescription claims between January 1 and May 29, 2020 [Id. ¶ 52]. OptumRx’s audit revealed that of 598 claims by RHP during that period, seven were for oral medications, 338 were for Lidocaine-HC rectal kits (representing $218,930.51 in paid claims), 249 were for Diclofenac 1% gel (representing $15,702.12 in paid claims), two for other compounds, and one for Lidocaine cream [Id.]. According to the affidavit, most Medicaid patients (52%) seeking compounded medications at RHP, filled prescriptions at other pharmacies [Id. ¶ 53]. OptumRx mailed surveys Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 11 of 91 PageID #: <pageID>
12 to prescribers to confirm whether the prescriber wrote the prescriptions filled at RHP [Id. ¶ 54]. Most of those prescribers who responded to the survey stated that they did not authorize a prescription for a Lidocaine-HC rectal kit [Id.]. Reproduced in the affidavit are survey forms from three providers—Courtney Travis, Lindsey Smith, and Courtney Carroll—all of whom denied prescribing Lidocaine-HC rectal kits, either to specific patients or, in the case of Courtney Carroll, at all [Id.]. According to the agent, on September 2, 2021, HHS–OIG investigators and state law enforcement officers interviewed Lindsay Smith, a nurse practitioner for whose pain cream prescriptions RHP submitted claims [Id. ¶ 55]. NP Smith denied prescribing any Lidocaine-HC rectal kits, Diclofenac gel, or Lidocaine to her patients [Id.]. She acknowledged that she may have prescribed a pain cream, but would not prescribe “a compound cream that needed another pain cream applied on top of that” [Id.]. Agent Valero states that Humana also audited RHP regarding claims for prescriptions that RHP submitted over the one-year period between July 22, 2019, and July 21, 2020 [Id. ¶ 56]. Humana’s summary relates that nearly 90% of RHP’s paid claims were for Diflorasone, amounting to $258,000 for 213 paid claims [Id.]. The affidavit relates that most prescribers responding to “prescribing verification forms” denied prescribing Diflorasone and Calciptriene creams [Id. ¶ 57]. Three prescribing verification forms from Nurse Practitioners Courtney Travis, Alicia Armstrong, and Felicia Bertram are reproduced in the affidavit [Id. ¶ 58]. All three deny prescribing Diflorasone ointment [Id.]. Nurse Practitioner Travis noted that the Diflorasone ointment and Calciptriene cream “are for psoriasis, and [she] d[id no]t treat that” [Id. ¶¶ 57–58]. Nurse Practitioner Armstrong stated that three of the claims were for patients she is no longer treating [Id. ¶¶ 57–58]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 12 of 91 PageID #: <pageID>
13 According to Agent Valero, a review of the files for two patients of Dr. Jack Scariano, which files were produced “in relation to another case and in response to compulsory service,” reveals that RHP submitted claims for prescriptions for these patients when the provider’s files do not contain “corresponding prescriptions or office visits for many of the pharmacy claims” [Id. ¶ 59]. The patient file for M.U. reveals that Dr. Scariano treated M.U. from February 28, 2018, through December 16, 2021, and notes a cancelled appointment on August 23, 2022, and that M.U. was a “no show” for an appointment on January 10, 2023 [Id. ¶ 60]. RHP submitted claims for six prescriptions for M.U. when the doctor’s file contained only two prescriptions, and three of RHP’s claims are for prescriptions and refills more than three months to more than a year after M.U.’s last attended appointment with Dr. Scariano [Id. ¶¶ 60–62]. FBI agents interviewed M.U. on January 23, 2024, and M.U. said Dr. Scariano prescribed a topical pain cream, but M.U. did not receive a paper prescription [Id. ¶ 65]. M.U. reported receiving two to three bottles of pain cream from RHP in the mail every thirty days through sometime in 2023 but not having an appointment with Dr. Scariano in two to three years [Id.]. Agent Valero states that the second patient file for patient R.D. reveals that Dr. Scariano treated R.D. from October 25, 2021, through May 16, 2022, and notes a canceled appointment on November 14, 2022 [Id. ¶ 66]. The file also contains one signed “RHP prescription sheet” authorizing six refills and dated October 25, 2021 [Id. ¶ 67]. He states RHP submitted claims to the DOL EEOICP for three prescriptions, each with refills, listing Dr. Scariano as the prescriber, for patient R.D., on October 25, 2021; April 25, 2022; and August 18, 2022 [Id. ¶ 68]. Agent Valero states that a review of RHP’s claims on the Pioneer RX software, shows that from November 2017 to December 2023, RHP billed 99% of its claims for a topical pain cream containing ketoprofen, amitriptyline, and diclofenac to Medicare through the PBM Secure Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 13 of 91 PageID #: <pageID>
14 Horizons and was reimbursed $5.2 million, which is an average of $1,500 per claim [Id. ¶¶ 70– 71]. In contrast, RHP sought payment for this same pain cream from other payors forty-two times during that same time frame and received $4,600 in reimbursement [Id. ¶ 71]. Agent Valero states that a claims analysis of RHP’s TennCare/Medicaid claims shows that from April 2019 to March 2020, 98% of RHP’s claims for Lidocaine-HC rectal kits were to a Medicaid plan [Id. ¶ 72]. According to Agent Valero, when Medicaid began to reject claims for the rectal kits, RHP switched to billing for Diclofenac Sodium 1% gel, which continued through mid-July 2021 [Id.]. According to Agent Valero, HHS-OIG investigators and state law enforcement officers interviewed former RHP pharmacy technician Sydney Goodson on September 2, 2021 [Id. ¶ 73]. Ms. Goodson testified that Tiffany Haney, Anne Warren, and Tina Roper were “masterminds” at submitting “test claims” to payors to see how much the payor would reimburse the pharmacy for various ingredients to insure that RHP received the maximum reimbursement for prescriptions [Id. ¶¶ 73–74]. Ms. Goodson stated that Luther Little, RHP’s sales representative, visited doctor’s offices to pass out prescription pads containing five different formulas for pain creams, gels, or kits [Id. ¶ 75]. She said that the provider would check the box for the formula that was the best fit for the patient and then send the prescription to RHP by fax [Id.]. According to Ms. Goodson, Little would arrange lunch meetings with doctors in Knoxville to talk about “pain contracts” and the services available from RHP [Id.]. She stated that “the doctors were on board with the pain contracts no matter what prescription was written to the patient” [Id.]. She said even if the doctor only told the patient to take Ibuprofen, the doctor still prescribed a pain cream [Id.]. Regarding the pain contracts and the pre-printed RHP prescription forms, Ms. Goodson stated that even patients who filled prescriptions at other pharmacies filled their pain cream prescriptions at RHP [Id. ¶ 76]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 14 of 91 PageID #: <pageID>
15 The affidavit relates that Ms. Goodson opined that RHP pharmacists were living more expensive lifestyles than a typical pharmacist [Id. ¶ 77]. Agent Valero stated that agents learned that between December 2022 and October 2023, Haney chartered private jets for family trips to Florida, Ohio, and South Carolina. Agents also learned that both Haney and Warren purchased “luxury lake houses” [Id.]. Agent Valero states that Ms. Goodson told agents that Tina Roper called patients to check on whether they wanted a refill of their prescription, and if the patient did not answer the call, Roper placed the patient on automatic refills for pain creams [Id. ¶ 78]. Agent Valero stated that patients told agents that they received numerous unwanted pain cream refills by mail [Id. ¶ 79]. Agent Valero also states that RHP’s website permits providers to book “lunch and learn” meetings at which RHP will cater a meal at the provider’s office [Id. ¶ 80]. During these meetings, RHP states it will explain the services it provides and how RHP and the provider can work together to benefit the patients and providers [Id.]. Agent Valero states that on February 2, 2024, HHS-OIG investigators and state law enforcement officers interviewed G.T., a patient of Dr. Scariano [Id. ¶ 82]. G.T. stated that he told Dr. Scariano he did not want to receive pain cream by mail anymore, and he stopped receiving it [Id. ¶ 80]. G.T. said despite this, he continued regularly to receive text messages about refills from RHP for several years [Id.]. G.T. reported that he responded to the messages that he did not want a refill [Id.]. Agent Valero relates that on the day of the interview, G.T. received a text message from RHP asking if he wanted a refill on a 2020 prescription for Gabapentin pain cream [Id. ¶ 83]. G.T. said he received this refill message from RHP monthly for several years [Id.]. G.T. gave the agents a screenshot of this text message, which is reproduced in the affidavit [Id. ¶ 84]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 15 of 91 PageID #: <pageID>
16 According to Agent Valero, Medicare generally requires copayments (“copays”) from its patients and requires pharmacies to collect these copayments [Id. ¶ 85]. He states that between August 27, 2019, and December 29, 2023, RHP did not collect a copay on 2,191 of 3,533 claims for a specific pain cream. During this time, Medicare, through PBM Secure Horizons, paid RHP $3,274,400.34 for the 2,191 claims on which RHP collected no copay [Id. ¶ 87]. He gives two examples of patients who told agents that RHP did not collect copays from them [Id. ¶ 88]. Agent Valero states that on December 6, 2023, investigating agents received a suspicious activity report from Truist Bank regarding RHP owners Tiffany Haney and Anne Warren [Id. ¶ 89]. The bank identified large transfers for “management fees” and unusual activity between RHP’s account and Haney’s and Warren’s accounts at other financial institutions [Id.]. The bank stated that these types of transfers by a pharmacy are “highly unusual, indicative of fraud,” and could cause the bank to close the account [Id.]. Agent Valero states that he was seeking to seize records from the premises of RHP whether in paper format or on computers or other electronic storage media [Id. ¶ 90]. He states that where possible, agents will copy data, rather than seizing the digital devices to avoid disrupting the business [Id. ¶¶ 91, 94]. According to Agent Valero and based upon his review of other evidence related to this investigation, he knows that computers were used “to generate, store, and print documents used in the health care fraud scheme” [Id. ¶ 92(e)]. He asks to seize and copy “storage media that reasonably appear to contain some or all of the evidence described in the warrant” and asks that the warrant “authorize a later review of the media or information” [Id. ¶ 95]. Based upon Agent Valero’s affidavit, United States Magistrate Judge Debra Poplin issued a search warrant for RHP on April 12, 2024 [See Doc. 119-1 (search warrant affidavit and Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 16 of 91 PageID #: <pageID>
17 attachments)].11 Agents searched RHP on April 16, 2024, and seized prescriptions, paper records and notebooks, computer data, and copies of data extracted from the cell phones of both owners and four employees present at the time of the search [Doc. 185-3 pp. 2–8 (FBI Evidence Entry); Doc. 148-1 p. 2; see also Doc. 151, Transcript of May 29, 2025 hearing, p. 28]. B. Agent Celeste’s Affidavit FBI Special Agent Emily Celeste submitted a one-hundred-forty-one-page affidavit in support of nineteen seizure warrants to seize bank accounts, investment accounts, vehicles, and watercraft, “which contain funds that consist of proceeds from health care fraud offenses or are traceable to such proceeds[,]” from Tiffany Haney and Anne Warren, the owners of RHP, who are under investigation for healthcare fraud [Doc. 119-2 ¶¶ 2, 4].12 RHP is a “full-service pharmacy that can fill any prescription and also offers custom pharmaceutical compounding” [Id. ¶ 34]. Agent Celeste alleges that probable cause exists to believe “that funds in each of the Subject Bank and Investment accounts . . . were derived from proceeds traceable to violations of specific unlawful activities as defined in 18 U.S.C. §[]1956(c)(7)(F), specifically conspiracy to commit health care fraud under 18 U.S.C. § 1349,” and, thus, “the traceable portions of the funds in” 11 The returned search warrant for the search of RHP remains sealed in case number 3:24-MJ-1095. In that case, United States Magistrate Judge Debra C. Poplin granted the Government’s motion for a limited unsealing of the supporting affidavit and attachments, which were provided to defense counsel. A sealed [Doc. 89-1] and a redacted [Doc. 119-1] version of the affidavit and attachments are filed in this case. 12 Defendant Haney filed an unredacted, sealed version of Agent Celeste’s affidavit as an exhibit to her suppression motion [Doc. 91, SEALED]. The Government subsequently filed a redacted version of the Affidavit [Doc. 119-2]. Upon review by the Court, the redacted version of the affidavit contains numerous missing pages and is seventy pages shorter than the unredacted affidavit. Accordingly, the Court cites to the affidavit (guided by the paragraph numbering in the unredacted affidavit) but has ordered the Government to replace the redacted affidavit [Doc. 119-2] with a complete redacted version [Doc. 201]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 17 of 91 PageID #: <pageID>
18 Haney’s and Warren’s bank accounts, investment accounts, vehicles, and real properties13 are subject to seizure and forfeiture [Doc. 119-2 ¶ 5]. Agent Celeste also alleges probable cause exists to believe that “the entirety of the Subject Bank Accounts, Subject Investment Accounts, Subject Vehicles and Real Property are involved in [and forfeitable as a result of ]money laundering activity” [id. ¶ 7] and implicate the Spending Statute, 18 U.S.C. § 1957 [id. ¶ 6]. Agent Celeste alleges that the investigation provides probable cause to believe Defendants Haney and Warren and others conspired “to create and submit for reimbursement to health care benefit programs altered and forged prescriptions for pharmaceutical drugs, including pain creams, . . . for the purpose of executing a scheme and artifice to defraud health care benefit programs, and to obtain by means of false and fraudulent pretenses, representations, and promises, at least $32,925,969 owned by or under the control of health care benefit programs” [Id. ¶ 8]. Agent Celeste states that insurance companies paid RHP a total of $32,925,969 for engaging in five schemes: (1) a fraudulent rectal cream scheme ($972,060), (2) false billing for family and friends ($722,198), (3) false billing for altered and forged prescriptions for a compound cream (“Keto10/Amit2/Diclo1”) known as “Option 2” or “Option 3” ($5,097,670), (4) false billing for altered and forged prescriptions for steroid “[a]dd-ons” ($3,233,728), and (5) a DOL EEOIC scheme ($22,900,313) [Id. ¶¶ 9–10]. Agent Celeste states that based upon claims in Pioneer RX, financial records, records seized from RHP in April 2024, and witness interviews, payments from PMBs into RHP’s operating accounts occurred from September 2018 through July 2024 [Id. ¶16]. 13 Although discussed in the affidavit, Defendants’ real properties were not seized pursuant to seizure warrants [See Doc. 119-2 ¶ 33]. Instead, the Government filed a Bill of Particulars for Forfeiture of Property on November 8, 2024, listing six real properties of Defendants Haney and Warren, Defendant Tina Roper, and RHP employee Tabitha Roper [Doc. 18 pp. 3–6]. That same day, the Government also filed five Notices of Lis Pendens for five of the properties [Docs. 19– 23]. On November 11, 2024, it filed a Notice of Lis Pendens for the sixth property [Doc. 27]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 18 of 91 PageID #: <pageID>
19 Agent Celeste states that between August 10, 2018, and September 30, 2024, PMBs, acting on behalf of insurance companies, deposited $3,432,070 into RHP’s operating account FCP 2730 and $30,569,501 into RHP’s operating account Truist 5152, for a total of $34,001,571 paid to RHP’s two main operating accounts by PMBs [Id. ¶¶ 14, 20(a)–(b)].14 Of this total, $32,925,969 was paid to RHP from the PMBs for the five schemes [Id. ¶ 15]. From RHP’s operating accounts, Defendants Haney and Warren paid themselves and then purchased property and created investment accounts using the money paid to them from the five schemes [Id. ¶ 17]. Between August 2018 and October 2, 2024, Defendant Warren paid herself $10,606,585 from the RHP operating accounts to her personal bank accounts (primarily into her account for Warren Management, LLC, in the form of “management fees” [id. ¶ 23]), and Defendant Haney paid herself $10,518,562 from the RHP operating accounts to her personal banking accounts (primarily into her account for Haney Consulting, LLC, in the form of “management fees” [id. ¶ 22]) [Id. ¶ 18]. These payments amounted to 54% of RHP’s gross revenue [Id.]. According to Agent Celeste, funds from the five health care fraud schemes were paid to the two RHP operating accounts and, from there, Defendants Haney and Warren paid the funds into their personal bank accounts [Id. ¶ 20]. She alleges that Defendants Haney and Warren then used the funds from the fraudulent schemes, now located in their personal bank accounts, to purchase property, to make loan payments on existing property, and to fund investment accounts [Id.]. Agent Celeste states that the Government seeks seizure warrants for all funds from eight bank accounts of Defendant Warren [id. ¶ 28(i)–(viii)]; all funds from three bank accounts for Defendant Haney [id. ¶ 29(i)–(iii)]; all funds from two investment accounts belonging to 14 Payments from patients and “pharmaceutical rebates” comprised another $5,350,204 deposited into RHP’s two main operating accounts [Doc. 119-2 ¶ 15]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 19 of 91 PageID #: <pageID>
20 Defendant Warren [id. ¶30(i)–(ii)]; all funds from two investment accounts belonging to Defendant Haney [id. ¶30(iii)–(iv)]; two vehicles (a Denali and an Escalade) titled to Haney Consulting, LLC, [id. ¶ 31(i)–(ii)]; one boat in the name of Vanden Warren [id. ¶ 31(iii)]; and one pontoon boat in the name of Defendant Haney [id. ¶ 31(iv)]. Based upon information from her investigation and set out in the affidavit, Agent Celeste alleges that probable cause exists to believe the nineteen listed bank accounts, investment accounts, vehicles, and watercraft “are property or are property traceable to property (or funds) that constitutes proceeds resulting from health care fraud offenses” and are thus subject to civil and criminal forfeiture and also subject to forfeiture as property involved in money laundering offenses [Id. ¶¶ 32–33]. 1. Rectal Kit Scheme Agent Celeste relates that in May 2021, the FBI, Tennessee Bureau of Investigation (“TBI”), and HHS-OIG investigators began an investigation of RHP based upon an investigation by TennCare’s Officer of Program Integrity (“OPI”) that concluded in February 2021 and which was based on the OptumRx audit of RHP [Id. ¶ 36]. According to Agent Celeste, the OptumRx audit identified RHP as an outlier in billing for certain medications [Id.]. She states that the OPI investigation focused on prescriptions for Diclofenac gel 1%, Lidocaine-HC rectal kits 3–.05%, and Lidocaine rectal kits 3–1% [Id. ¶ 38]. Agent Celeste relates that OptumRx reviewed a sample of medical and pharmacy records and interviewed prescribers [Id. ¶ 39]. She asserts that seven prescribers, both in interviews and written verification forms, denied prescribing the medications dispensed by RHP [Id. ¶ 40]. Agent Celeste further states that in addition to OptumRx’s findings, OPI found that RHP lacked documentation for its claims and had discrepancies in its prescription origin codes (“POCs”), which show whether the pharmacy received the prescription by phone or fax [Id. ¶ 40]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 20 of 91 PageID #: <pageID>
21 According to Agent Celeste, agents searched RHP in April 2024 and seized prescriptions related to the OptumRx audit and RHP’s claims data through July 2024 from RHP’s Pioneer RX system [Id. ¶ 40]. She states that the data from Pioneer RX revealed that RHP billed TennCare for rectal kits under the names of forty-eight prescribers and was reimbursed $972,060 [Id. ¶ 44]. The agent says that financial records show the payments from TennCare were deposited into RHP’s operating accounts [Id. ¶ 45]. Agent Celeste relates that TBI and HHS-OIG investigators interviewed about one-half of the forty-eight prescribers, and none had prescribed a kit to treat the patient’s rectal area [Id. ¶ 46]. She states that FBI and TBI agents interviewed prescriber C.T., whose prescriptions were associated with the most paid claims for rectal kits by RHP [Id. ¶ 47]. According to Agent Celeste, C.T. denied ever prescribing rectal kits to her patients [Id. ¶ 48]. Agent Celeste states that when patients told C.T. that they were receiving eight to ten creams for rectal use, C.T. told the patients to tell RHP they no longer wanted refills of the creams [Id.]. Agent Celeste states that during the search of RHP, agents interviewed RHP pharmacy technician Tina Roper, who stated that TennCare sent RHP a list of national drug codes for the drugs covered by TennCare [Id. ¶ 49]. Agent Celeste said, based upon her training and experience, that Lidocaine, which RHP commonly used “as a secondary cream,” can be purchased as an over- the-counter cream and, thus, would not be covered by TennCare [Id. ¶¶ 50–51]. Agent Celeste states that submitting a claim for the kits was the only way to get TennCare to cover the Lidocaine cream because TennCare covered the rectal kits [Id. ¶ 51]. According to Agent Celeste, Defendant Roper said she explained to the providers that they needed to prescribe the rectal kits so the cream would be covered [Id. ¶ 53]. Agent Celeste further states that between September 2018 and March 2020, TennCare paid RHP $972,060 for rectal kits, which payments were deposited into the RHP operating accounts [Id. ¶ 54]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 21 of 91 PageID #: <pageID>
22 2. Prescriptions for Family and Friends According to Agent Celeste, shortly after opening, RHP began filling prescriptions for medications with high reimbursement rates for the owners, the owner’s spouses, two pharmacy technicians, one technician’s husband, a former RHP pharmacist, and the former pharmacist’s child [Id. ¶ 56]. Agent Celeste states that from August 23, 2018, through July 25, 2024, insurance companies paid RHP’s operating accounts $722,198.64 for these prescriptions [Id.]. Agent Celeste further states that provider J.C. told investigators that she “authorized only one formulary prescription” for J.H., but records show that RHP submitted claims for eighteen medications prescribed by J.C. for J.H. [Id. ¶ 60]. Agent Celeste relates that provider J.C. also denied authorizing any prescriptions for T.H., but RHP submitted claims for seventeen medications prescribed by J.C. for T.H. [Id. ¶ 61]. The combined prescriptions for J.H. and T.H. resulted in a total reimbursement of $169,113 into RHP’s operating accounts [Id. at 59]. Agent Celeste stated the FBI interviewed provider J.C. on June 27, 2024, and J.C. reported meeting T.H. once and treating J.H. once or twice, when she might have prescribed a pain cream J.H. requested [Id. ¶¶ 62–63]. Agent Celeste states that provider J.C. provided medical records showing that J.C. treated J.H. on March 3, 2018, and referred J.H. for an injection for pain on May 9, 2019 [Id. ¶ 64]. According to Agent Celeste, the medical records show that J.C. wrote a formulary prescription for J.H. on RHP’s form on May 28, 2019 [Id. ¶ 65]. The agent states that this prescription was seized during the search of RHP, and the copy of the prescription seized from RHP shows that Fluocinonide cream and Lidocaine/Tetracine were added to it [Id. ¶ 66]. She relates that agents also seized three additional prescriptions by J.C. for J.H. that J.C. denied writing [Id. ¶¶ 68–71]. Agent Celeste states that J.C.’s medical records reflect that T.H. had one appointment with J.C. on Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 22 of 91 PageID #: <pageID>
23 April 17, 2018, but J.C. did not prescribe any medication for T.H. [Id. ¶ 72]. According to Agent Celeste, the search of RHP revealed five prescriptions for T.H. prescribed by J.C., which J.C. denied authorizing [Id. ¶¶ 73–74]. Agent Celeste states that claims data from Pioneer RX showed that between January 21, 2019, and August 9, 2021, RHP’s operating accounts were reimbursed $130,340 for prescriptions from provider D.E. for seventeen medications for T.H. and sixteen medications for T.R. [Id. ¶¶ 76–78]. Agent Celeste states that the FBI interviewed D.E. on July 2, 2024, and D.E. told the agents that he did not think he prescribed the medications for which T.H. received prescriptions or, if he did, he would have done so only if T.H. requested them by name [Id. ¶ 79]. Agent Celeste says D.E. recalled T.H. requesting and him prescribing two highly reimbursed medications that he had never prescribed before [Id. ¶¶ 80–81]. She states that D.E. also denied prescribing two medications for T.R. on January 2, 2020 [Id. ¶ 82]. According to Agent Celeste, data from Pioneer RX shows that between August 24, 2018, and January 18, 2023, insurance companies reimbursed RHP for prescriptions by provider M.M. for T.H., J.H., T.R., J.P., A.W., and V.W. in the total amount of $138,867.34, which was deposited into RHP’s operating accounts [Id. ¶ 83]. The FBI interviewed M.M. on June 27, 2024, and M.M., a neighbor of Defendant Warren, denied ever treating any of the individuals and only twice calling in a prescription to RHP [Id. ¶¶ 84–85, 87]. Agent Celeste stated text messages between Defendant Warren and a former RHP pharmacist show Warren instructing the pharmacist “not to write any scripts under” M.M.’s name because M.M. did not “authoriz[e] blanket script writing,” and Defendant Warren did not want to get her neighbor into trouble [Id. ¶ 89]. Agent Celeste further states that RHP was paid $119,236 into its operating accounts for nine prescriptions by provider K.T. for J.H. between January 11, 2019, and December 29, 2023 Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 23 of 91 PageID #: <pageID>
24 [Id. ¶¶ 90–91]. She says FBI agents and HHS-OIG investigators interviewed K.T. on June 27, 2024, and K.T. denied that J.H. had appointments with K.T. between December 13, 2018, and September 11, 2019, and also denied knowing the purpose of the six medications resulting in claims by RHP during that time [Id. ¶ 92]. Agent Celeste stated that RHP was reimbursed $50,792 for prescriptions from provider A.S. for T.H. between April 18, 2018, and March 5, 2019 [Id. ¶ 97]. According to Agent Celeste, an interview of A.S. revealed that T.H. had one appointment with A.S. on April 18, 2018, at which A.S. prescribed two medications for T.H. [Id. ¶ 99]. Agent Celeste states that RHP was paid for prescriptions for five other medications for T.H. prescribed by provider A.S., including fifteen prescriptions for Fenoprophen for which RHP was reimbursed $3,245 each [Id. ¶ 100]. Agent Celeste states that similarly, insurers reimbursed RHP $30,460 for prescriptions by provider A.D. for twenty-four prescriptions for T.C. between June 24, 2021, and May 3, 2024 [Id. ¶¶ 101–102]. Agent Celeste relates that the FBI interviewed A.D. on August 29, 2024 [Id. ¶ 103]. According to Agent Celeste, A.D. said she and T.C. worked together at Walgreen’s Pharmacy fifteen years ago [Id.]. The agent says A.D. reported calling in a single prescription to RHP for T.C. on June 24, 2021, for two medications A.D. did not typically prescribe [Id.]. Agent Celeste states that A.D. did not recall writing the other prescriptions, including a prescription for T.C.’s child, and A.D. stated that she typically writes e-scripts and the prescriptions shown to her by investigators were handwritten and some misspelled A.D.’s name [Id. ¶¶ 103–04]. 3. Prescription Formularies Agent Celeste states that between August 2018 and July 2024, Defendants Haney and Warren distributed a prescription formulary listing compounded and other pain creams to medical practices in East Tennessee [Id. ¶ 106]. She relates that representatives from RHP brought lunch Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 24 of 91 PageID #: <pageID>
25 to the providers and gave them the formulary pads [Id. ¶ 110]. She also states that the formulary contained options for compounded medications and “add-ons/substitutions” [Id. ¶ 107]. Agent Celste states that the FBI seized all formularies it could locate from RHP during the execution of a search warrant [Id. ¶ 108]. According to Agent Celeste, the formulary prescriptions seized from RHP had “original pen marks on faxed formularies indicating the potential that additions were being made to the prescriptions at the pharmacy after they were faxed from the medical clinics” [Id. ¶ 109]. Agent Celeste also states that “formularies and refill requests that were signed in the name of medical providers but had no fax markings, indicat[e] the potential that” RHP employees forged the provider’s names at RHP [Id.]. According to Agent Celeste, during the search of RHP, agents seized prescriptions written on a prescription pad located at the pharmacy on which the provider’s name was added [Id. ¶¶ 71, 109]. Agent Celeste stated that after the search of RHP, agents and investigators from the FBI, TBI, and HHS-OIG interviewed nearly sixty providers who prescribed medications on the formulary prescription forms seized from RHP, showing the providers copies of the prescriptions [Id. ¶ 110]. Agent Celeste stated the providers identified three problems: (1) the providers nearly always chose Option 1 on the formulary, but another option was filled instead [id. ¶¶ 111–17]; (2) add-ons or steroids were added to the compounds the provider prescribed [id. ¶¶ 111, 119–30];15 and (3) prescriptions existed that the provider did not write [Id. ¶ 111, 131–76].16 The 15 Like Agent Valero’s affidavit, Agent Celeste’s affidavit also describes the 2020 Humana audit and states that three providers denied prescribing a compound that added Diflorasone and/or Calcipotriene [Doc. 119-2 ¶¶ 123–24]. Agent Celeste’s affidavit states that RHP “was able to mitigate with two of the prescriber denials, but provider C.T. denied four claims for Diflorasone and three claims for Calciprotriene” [Id. ¶ 124]. 16 This category includes the missing prescriptions from Dr. Scariano’s file for patients M.U. and R.D. [Doc. 119-2 ¶¶ 145–51], which were also discussed in Agent Valero’s affidavit. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 25 of 91 PageID #: <pageID>
26 affidavit reproduces numerous prescriptions that Agent Celeste states were altered or forged in these ways [Id. ¶¶ 117, 122, 159–60, 171, 173]. Agent Celeste relates that according to data from Pioneer RX, between August 26, 2019, and November 7, 2024, RHP submitted claims for the formularies with altered options and the insurers paid $5,097,670, which was deposited into RHP’s operating accounts [Id. ¶ 118]. She states that Pioneer RX data also shows that between August 15, 2018, and August 1, 2024, payors paid $3,233,728 to RHP for “add-ons” to prescriptions, which funds were deposited into RHP’s operating accounts [Id. ¶ 130]. Agent Celeste states that between August 2019 and July 30, 2024, the DOL EEOIC benefit plan paid RHP $22,900, 313 from prescriptions attributed to Dr. Jack Scariano and a provider at his office M.F., which funds were deposited into RHP’s Truist 5152 operating account [Id. ¶ 176]. Agent Celeste summarizes the losses from the five schemes. She states that between September 2018 and March 2020, TennCare paid RHP approximately $972,060 for the rectal kits [Id. ¶ 177]. Between September 2018 and July 2024, health benefit plans paid RHP $722,198 for prescriptions for RHP’s owners and employees and their family members [Id. ¶ 178]. From August 2018 to July 2024, PMB Secure Horizons17 paid RHP $5,097,670 for prescriptions written for Option 1 but filled for Options 2 or 3 on the formulary [Id. ¶ 179]. From August 2018 to July 2024, health benefit plans paid RHP $3,233,728 for steroid add-ons to the formularies [Id. ¶ 180]. Between August 2019 and July 2024, DOL EEOIC paid RHP $22,900,313, into Truist account 5155, for prescriptions written in the names of Dr. Scariano and provider M.F. in his office [Id. ¶ 181].18 According to Agent Celeste, the total paid to RHP for the five schemes is $32,925,969 17 Agent Celeste states Secure Horizons paid 99% of these claims [Doc. 119-2 ¶ 179]. 18 Agent Celeste states that law enforcement continues to investigate the prescriptions filled in Dr. Scariano’s and M.F.’s names [Id. ¶ 181]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 26 of 91 PageID #: <pageID>
27 and probable cause exists to believe that this amount is based on fraudulent prescriptions submitted by RHP [Id. ¶ 182]. 4. Tracing Proceeds The remainder of Agent Celeste’s affidavit documents that funds from RHP’s two primary operating accounts were deposited into eight of Defendant Warren’s bank accounts and three of Defendant Haney’s bank accounts and from there used by Defendants to pay for or make payments toward real property and improvements thereto,19 investment accounts, vehicles, and watercraft [Id.¶¶ 183–84, 192–95, 197–214 (Haney properties, investment accounts, vehicles, and pontoon boat), & 215–22 (Warren properties, investment accounts, and boat)]. Agent Celeste states that based upon the information provided in support of the five schemes, probable cause exists to find that funds from the schemes are proceeds of healthcare fraud and that Defendants Haney and Warren “knew those proceeds were criminally derived” [Id. ¶ 185]. Agent Celeste avers that Defendants Haney and Warren conducted financial transactions, in amounts exceeding $10,000, with funds that they knew were the proceeds of healthcare fraud “for the purpose of concealing the nature, source, location, ownership, or control of those proceeds, in violation of 18 U.S.C. § 1957” [Id. ¶¶ 186–187]. Agent Celeste provides charts identifying example transactions from the enumerated bank accounts of Defendants Warren and Haney, which Agent Celeste states show how “each identified account and forfeitable asset was involved in money laundering transactions in violation of 18 U.S.C. § 1957” [Id. ¶ 189]. Agent Celeste states that probable cause exists to believe the eight bank accounts of Defendant Warren and the three bank accounts of Defendant Haney contain proceeds of the target 19 Agent Celeste states that the Government is not seeking seizure warrants for real property but will file a bill of particulars including the real properties and will also file lis pendens on the real properties, which are subject to forfeiture [Doc. 119-2 ¶ 187]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 27 of 91 PageID #: <pageID>
28 offenses and that these bank accounts along with Defendant Haney’s and Warren’s investment accounts and vehicles were involved in money laundering transactions [Id. ¶ 223]. According to Agent Celeste, on October 16, 2024, the Grand Jury indicted Defendants Haney and Warren for conspiracy to commit health care fraud, false statements relating to health care matters, aggravated identity theft [Id.]. She states that the indictment includes general forfeiture allegations seeking forfeiture of the proceeds of the charged offenses [Id.].20 According to Agent Celeste, the Government seeks seizure warrants for seizure of the enumerated bank accounts and investment accounts, “which contain funds constituting . . . traceable proceeds of a conspiracy to commit health care fraud” [Id. ¶ 227]. She states the Government also seeks seizure of the subject vehicles and watercraft and all funds in the subject bank accounts and investment accounts as the “‘involved in property’ or money laundering transactions in violation of 18 U.S.C. § 1957” [Id.].21 C. Testimony from the August 12, 2025 Motion Hearing Roper Testimony. At the August 12, 2025 evidentiary hearing, Defendant Tina Marie Roper acknowledged that she understood her right not to testify and agreed that she was choosing to testify with full knowledge of her rights and at the advice of counsel [Doc. 195, Transcript, p. 22]. Defendant Roper testified that she previously worked at RHP as a pharmacy technician and pharmacy educator [Id. at 22–23]. She stated that her role as a pharmacy educator involved speaking at luncheons at doctor’s offices on the compounds available from RHP and the benefits of those compounds for their patients [Id. at 23]. Defendant Roper stated that RHP was a “full 20 Agent Celeste states that the Government intends to file a bill of particulars specifically listing the real property, accounts, and vehicles subject to forfeiture [Doc. 119-2 ¶ 223]. 21 Agent Celeste states that seizure warrants, rather than a protective order, are necessary for the bank accounts because electronically-stored funds are easily transferred [Doc. 119-2 ¶ 224]. She also states that the seizure warrants are necessary for the subject vehicles and watercraft because these assets are easily moved, hidden, or sold [Id.]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 28 of 91 PageID #: <pageID>
29 pharmacy” but specialized in making topical creams and hormones that were specific for patients [Id.]. Defendant Roper stated she previously worked in traditional pharmacies and for the last ten years has worked in compounding pharmacies [Id.]. She said compounding involves mixing components, such as powders and creams, to make topical lotions, sublingual troches, or capsules [Id. at 24]. According to Defendant Roper, she previously worked in the compounding laboratory at RHP and, before that, at Volunteer Pharmacy [Id. at 23–25]. She stated that before working for the compounding pharmacies, she worked as a pharmacy technician at Walmart [Id. at 25]. Defendant Roper stated that a pharmacy technician has several duties such as entering prescriptions in the computer system, counting out medications, checking out patients at the register, and making phone calls to patients for refills [Id.]. She agreed that a pharmacy technician is the pharmacist’s assistant [Id.]. Defendant Roper said pharmacy technicians do not interact with medical providers, but they do interact with patients [Id. at 25–26]. Defendant Roper said when a provider sent a prescription to RHP, they primarily did so by fax or “e-script” through the computer system [Id. at 26]. Defendant Roper testified that on April 16, 2024, she was working at RHP when the FBI came into the pharmacy wearing full tactical gear [Id.]. She said she was standing behind the computer closest to the pharmacy’s office when the FBI entered, identified themselves, and stated that they had a warrant [Id. at 26–27]. She said the agents told her to step back from the computer, which she did [Id. at 27]. Defendant Roper said an agent asked her to show the agent how to operate the computer system [Id.]. Defendant Roper stated that she showed the agent how to do simple tasks on Pioneer, which is RHP’s pharmacy management system, and which was already pulled up on the computer [Id.]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 29 of 91 PageID #: <pageID>
30 Defendant Roper said she had access to RHP’s Pioneer system [Id.]. She explained that the system allowed her to search for patients and review their profiles [Id. at 28]. She said when RHP received a prescription, the Pioneer system would “walk you through” processing them [Id.]. She said when RHP received a prescription, she or another employee would “drop them in” and enter the information on the prescription into the computer system [Id.]. Then, a pharmacist would check the information [Id.]. She agreed that if the prescription was for a new patient, she would set up the new patient in the system [Id. at 28–29]. Defendant Roper said once the prescription was sent to the pharmacist, she did not work on it again [Id. at 29]. She denied ever filling out prescriptions or writing things on prescriptions and stated that was the pharmacist’s job [Id.]. She agreed this was also the medical provider’s job [Id.]. Defendant Roper said when the FBI agents entered RHP, they turned off the pharmacy’s security cameras [Id. at 29–30]. She said after she showed the agent how to work the computer, she was asked to move to a table in the front of the pharmacy [Id. at 29–30]. Defendant Roper said at least twenty agents were present during the search [Id. at 30]. She said five people were working at RHP that day, and no customers were present when the FBI arrived [Id.]. She said the agents carried side arms and wore bulletproof vests and cargo pants [Id. at 31]. Defendant Roper stated that the agents did not show her a warrant that morning [Id.]. She said she was questioned, but none of the agents advised her of her rights [Id.]. Defendant Roper did not know the name of the agent who questioned her but stated that Agent Emily Celeste sat beside her taking notes while she was questioned [Id.]. Defendant Roper testified that after showing the agent how to operate the Pioneer system, she was taken to a table in the front [Id. at 32]. She said one agent commented that the employees still had their cell phones and that their cell phones needed to be taken [Id.]. She said an agent then Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 30 of 91 PageID #: <pageID>
31 asked for their cell phones [Id. at 33]. Defendant Roper said her boss, Anne Warren, asked to see the warrant because they were taking the employees’ cell phones [Id. at 32]. She said an agent showed Defendant Warren the warrant, pointed out a section that supposedly authorized the agents to take the cell phones, and then took the warrant back [Id.]. Defendant Roper stated that she did not review the warrant and felt she had to give the agents her cell phone [Id. at 32–33]. Defendant Roper stated that the agents took cell phones from the five employees who were present: Anne Warren, Tabitha Roper, Carina Brabson, Jeannette Porterfield, and herself [Id. at 33]. She said these were the employees’ personal cell phones, not work phones [Id.]. Defendant Roper stated that the agents asked anyone whose cell phone had a code to write it down [Id. at 34]. She said her cell phone did not have a code [Id.]. She stated that the agents did not tell the employees that their phones would be searched [Id.]. Defendant Roper said, instead, the agent said that they would have technicians download all the information from their cell phones [Id. at 35]. She said after the agents took the employee’s cell phones, she saw the cell phones on a table and “connected for hours” [Id.]. Defendant Roper said the agents did not return their cell phones until the end of the search [Id.]. Defendant Roper said the agents never said the employees were free to leave, nor did they tell her that she was not required to talk to them [Id.]. According to Defendant Roper, the agents did not say that she did not have to talk to them, nor did they advise her of her rights [Id.]. She said she did not recall that any of the employees had other personal electronic devices such as iPads with them that day, but they all had their cell phones [Id.]. Defendant Roper said that she felt like she was detained and not free to leave [Id. at 36]. She said none of the employees tried to leave [Id.]. She agreed that she felt intimidated [Id.]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 31 of 91 PageID #: <pageID>
32 Defendant Roper testified that the agents did not ask her to access a list of providers on the computer [Id.]. She said once she went to the table in the front of the business, she did not go back to her computer [Id.]. She said the agents did not remove computers from RHP, and she did not know if they downloaded information from the computers [Id. at 36, 38]. Defendant Roper said she and other employees used the RHP computers to check their personal email [Id. at 36]. She said she did not check Facebook, social media, or text messages on the work computers [Id. at 36– 37]. She said other than checking her email, she did not have personal photographs or other information on the work computers [Id. at 37]. She did not know if other employees had personal information on the work computers [Id.]. Defendant Roper stated that the agents took her personal cell phone [Id.]. She said RHP did not pay the bill for her cell phone, and she was not required to use it for any part of her job at RHP [Id.]. She agreed that she cooperated with the agents and did not question their actions [Id.]. She agreed that she answered all their questions [Id. at 37–38]. Defendant Roper said she saw the agents take ten or more banker boxes of prescriptions out of RHP [Id. at 38]. She said one of the agents said they had a warrant to seize “all things” [Id.]. She agreed that the agent said “we’ve got a warrant, and we’re taking everything” [Id. at 39]. On cross-examination, Defendant Roper testified that when the agents arrived, she stood beside the computer closest to the office with the Pioneer program open on that computer in preparation for her work that day [Id. at 39–40]. She said that computer was her workstation for that day, but she switched computers depending on who was working each day [Id. at 40]. Defendant Roper said that she could access Pioneer on all the computers [Id.]. Defendant Roper stated that providers faxed prescriptions electronically and sent e-scripts through Pioneer [Id.]. She agreed that if a provider wrote a paper prescription, it came to the Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 32 of 91 PageID #: <pageID>
33 pharmacy through “SRFax,” whereas an e-script was completely digital [Id. at 40–41]. She confirmed that she would not expect to see writing on an e-script [Id. at 41]. Defendant Roper said when a prescription came to the pharmacy by SRFax, it first came to an email in-box as a “pdf” file, and then the employee who noticed it would print it [Id.]. Defendant Roper said after she printed a prescription, she would scan the printed prescription into the Pioneer system using a scanner [Id. at 43–44]. She said next, she would type the information on the prescription into the patient’s profile [Id. at 44–45]. She said she then submitted the prescription electronically to the pharmacist who checked all the information and made any corrections [Id. at 44–45]. Defendant Roper stated that she was inside RHP when the agents arrived [Id. at 45]. She agreed that no one said she could not leave [Id.]. She stated that no one locked the doors but that a “big guy” stood in front of the front door [Id.]. She said RHP had a front and a back door [Id. at 46]. She did not know if an agent stood in front of the back door [Id.]. Defendant Roper said she worked at Walmart from 2004 to 2008 [Id.]. She said after that, she worked at other jobs and had children before working at another pharmacy [Id.]. Defendant Roper agreed that she is licensed by the State of Tennessee and took online continuing education while at RHP [Id. at 47]. On redirect examination, Defendant Roper testified that she is licensed as a pharmacy technician [Id. at 47–48]. She stated that she registered with the state of Tennessee, and the state sent her a license [Id. at 48]. She said she is not certified as a pharmacy technician [Id.]. Haney Testimony. Tiffany Haney acknowledged that counsel advised her of her rights under the Fifth Amendment and knowing those rights, she voluntarily chose to testify [Id. at 49– Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 33 of 91 PageID #: <pageID>
34 50]. Defendant Haney testified that on the day of the search of RHP,22 she and her husband were driving to Sevierville when she received a telephone call from either Anne Warren or Tabitha Roper that the FBI was entering the pharmacy [Id. at 50]. Defendant Haney said she and her husband turned around and drove to RHP, arriving one hour after the search began [Id.]. She said she entered through the back door and asked Agent Valero if she could see the search warrant [Id.]. Defendant Haney stated that she began reading the warrant but was confused about what was happening [Id.]. She stated that while still reviewing the warrant, Agent Valero asked for her cell phone [Id.]. She said she walked away from him and to the front of the pharmacy, where she may have talked to Defendant Warren [Id.]. Defendant Haney stated that she then walked into the compounding laboratory, and Agent Valero again asked for her cell phone [Id.]. She said the other employees had already provided their cell phones to the FBI, so she felt as though she did not have a choice and had to give them her cell phone, too [Id. at 50–51]. She said Agent Valero asked if her cell phone had a code, and she gave him the code [Id.]. Defendant Haney said after giving her cell phone to the agent, she remained outside the pharmacy for most of the day [Id. at 51]. Defendant Haney said in his first request, Agent Valero said, “I’m going to need your phone” [Id.]. She asked to read in the search warrant where it permitted that, and Agent Valero stood next to her while she read through the warrant [Id.]. She stated that she then walked to the front of the pharmacy and asked the staff what was happening [Id.]. Defendant Haney said she could not recall if she spoke to Defendant Warren or Defendant Roper because that day remains 22 Defense counsel incorrectly stated the date as March 16, 2024, in his question to Defendant Haney [Doc. 195 p. 50]. Defendant Haney later corrected him confirming that the date was April 16, 2024 [Id. at 53]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 34 of 91 PageID #: <pageID>
35 “fuzzy” to her [Id.]. She recalled the agents saying, “We have a warrant to take your phones” [Id. at 51–52]. She testified that Defendant Warren said, “Yes, I gave it to them” [Id. at 52].23 Defendant Haney stated that when she returned to the back, Agent Valero said he needed her cell phone and asked for the lock code to open it [Id.]. She said that Agent Valero asked if her phone had a lock code, and she gave him her code [Id.]. She stated that after the FBI had her cell phone for thirty to forty minutes, a male agent again asked for the code to her phone [Id.]. Defendant Haney testified that for the rest of that day, April 16, 2024, she stood outside, confused and shocked about what was happening [Id. at 53]. She said the FBI seized all the “hard copy prescriptions,” notebooks containing formulations, and RHP’s USB compounding manual with the guidelines that RHP is required to keep onsite [Id.]. She said they took all loose papers with notes on them [Id.]. Defendant Haney stated that a pharmacy is required to keep all prescriptions it fills for a certain number of years [Id. at 54]. She said the FBI took approximately 70,000 prescriptions, which were stored in eight to ten boxes in the back of the pharmacy [Id.]. She agreed the boxes contained prescriptions other than those from APS, Dr. Scariano, or Better Health Wellness [Id.]. On cross-examination, Defendant Haney stated that when Agent Valero asked for her cell phone the second time, he was still in the compounding laboratory, and she returned to the room 23 Defendant Anne Warren provided, through counsel for Defendant Haney, a signed statement regarding the seizure of her cell phone [Doc. 185-2]. Defendant Warren states that around 9:00 a.m., on “March 16, 2024,” FBI agents entered the building where she was working and “directed all employees to move to the front corner of the store” [Id. at 2]. Defendant Warren relates that the agents said they would be taking all cell phones to copy them [Id.]. She said she asked to see the search warrant permitting this, and upon reviewing the warrant, she did not find a mention of cell phones [Id.]. When she mentioned this to an agent, he showed her a reference to “electronic media,” which the agent claimed authorized the seizure and copying of employees’ cell phones [Id.]. Defendant Warren said she felt she had no choice and gave her cell phone to the agent [Id.]. She said she also gave her passcode upon the agent’s request, and he wrote it down [Id.]. She said her cell phone was returned four to six hours later [Id.]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 35 of 91 PageID #: <pageID>
36 where he was [Id. at 54–55]. She agreed that the compounding laboratory was in the same building as the rest of the pharmacy [Id. at 55]. She said the FBI took the cell phones of Ann Warren, Tina Roper, Tabitha Roper, Carina Brabson, and Jeanette Porterfield [Id.]. She agreed that when she arrived at the pharmacy all those people were inside the building [Id.]. She said that she and Defendant Warren went outside because they had called an attorney who represents RHP to come to the pharmacy, and that attorney told them to stay outside [Id. at 56]. She said the rest of the employees went back and forth between the pharmacy and the back parking lot [Id.]. Defendant Haney agreed that RHP is no longer in business but stated that she was the owner and that RHP was founded in 2018 [Id. at 57]. II. ANALYSIS The Fourth Amendment protects individuals against unreasonable searches or seizures of “their persons, houses, papers, and effects[.]” U.S. Const. amend IV. It requires that law enforcement have probable cause and obtain a search warrant before searching a residence or a cellular telephone. Collins v. Virginia, 584 U.S. 586, 593 (2018) (“At the [Fourth] Amendment’s very core stands the right of a man to retreat into his own home and there be free from unreasonable governmental intrusion.” (citation omitted & modified)); Riley v. California, 573 U.S. 373, 400 (2014) (holding the search of a cell phone requires a search warrant). Here, in addition to challenging the seizure of personal assets and the seizure and search of their cell phones, Defendants seek to suppress evidence seized from a business. The Fourth Amendment protection against warrantless searches extends to “commercial premises,” Mancusi v. DeForte, 392 U.S. 364, 367 (1968), but “[a]n expectation of privacy in commercial premises . . . is different from, and indeed less than, a similar expectation in an individual’s home,” New York v. Burger, 482 U.S. 691, 700 (1987) (citation omitted). An Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 36 of 91 PageID #: <pageID>
37 individual enjoys the protection of the Fourth Amendment in his or her place of business if “the area was one in which there was a reasonable expectation of freedom from governmental intrusion.” DeForte, 392 U.S. at 368 (citation omitted). “The business[wo]man, like the occupant of a residence, has a constitutional right to go about h[er] business free from unreasonable official entries upon h[er] private commercial property.” See v. Seattle, 387 U.S. 541, 543 (1967); see also Burger, 482 U.S. at 699 (holding that the owner of a business in a closely-regulated industry has a reduced expectation of privacy); Dow Chem. Co. v. United States, 476 U.S. 227, 236 (1986) (observing “Dow plainly has a reasonable, legitimate, and objective expectation of privacy within the interior of its covered buildings”); c.f., Autoworld Specialty Cars, Inc. v. United States, 815 F.2d 385, 388–89 (6th Cir. 1987) (holding a defendant had no expectation of privacy in an auto showroom open to the public to browse and make purchases). Whether the search is for a personal residence or property or a commercial premises, an issuing judge’s determination that probable cause for a search warrant exists is entitled to “great deference.” United States v. Allen, 211 F.3d 970, 973 (6th Cir. 2000) (quoting Illinois v. Gates, 462 U.S. 213, 236 (1983)). This deferential standard promotes the preference for the use of search warrants as opposed to warrantless searches. Id. “The task of the issuing [judge] is simply to make a practical, common-sense decision whether, given all the circumstances set forth in the affidavit before him, . . . there is a fair probability that contraband or evidence of a crime will be found in a particular place.” Gates, 462 U.S. at 238. The “duty of a reviewing court is simply to ensure that the [judge] had a substantial basis for concluding that probable cause existed.” Id. at 238–39. In reviewing the sufficiency of probable cause for a search warrant, the Court considers only the information that was before the issuing judge—that is, the information contained within the four corners of the supporting affidavit. United States v. Brooks, 594 F.3d 488, 492 (6th Cir. 2010). Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 37 of 91 PageID #: <pageID>
38 The sworn information in the supporting affidavit carries a presumption of validity. United States v. Bowman, No. 24-5835, 2025 WL 1721155, at *2 (6th Cir. June 20, 2025) (citing Franks v. Delaware, 438 U.S. 154, 171 (1978)). Here, Defendants challenge the search of RHP and the seizure and search of employees’ cell phones pursuant to the search warrant for the pharmacy [Doc. 89 pp. 4–5; Doc. 165 pp. 10, 12–13]. They argue that Agent Valero’s affidavit fails to provide probable cause to search RHP because it contains false statements and material omissions necessary to the probable cause finding [Doc. 89 pp. 4–5, 14–24]. They also maintain that the seizure and search of cell phones exceeds the scope of the search warrant [Doc. 165 pp. 10, 12–13; Doc. 177 p. 3]. Finally, they argue that the affidavit fails to establish a nexus between the personal cell phones of the employees and health care fraud [Doc. 195 pp. 73, 80, 97]. Defendants also challenge the seizure of their assets pursuant to seizure warrants [Doc. 89 pp. 24–27; Doc. 165 p. 14]. They argue that Agent Celeste’s affidavit also contains falsehoods and omissions material to probable cause [Doc. 89 pp. 24–25, 27]. As a part of their Franks challenge, they argue that Agent Celeste’s affidavit lacks probable cause because it fails to demonstrate that the seized assets are the proceeds of health care fraud [Doc. 89 pp. 25–26; 165 p. 14]. For the reasons set forth below, the undersigned finds that as co-owners, Defendants Haney and Warren have standing to challenge the search of the premises of RHP, but Defendant Roper does not. Defendants each have standing to challenge the seizure and search of her personal cell phone but may not challenge the search of anyone else’s cell phone. Finally, Defendants Haney and Warren each have standing to challenge the seizure of her personal assets seized pursuant to the seizure warrants, but Defendant Roper lacks standing to challenge the seizure warrants because her assets were not seized. Turning to the substance of Defendants’ arguments, the undersigned Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 38 of 91 PageID #: <pageID>
39 concludes that Defendants fail to make a substantial preliminary showing to warrant a Franks hearing for either affidavit, agents searched the Defendants’ personal cell phones in good faith and properly seized other business records, and even if Defendants could seek return of property seized pursuant to the seizure warrants, the seizure warrants are supported by probable cause. A. Standing A claimant alleging a Fourth Amendment violation must have a legitimate expectation of privacy in the place searched or the thing seized. Rakas v. Illinois, 439 U.S. 128, 143 (1978). “[S]tanding is ‘an element’ of a Fourth Amendment suppression claim[,]” and the person raising the Fourth Amendment challenge shoulders the “burden” of demonstrating his or her standing. United States v. Russell, 26 F.4th 371, 375 (6th Cir. 2022). The term “standing” has become “shorthand” for the requirement that a defendant must show that a search or seizure infringed upon his or her own rights. Id. at 374. Accordingly, Defendants must show that the searches of RHP and of the cell phones and the seizure of assets infringed upon their personal rights or legitimate expectation of privacy. Id. at 375; United States v. Talley, 275 F.3d 560, 563 (6th Cir. 2001) (holding that a defendant challenging a search has the burden of demonstrating his or her legitimate expectation of privacy in the location). In assessing the reasonableness of a defendant’s expectation of privacy, a court examines the person’s proprietary or possessory interest in the place to be searched or item to be seized[;] whether the defendant has the right to exclude others from the place in question; whether he had taken normal precautions to maintain his privacy; whether he has exhibited a subjective expectation that the area would remain free from governmental intrusion; and whether he was legitimately on the premises. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 39 of 91 PageID #: <pageID>
40 United States v. Waller, 426 F.3d 838, 844 (6th Cir. 2005) (quoting United States v. King, 227 F.3d 732, 744 (6th Cir. 2000)) (alteration in original). Here, the Court examines Defendants’ standing to challenge the search of RHP, the cell phones seized at RHP, and the seizure warrants. 1. Standing to Challenge Search of RHP Defendants Haney and Warren argue that as the co-owners of RHP, they have a legitimate expectation of privacy in the business’s records [Doc. 115 p. 3 (arguing that Defendant Haney has standing to challenge the “search of a business she owned and whose business records are being offered against her”); Doc. 96 p. 1]. At the May 29 motion hearing, Defendants Haney and Warren argued that that they worked as pharmacists at RHP; they kept controlled substances in a locked vault; the patient information was protected by HIPPA and passcodes for the computers; and the business was open to the public only during certain hours [Doc. 147 pp. 23–25 (adopting arguments of Defendant RHP)]. Accordingly, Defendants Haney and Warren maintain that their subjective expectation of privacy in the business they own, operate, and work in daily, is reasonable [Id. at 25]. Defendant Roper argues that she “has standing to challenge the search of RHP because her personal cell phone was seized and searched under color of the warrant” [Doc. 158 p. 1; see also Doc. 147 pp. 31–32 (arguing that if Defendant Roper’s cell phone was seized, that alone confers standing)].24 She also asserts standing to challenge her personal workspace, her work computer, and her personal items including her personal cell phone [Doc. 158 p. 4]. Defendant Roper 24 At the May 29 hearing, Defendant Roper also argued that she has standing because the Second Superseding Indictment charges her as if she were an owner or operator of RHP [Doc. 147 p. 27]. Defendant Roper did not develop this argument, so the undersigned does not consider it. Moreover, the Second Superseding Indictment identifies Defendant Roper as an employee of RHP and not an owner [Doc. 127 ¶¶ 3–5]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 40 of 91 PageID #: <pageID>
41 contends that her subjective expectation of privacy in her workspace, work computer, and personal cell phone is objectively reasonable and permits her to challenge the search of RHP [Id. at 10]. That an individual is an owner or sole shareholder of a business does not automatically confer standing. United States v. Mohney, 949 F.2d 1397, 1403 (6th Cir. 1991). Instead, “an officer of a corporation may be a ‘person aggrieved’ by a corporate search and seizure and thus have standing to challenge the search” when the circumstances show that he or she had “a reasonable expectation of privacy in the seized materials.” Id. Circumstances demonstrating a reasonable expectation of privacy include that the individual worked daily or regularly in the premises searched and personally prepared the corporate records seized from his or her office. Id. Other “[p]ertinent factors” are the individual’s possessory interest in the thing seized or the place searched, whether he has the right to exclude others from that place, whether he has exhibited a subjective expectation that it would remain free from governmental invasion, whether he took normal precautions to maintain his privacy and whether he was legitimately on the premises. United States v. Bli, 147 F. Supp. 2d 734, 740 (E.D. Mich. 2001) (quoting United States v. Haydel, 649 F.2d 1152, 1155 (5th Cir. 1981) (other citations omitted)) (finding a defendant’s subjective interest in the business records of the family farm, which were stored in a trailer on his property and not open to non-family members, was reasonable). The Government argues that the records seized from RHP (i.e., the prescriptions)25 are “the property of non-parties” in which Defendants have no legitimate expectation of privacy [Doc. 111 pp. 10–11]. The record reveals, however, that Defendants Haney and Warren owned RHP, and 25 At the May 29, 2025 motion hearing, the Government agreed that Defendants Haney and Warren can likely demonstrate standing to contest the seizure of the prescriptions from RHP but argued that they had yet to state a sufficient factual basis to demonstrate standing [Doc. 147 pp. 28–29]. Following Ms. Haney’s testimony at the August 12, 2025 evidentiary hearing, many of the facts proffered at the May 29 hearing are now in the record. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 41 of 91 PageID #: <pageID>
42 that they worked as pharmacists at RHP, they were involved in compounding the creams for the prescriptions, and they were required to maintain copies of filled prescriptions. Defendants stored the boxes of filled prescriptions in the back room of RHP. Moreover, RHP used the Pioneer prescription management system to process prescriptions [Doc. 195 pp. 27–28]. Defendant Haney’s and Defendant Warren’s expectation of privacy in RHP is reasonable. See Burger, 482 U.S. at 699 (“An owner or operator of a business . . . has an expectation of privacy in commercial property, which society is prepared to consider to be reasonable.” (citation omitted)); United States v. Pompy, No. 18-cr-20454, 2021 WL 978797, at *3 (E.D. Mich. Mar. 16, 2021) (finding that a physician had standing to challenge search of his office and seizure of patient medical files when he prepared and maintained the files using a password-protected, “encrypted EMR system that only he and his staff have access to”); United States v. Newman, No. 3:19-CR-59, 2020 WL 7384864, at *7 (E.D. Tenn. Sept. 8, 2020) (finding that a medical director and majority owner of physical building and clinic, who controlled access to and managed the patient files, had standing to challenge search premises of clinic), report and recommendation adopted, 2020 WL 6938815 (E.D. Tenn. Nov. 25, 2020); United States v. Ferguson, No. 10-20535, 2012 WL 628509, at *6 (E.D. Mich. Feb. 27, 2012) (holding that co-owners of construction business had standing to challenge search of business records, which were stored in a secure location and some of which were prepared by the co-owners). Defendant Roper, however, is differently situated. As the Government points out [Doc. 168 p. 2], Defendant Roper fails to show that she had a private workspace or work computer that was not shared or could not be monitored by others. Although Defendant Roper states that she viewed her personal email, photographs, and “other personal matters” on her work computer [Doc. 158-1, Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 42 of 91 PageID #: <pageID>
43 Roper Declaration, p. 2], she does not show that she expected those actions would remain private from other RHP employees. Defendant Roper argues that she is similar in standing to the medical director in the Newman case [Doc. 158 p. 5 (citing Newman, 2020 WL 7384864, at *5)]. The undersigned disagrees. In Newman, the defendant was the majority owner of both the physical building and the pain clinic, managed the employees, and controlled access/had “administrator rights” to the electronic files. Id. at 6–7. In contrast, Defendant Roper was an employee, rather than an owner or manager. Although she worked on patient accounts and input data into the computer system, the undersigned has no evidence that she administered the Pioneer system, rather than merely used it. Nor did she demonstrate that she had a particular workspace at RHP from which she could exclude other employees. Instead, she testified that she was at a particular computer on the day of the search but that she could have been at a different computer based upon the day of the week and who was working. The undersigned finds that Defendant Roper’s subjective expectation of privacy in RHP is not one that society would recognize as reasonable.26 In sum, Defendants Haney and Warren have standing to challenge the search of RHP, but Defendant Roper cannot challenge the search of the business as a whole, nor the search of any “work space” or computer on the premises. 26 Defendant Roper argues the Government cannot oppose her standing to challenge her workspace or work computer because it previously argued in another case that the medical director of a pain clinic “could potentially challenge the search warrant [for the clinic] but only as to his workspace or personal computer” [Doc. 158 pp. 1–2 & n.1 (citing United States v. Newman, No. 3:19-CR-59, 2020 WL 7384864, at *7 (E.D. Tenn. Sept. 8, 2020), report and recommendation adopted, 2020 WL 6938815 (E.D. Tenn. Nov. 25, 2020))]. As discussed above, the circumstances of Defendant Roper and those of the medical director in the Newman case are materially different. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 43 of 91 PageID #: <pageID>
44 2. Standing to Challenge Search of Cell Phones The Government concedes that Defendants Haney, Warren, and Roper each had a reasonable expectation of privacy in her own personal cell phone [Doc. 147 pp. 28–29; Doc. 168 p. 2]. Indeed, “[o]ne does not lose expectations of privacy in one’s personal effects merely because they are stored on another’s property[,]” including the property of one’s employer. United States v. Williams, 347 F. Supp. 3d 312, 316 (E.D. Mich. 2018) (concluding that a defendant had a reasonable expectation of privacy in her zipped backpack, although it was in her employer’s vehicle (citing cases)). It argues, however, that none of the Defendants had an expectation of privacy in anyone else’s cell phone [Doc. 147 pp. 28–29; Doc. 168 pp. 2–3]. The undersigned agrees that Defendants have not made this showing. For example, Defendants have provided no evidence that employees were required to use their personal cell phones to conduct business at RHP. Nor do they show that RHP paid for their cell phones or the other employees’ cell phones. Finally, Defendants do not demonstrate that they had a right to access or to exclude others from any employee’s cell phone other than their own. United States v. Simpson, 706 F. Supp. 3d 722, 731 (E.D. Ky. 2023) (holding that a defendant lacked standing to challenge search of coconspirator’s cell phone) (appeal filed June 5, 2024); United States v. Molina, 569 F. Supp. 3d 596, 608 (E.D. Ky. 2021) (finding that a defendant lacked standing to challenge codefendant’s cell phone). Defendants Haney and Warren argue the fact that they potentially face criminal liability from the information extracted from their employee’s cell phones gives them standing to challenge law enforcement’s seizure of the cell phones [See Doc. 151 p. 23]. A defendant’s standing, however, is not evaluated from the standpoint of whether the evidence seized creates criminal liability. United States v. Powell, 847 F.3d 760, 768 (6th Cir. 2017) (explaining that only those Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 44 of 91 PageID #: <pageID>
45 whose constitutional rights are violated can move to suppress evidence, “‘not [] those who are aggrieved solely by the introduction of damaging evidence’” (quoting United States v. Padilla, 508 U.S. 77, 81–82 (1993))); see also United States v. Salvucci, 448 U.S. 83, 95 (1980) (rejecting “automatic standing” doctrine for possession offenses because it “serves only to afford a windfall to defendants whose Fourth Amendment rights have not been violated”). Instead, the Court examines whether the individual challenging the search has a subjective expectation of privacy in the item or area and whether society recognizes that expectation as reasonable. Here, the answer is “yes” to both questions regarding each Defendant’s own personal cell phone, but “no” as to anyone else’s cell phone. 3. Standing to Challenge Seizure Warrants To demonstrate standing, a defendant must show “a legitimate expectation of privacy in the area searched or the items seized.” United States v. Davis, 430 F.3d 345, 359–60 (6th Cir. 2005). An expectation of privacy may derive from either a property interest or a possessory interest. Id. (citation omitted); see also United States v. Jones, 565 U.S. 400, 404 (2012) (affirming the right to be free from governmental intrusion in one’s own physical property). Here, Defendants Haney and Warren have a property and/or possessory interest in one or more of the bank accounts, investment accounts, vehicles, and watercraft seized pursuant to the seizure warrants. See United States v. King, 227 F.3d 732, 744 (6th Cir. 2000) (observing that one’s property and possessory interest is an “obvious” factor conferring standing). Accordingly, Defendants Haney and Warren each have standing to challenge the seizure of her own assets, i.e., the assets in which she has a property or a possessory interest. Defendant Roper, however, does not demonstrate that she has a property or possessory interest in any of the accounts or property Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 45 of 91 PageID #: <pageID>
46 seized pursuant to the seizure warrants [See Doc. 165 pp. 4–6 (addressing only Defendant Roper’s cell phone, computer, and workstation)]. As such, she lacks standing to challenge the warrants. In sum, the undersigned finds that Defendants Haney and Warren have standing to challenge the search of the premises of RHP, but Defendant Roper does not. Defendants Haney, Warren, and Roper each have standing to challenge the seizure and search of her own personal cell phone but lack standing to challenge the search of anyone else’s cell phone. Finally, Defendants Haney and Roper each have standing to challenge the seizure of her own assets seized pursuant to seizure warrants. Defendant Roper lacks standing to challenge the seizure warrants because she fails to show that she has a property or possessory interest in any of the seized accounts or assets. B. Franks Challenge Defendants27 request a Franks hearing to challenge false statements and material omissions in Agent Valero’s and Agent Celeste’s affidavits [Doc. 89 pp. 1–2, 14–27]. “In a Franks hearing, a court determines whether to suppress the fruits of an executed search warrant, where the warrant was the result of a false statement.” United States v. Crawford, 943 F.3d 297, 309 (6th Cir. 2019) (citing Franks v. Delaware, 438 U.S. 154, 171 (1978)). In the first instance, an affidavit supporting a search warrant is presumed to be valid. United States v. Bowman, No. 24-5835, 2025 WL 1721155, at *2 (6th Cir. June 20, 2025) (citing Franks, 438 U.S. at 171)). “A defendant challenging the validity of a search warrant’s affidavit bears a heavy burden.” United States v. Bateman, 945 F.3d 997, 1008 (6th Cir. 2019); see also United 27 The undersigned finds that Defendants Haney and Warren have standing to challenge the search of RHP, but Defendant Roper does not. Nevertheless, Defendant Roper adopts and realleges Defendant Haney’s arguments regarding false statements and material misrepresentations in Agent Valero’s affidavit [See Doc. 151 p. 67; Doc. 158 pp. 3–4, 6–7, 10; Doc. 165 pp. 1–9, 11]. The Court notes Defendant Roper’s additional Franks arguments made in her Motion and Memorandum to Suppress [Doc. 165]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 46 of 91 PageID #: <pageID>
47 States v. Sanders, 106 F.4th 455, 470–71 (6th Cir.) (en banc), cert. denied, 145 S. Ct. 603 (2024). To warrant a Franks hearing, a defendant “must make a ‘substantial preliminary showing that a false statement knowingly and intentionally, or with reckless disregard for the truth, was included by the affiant in the warrant affidavit.’” Crawford, 943 F.3d at 309 (quoting Franks, 438 U.S. at 171). “‘The allegedly false statement,’ moreover, must be ‘necessary to the finding of probable cause.’” Id. (quoting Franks, 438 U.S. at 171). A defendant challenging the veracity of statements in the affidavit cannot rely on “‘conclusory’” assertions but, instead, must identify “‘specific false statements’” that are accompanied by an offer of proof. Bowman, 2025 WL 1721155, at *2 (quoting Sanders, 106 F.4th at 471 & United States v. Green, 572 F. App’x 438, 442 (6th Cir. 2014)). Omissions, too, can form the basis for a Franks challenge, but “an affidavit which omits potentially exculpatory information is less likely to present a question of impermissible official conduct than one which affirmatively includes false information.” United States v. Adkins, 107 F.3d 1213, 1217 (6th Cir. 1997) (citation omitted). This is because an affidavit need not include all facts gathered over the course of an investigation. Id. Thus, “except in the very rare case where the defendant makes a strong preliminary showing that the affiant with an intention to mislead excluded critical information from the affidavit, and the omission is critical to the finding of probable cause, Franks is inapplicable to the omission of disputed facts.” Mays v. City of Dayton, 134 F.3d 809, 816 (6th Cir. 1998). A heightened standard is necessary for omissions to foreclose “‘endless conjecture about investigative leads, fragments of information, or other matter that might, if included, have redounded to defendant’s benefit.’” United States v. Martin, 920 F.2d 393, 398 (6th Cir. 1990) (quoting United States v. Colkley, 899 F.2d 297, 301 (4th Cir. 1990)); see also United States v. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 47 of 91 PageID #: <pageID>
48 Hanna, 661 F.3d 271, 285 (6th Cir. 2011) (affirming the district judge’s observation that when omissions are at issue, “‘additional hurdles must be met’”). “If the defendant does succeed in making a preliminary showing that the government affiant engaged in ‘deliberate falsehood’ or ‘reckless disregard for the truth’ in omitting information from the affidavit, the court must then consider the affidavit including the omitted portions and determine whether probable cause still exists.” Adkins, 107 F.3d at 1217 (citation omitted). Whether because of an alleged false statement or material omission, a defendant seeking a Franks hearing must make a substantial showing that the affiant intentionally or recklessly included or omitted the statement from the affidavit. Butler v. City of Detroit, 936 F.3d 410, 418 (6th Cir. 2019). A statement in the affidavit “is only considered to be issued with ‘reckless disregard for the truth’ if the defendant shows the affiant subjectively ‘entertained serious doubts as to the truth of his allegations.’” Bateman, 945 F.3d at 1008 (6th Cir. 2019) (citation modified) (quoting United States v. Cican, 63 F. App’x 832, 836 (6th Cir. 2003)). “‘Allegations of an officer’s negligence or innocent mistake are insufficient.’” Id. (citation modified) (quoting Franks, 438 U.S. at 171). The “well-settled framework for Franks hearings requires a defendant to ‘point to specific false statements,’” in the affidavit that he claims are false or state the alleged omission. United States v. Green, 572 F. App’x 438, 442 (6th Cir. 2014) (citation omitted). Here, Defendants argue that both affidavits contain three categories of false statements or material omissions: (1) the affidavits contain alleged “prescriber denials”28 that the affiants knew were later retracted; 28 A “prescriber denial” is where a prescriber, when presented with either information a prescription filled by RHP or a copy of the prescription itself, denied that he or she wrote that prescription or alleged that the prescription was modified or changed from what the prescriber wrote [See Doc. 119-1 ¶¶ 49, 54, 57; see also Doc. 89 pp. 6–7]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 48 of 91 PageID #: <pageID>
49 (2) the affidavits state that RHP filled prescriptions that Dr. Jack Scariano did not prescribe but those prescriptions were faxed to RHP by Dr. Scariano’s practice; and (3) the affidavits state that the FBI seeks evidence of illegal “kickbacks” in the form of copayment waivers, when RHP collected copays and non-collection is permissible in some situations and the FBI actually sought evidence of bribes by RHP to medical providers [Id. at 4–5; Doc. 115 pp. 3–11]. Defendants allege that Agent Celeste’s affidavit similarly relies on false statements and material omissions and does not state probable cause for seizing all assets [Doc. 89 pp. 2, 24–27]. The undersigned examines each of the categories in turn with respect to Agent Valero’s affidavit. After considering each of the categories individually, the undersigned examines the impact of all alleged omissions in Agent Valero’s affidavit collectively. Finally, the undersigned turns to alleged false statements and omissions in Agent Celeste’s affidavit supporting the seizure warrants and to Defendants’ argument on probable cause. 1. Prescriber Denials Defendants challenge prescriber denials from three sources: the OptumRx audit, the Humana audit, and the interview of NP Manning. Specifically, Defendants assert that Agent Valero’s affidavit contains alleged prescriber denials made during the OptumRx and Humana audits in 2020 that Agent Valero knew were later retracted and contradicted by other evidence in the same audit files [Doc. 89 pp. 4, 15]. They also argue that the affiant makes a false statement about the prescription issued by NP Ashley Manning because in reproducing the prescription in the affidavit, the affiant cuts off the fax transmission heading, which shows the prescription was faxed to RHP [Doc. 115 pp. 6–7]. The Government responds that Agent Valero’s affidavit contains no false representations and the alleged omission of investigations of APS and Dr. Scariano are not material to probable cause [Doc. 111 pp. 10–15]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 49 of 91 PageID #: <pageID>
50 a. OptumRx Audit Regarding the OptumRx audit, Defendants argue that Agent Valero misled the issuing judge by presenting only the prescriber denials and not the information known from the investigation of Associated Pain Specialists (“APS”) “that contradicted those denials” [Doc. 89 p. 16]. Defendants contend that investigators knew that the prescribers involved in the OptumRx audit worked for APS, which was the subject of an investigation since 2017 [Doc. 89 pp. 7–8]. Prescribers at APS told investigators that office staff were altering or writing prescriptions for medications, including pain creams, without the prescribers’ knowledge [Doc. 89 pp. 8–11, 15]. Defendants allege that OptumRx’s audit file contains two prescriptions that providers Courtney Carroll and Courtney Travis denied writing, and those prescriptions show that they were faxed to RHP [Doc. 89 p. 16].29 Defendants assert that contributing to this misimpression, Agent Valero did not state that OptumRx only sought explanation of a sample of the 338 prescriptions for Lidocaine-HC rectal kits and that seven of the twenty-three prescriptions in the sample were faxed to RHP by the medical practices [Doc. 89 p. 17]. They also point out that of the sixteen remaining prescriptions in the sample, thirteen contained notations that they were “phoned-in” per “Felicia” at APS [Doc. 89 p. 17].30 Defendants argue that Tennessee law authorizes “phone-in prescriptions” 29 Citing to Agent Celeste’s affidavit in support of the seizure warrants, Defendants also argue that Agent Valero omitted that APS prescriber Lindsey Smith verified a prescription sent to RHP [Doc. 89 p. 16]. Agent Celeste’s affidavit, however, reproduced the OptumRx form for prescriber Lindsay Dixon, who affirmed writing a prescription on a different date for a different strength of Lidocaine-HC rectal kit than prescriber Smith [See 119-2 ¶ 42]. Prescriber Dixon also denied prescribing Lidocaine-HC kit 3%-1% on March 2, 2020 [Id.]. 30 Defendant Roper points out that “Felicia Livezey,” an APS employee, received a bonus of $100 per pain cream prescription [Doc. 165 pp. 3–4 (citing Doc. 89-8 p. 3 (Nov. 21, 2022 HHS- OIG Interview of Felisha Livezey)), 15]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 50 of 91 PageID #: <pageID>
51 [Id. (citing Tenn. Code Ann. § 53-11-308(b)–(c)31 & Tenn. Comp. R. & Regs. 1140-03-.03(1)32)]. Defendants argue that by omitting that APS prescribers suspected APS office staff or management to be at fault for the denied prescriptions, Agent Valero left out facts that would have negated probable cause [Doc. 89 pp. 15–17; Doc. 115 p. 5 & n.2]. Defendants also argue that Agent Valero deliberately created the misimpression of the OptumRx audit [Doc. 89 pp. 5, 19]. They contend that Agent Valero’s affidavit references earlier documents in the OptumRx audit and omits later documents from the audit [Doc. 89 pp. 18–19]. They also cite to an April 20, 2022 memorandum in which Agent Valero stated that an insufficient “criminal federal nexus” existed to proceed with criminal charges [Doc. 89 p. 5, Doc. 89-2 p. 1]. Defendants argue that two years later, Agent Valero sought a search warrant based upon the same evidence that he deemed insufficient in 2022, which shows his misrepresentations about the OptumRx audit are intentional or reckless [Doc. 89 p. 5]. The Government disputes Defendant’s evidence of misrepresentations of the OptumRx audit and of Agent Valero’s culpability [Doc. 111 pp. 3, 11–14]. It states that “Agent Valero, with little or no commentary, simply recited the facts outlined in Optum’s report and included screenshots of the prescriber responses” [Id. at 11]. It argues that Defendants’ various evidence of bad acts at APS or by its management do not contradict the reliability of the providers who denied 31 Under Tennessee law, Schedule II drugs may be dispensed upon a “health care presciber[’s]” oral prescription in an “emergency situation[.]” Tenn. Code Ann. § 55-11-308(b). Schedule III and IV drugs “shall not be dispensed without the written or oral prescription of a practitioner.” Tenn. Code Ann. § 55-11-308(c). 32 “To the extent that a medical order contains an order for the compounding, dispensing or administration of a prescription drug or device or related material, the medical order shall be treated as a prescription order. Written medical and prescription orders must be signed by the prescriber. Verbal medical and prescription orders must be immediately reduced to writing (by hand or other means), dated, and initialed by the authorized individual accepting the medical and prescription orders.” Tenn. Comp. R. & Regs. 1140-03-.03(1). Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 51 of 91 PageID #: <pageID>
52 providing prescriptions [Id. at 12]. Moreover, the Government argues that, as Agent Valero points out, RHP received the financial gain from the altered or forged prescriptions, which “bolster[s]” the likelihood that RHP’s premises contains evidence of the subject crimes [Id.]. Finally, it argues that the fact that the prescriptions that are the subject of the prescriber denials were faxed to RHP does not mean that the prescriptions were not altered by RHP, in the same manner as the prescription by NP Manning [Id. at 12]. Regarding Defendants’ assertion that Agent Valero intentionally or deliberately sought to deceive the issuing judge, the Government argues that although Agent Valero questioned probable cause and was faced with administrative delays33 in April 2022, he subsequently obtained additional evidence, specifically the information from NP Manning, and a new federal prosecutor was assigned to the case [Id. at 3]. Thus, the Government contends that Defendants cannot show that Agent Valero created a false impression of provider denials knowingly, intentionally, or with reckless disregard for the truth [Id. at 3–4]. As the Government contends [Doc. 111 p. 11], none of the statements in Agent Valero’s affidavit regarding the OptumRx audit are false. After review of the exhibits and the party’s arguments, the undersigned finds Defendants’ allegations instead amount to an omission that investigators and providers suspected that APS staff, particularly Felisha Livesay, were altering or forging prescriptions.34 Agent Valero also had evidence that RHP was involved in altering or 33 Agent Valero’s April 20, 2022 memorandum stating they had insufficient “criminal federal nexus to proceed,” also states that no new federal prosecutor has been assigned to this case since the former prosecutor’s withdrawal in March 2022 [Doc. 111 p. 3 (quoting April 20, 2022 memorandum by FBI Special Agent Joseph Valero and TBI Special Agent Chris Trice)]. 34 At the May 29, 2025 motion hearing, the Government argued that the affidavit is not devoid of evidence that “the false claims could have been on the providers’ side . . . , not just at the pharmacy” [Doc. 151 p. 39]. It points out that former RHP employee Sydney Goodson made statements that the providers may have been prescribing medications not medically necessary [Id.; see also Doc. 119-1 ¶ 75]. Also, Agent Valero suggests that Dr. Scariano was the subject of an Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 52 of 91 PageID #: <pageID>
53 forging prescriptions, specifically as noted by the Government, from NP Manning, who was not an APS provider and who told agents a prescription that she wrote and that her office faxed to RHP was changed and the changes are not in her handwriting. Agent Valero also had information linking RHP to Felisha Livesay.35 As discussed above, the bar is higher for a defendant to make a substantial preliminary showing for an omission than for a false statement. Martin, 920 F.2d at 398. “[T]o to require that all potentially exculpatory evidence be included in an affidavit, places an extraordinary burden on investigation in stating that Dr. Scariano produced patient files through his counsel and “[i]n relation to another case and in response to compulsory service” [Id. ¶ 59]. 35 At the time he submitted the affidavit to search RHP, Agent Valero had information linking RHP to the improprieties at APS. Defendant Haney provided as an exhibit to her motion an HHS- OIG memorandum summarizing a November 11, 2021 interview of Felisha Livesay, who was originally a “third-party employee” of Clarity Research/Synergymed stationed at APS and later worked for APS [Doc. 89-8 p. 1]. This exhibit reflects that Ms. Livesay said she was “good friends” with Tina, “the pharmacy rep” from RHP [Id. at 4]. Although Ms. Livesay denied receiving any incentives for sending pain cream prescriptions to RHP, she observed that patients had complained to her about RHP sending “different prescriptions” for the separate, uncombined ingredients for a pain cream, and she stated that billing for medications separately, rather than as a compound, resulted in higher charges to the insurance company [Id.]. Ms. Livesay also stated that “Tina” from RHP had talked with Jimmy Cowden, who despite not being an APS employee, had regular meetings with APS owners and leadership [Id. at 4–5]. Defendants point out that thirteen of the sixteen prescriptions in the OptumRx audit sample that were not faxed to RHP contained notations that they were “phoned-in” per “Felicia” at APS [Doc. 89 p. 17]. Defendants also point out that RHP explained the remaining denied prescription by NP Travis as verbally authorized by “Felicia,” whom RHP assumed was acting under the authority of NP Travis [Doc. 89 p. 12]. Also included in Defendant Haney’s exhibits is an FBI report of FBI Agent Emily Celeste’s September 9, 2023 interview of Jimmy Cowden, who works for APS as a business consultant [Doc. 89-11 p. 1]. Mr. Cowden stated that while RHP was being audited by Humana, Tiffany Haney met with him and another manager at APS and asked them to tell an APS provider Courtney Travis to back date some prescriptions and sign them [Id. at 2]. Around the time of this meeting, Ms. Travis told Mr. Cowden that “she felt something wasn’t right with how RHP was operating” [Id.]. Following this meeting with Tiffany Haney, APS dropped all business with RHP [Id.]. Mr. Cowden stated that APS also fired “Felicia,” whose role at APS included assisting with the RHP prescriptions [Id. at 3]. Mr. Cowden stated that Felicia did not have the ability to authorize prescription refills [Id.]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 53 of 91 PageID #: <pageID>
54 law enforcement officers, compelling them to follow up and include in a warrant affidavit every hunch and detail of an investigation in the futile attempt to prove the negative proposition that no potentially exculpatory evidence had been excluded.” Mays, 134 F.3d at 816. Thus, an affiant need not include “all potentially exculpatory information . . . in the search warrant affidavit.” United States v. Sample, No. 11–20386, 2012 WL 715880, at *5 (E.D. Mich. Mar. 6, 2012).36 This principle that an affidavit need not include every explanation for criminal activity does not “condone deliberate misrepresentations in the warrant application process.” Mays, 134 F.3d at 816. “Franks recognizes that information an affiant reports may not ultimately be accurate, and is willing to tolerate such a result at that early stage of the process, so long as the affiant believed the accuracy of the statement at the time it was made.” Id. (citing Franks, 438 U.S. at 165). Here, Defendants arguably show that Agent Valero was uncertain of RHP’s involvement or the extent of RHP’s involvement in healthcare fraud early in the investigation, which began in March 2021 [Doc. 119-1 ¶ 47]. Later in the investigation, however, Agent Valero had additional evidence beyond the two audits, particularly the information from NP Manning, who did not work for APS [See Doc. 123-1 (FBI Report of March 2024 Manning Interview)]. Defendants fail to show Agent Valero acted with intent to mislead the issuing judge in omitting the investigation into APS or the providers’ suspicions about who was involved in altering or forging prescriptions. 36 In United States v. Sample, the affiant did not include in the affidavit for a search warrant for a residence that another individual made a statement that the drugs and weapons found during a previous search of a separate residence belonged to him. 2012 WL 715880, at *5. Law enforcement concluded that other evidence at the first residence (identification, mail, large size clothing consistent with defendant but not the other individual) was linked to the defendant, not the other individual. “The purpose of a search warrant affidavit is to set forth the facts that the affiant believes support a finding of probable cause.” Id. Thus, the affiant’s failure to include the other individual’s admission was neither false, nor material to probable cause. Id. (also finding no evidence that the omission was made with the intent to mislead). Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 54 of 91 PageID #: <pageID>
55 b. Humana Audit Defendants argue that Agent Valero also misrepresented the results of the Humana audit by relating that most providers responding to the audit denied writing prescriptions and by highlighting denials by NPs Armstrong, Bertram, and Travis [Doc. 89 p. 12]. Defendants explain that the Humana audit states that NP Armstrong and NP Bertram later verified their prescriptions filled by RHP [Doc. 89 pp. 12, 18]. Defendants contend that the Humana audit reveals that in August 2020, Humana began an audit of RHP based upon “spikes” in prescriptions for three pain creams [Doc. 89 p. 12 (citing Doc. 89-9 (Humana Summary and Recommendation))]. Humana spoke with nine patients, all of whom “verified services” were as prescribed [Doc. 89 p. 12]. Humana also reached out to thirteen prescribers, and eight did not respond, two verified services, and three denied services [Id.]. Of the three prescribers who initially denied the prescriptions, two (Alicia Armstrong and Felicia Bertram) subsequently “verified and re-wrote the prescriptions,” and only Courtney Travis, an APS provider, persisted in denying the prescription [Id.]. RHP explained to Humana that it received verbal authorization for the Travis prescription from a member of NP Travis’s office staff, “Felicia,” and assumed that Felicia was working under NP Travis’s direction [Id.]. Humana ultimately imposed no sanctions on RHP save for “education” [Id.]. Defendants argue that Agent Valero included only selected “snippets” from the Humana audit file, including only the initial denials by NPs Travis, Armstrong, and Bertram and not NP Armstrong’s and NP Bertram’s later retractions of those denials [Id. at 12, 18]. They assert Agent Valero’s statement that the majority of responding prescribers marked the “Not Prescribed” box is false because when NP Armstrong’s and NP Bertram’s retractions are considered, only one of five prescribers (NP Travis) denied prescribing the pain creams filled by RHP [Id. at 12–13, Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 55 of 91 PageID #: <pageID>
56 18]. Defendants also maintain that even NP Travis’s denial is contradicted by the data from the patient K.P., per notes in Humana audit file [Id. at 13, 18]. They state that Humana’s audit file shows K.P. told Humana that K.P. “has been using the ointment for a while [and ]is familiar with the pharmacy, medication, and the prescriber” [Id. at 18 (quoting Doc. 119-8 p. 2)]. As with the OptumRx audit, Defendants argue Agent Valero deliberately included only parts of the Humana audit to mislead the issuing judge [Id. at 18–19]. They contend this conclusion is supported by Agent Valero’s provision of information from earlier audit documents that are contradicted by later audit documents and his 2022 conclusion that the OptumRx and Humana audits did not provide sufficient evidence to proceed federally [Id. at 18–19]. The Government asserts that Defendants wrongly interpret the “retractions” by NP Armstrong and NP Bertram [Doc. 111 p. 14]. It argues that they did not retract their prior denials but, instead, their rewriting and back dating of new prescriptions show that they did not originally prescribe the medications, or the prescriptions would not need to be rewritten [Id.]. Thus, it contends that NP Armstrong’s and NP Bertram’s actions further corroborate, rather than undermine, their initial denials [Id.]. The undersigned finds that Agent Valero did not provide any false statements in his affidavit regarding the Humana audit. Agent Valero did, however, omit the subsequent mitigation of two denials by prescribers NP Armstrong and NP Bertram. Regarding NP Armstrong’s and NP Bertram’s actions, Humana’s summary of the audit states that the “[p]harmacy was able to mitigate with 2 of the prescriber denials leaving only denials from [provider] Courtney Travis . . . for four claims of Diflorasone and 3 claims of Calcipotriene” [Doc. 89-9 p. 3]. Included in the record are ten prescriptions for Diflorasone signed by NP Armstrong [Doc. 119-5]. Each prescription contains the statement that the Diflorasone is to be used with a compound cream [Id.]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 56 of 91 PageID #: <pageID>
57 Each also contains an added date of “10/27/2020” under the signature [Id.]. Also included in the record are seven prescriptions for Diflorasone, also stating that it is to be used with a compound cream, and which contain the date “10/27/2020” under what is presumably NP Bertram’s signature [Doc. 119-6]. All seventeen prescriptions are on a prescription pad from Omega Pain Management and Igor Smelyansky, M.D. [Docs 119-5 & 119-6]. That NP Armstrong and NP Bertram “mitigated” these prescriptions by signing and dating them was included in the audit summary. Unlike with the APS information and the OptumRx audit, Agent Valero’s omission of NP Armstrong’s and NP Bertram’s subsequent mitigation does not go merely to a different theory of liability, nor is it information merely countering an innocent explanation for suspicious facts. See United States v. Tagg, 886 F.3d 579, 586 (6th Cir. 2018) (“[P]robable cause does not require officers to rule out a suspect’s innocent explanation for suspicious facts.” (citation modified and omitted)). Instead, as argued by Defendants [Doc. 115 p. 5 n.3], this omission deprives the issuing judge of the complete import of the denials by these two prescribers. See United States v. Stanert, 762 F.2d 775, 781 (9th Cir. 1985) (“By reporting less than the total story, an affiant can manipulate the inferences a magistrate will draw.”), amended by 769 F.2d 1410 (9th Cir. 1985) (adding footnote with standard of review). Moreover, the prescribers’ mitigation is included in the Humana audit along with the information of their initial denials, which is at least circumstantial evidence that Agent Valero intentionally left their later mitigation out of his affidavit. See United States v. Stewart, 3:19-CR-151, 2021 WL 1922934, at *5 (E.D. Tenn. May 13, 2021) (observing that a court often must consider “circumstantial evidence in the search warrant affidavit and surrounding circumstances to establish [the affiant’s intent]”). But even if Agent Valero intentionally or recklessly excluded the subsequent mitigation by NPs Armstrong and Bertrand with an intent to mislead, the omission is not material to probable Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 57 of 91 PageID #: <pageID>
58 cause. To determine the materiality of an omission, the Court evaluates whether the affidavit still provides probable cause considering the omitted information. Adkins, 107 F.3d at 1217 (citation omitted). Here, Agent Valero’s affidavit still contains information on prescriber denials—from the OptumRX audit, NP Travis, and as explained below, NP Manning’s assertion that a prescription she wrote was altered—to support probable cause. c. Ashley Manning Prescription Defendants also argue that Agent Valero deliberately deleted the fax transmission line from the prescription from Nurse Practitioner Ashley Manning that is reproduced in the affidavit [Doc. 115 p. 6; Doc. 151 pp. 51–52]. They allege that this prescription “contains a facsimile transmission line from Dr. Scariano’s practice” stating the date and time of transmission and that it was from “Better Health,” which Defendants allege is Dr. Scariano’s practice [Doc. 115 p. 6; Doc. 123-1 p. 5 (prescription with fax transmission line)]. Defendants argue that Agent Valero “falsif[ied]” this prescription by not including the fax transmission line nor mentioning in his affidavit that the prescription was faxed to RHP by Better Health [Doc. 115 p. 6]. They argue that this omission is material to probable cause because the affiant alleges that RHP was forging prescriptions, and the fax transmission line demonstrates that RHP received NP Manning’s prescription by fax from the provider [Doc. 151 p. 55]. The undersigned finds that despite the omission of the fax transmission line, Agent Valero’s affidavit makes clear that the prescription was faxed from NP Manning’s place of business to RHP by a member of NP Manning’s staff. The affidavit states that NP Manning stated she would choose a pain cream option from RHP’s pre-printed form, as in the example (the reproduced prescription) and that “her medical assistant (MA) would then fax the prescription over to RHP” [Doc. 119-1 ¶ 50]. Moreover, the affidavit states the reproduced prescription was sent to Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 58 of 91 PageID #: <pageID>
59 RHP because Manning pointed out the alterations to the prescription and stated that she did not recall anyone from RHP calling to request modifications to a prescription [Id. at ¶¶ 49–50]. Thus, Agent Valero did not falsely represent that the prescription by NP Manning did not exist/was forged by RHP. Nor is the omission of the fax transmission line material to probable cause when the affidavit states that NP Manning’s prescriptions were faxed to RHP by her medical assistant. 2. Scariano Prescriptions Defendants argue that Agent Valero’s statement that RHP billed for medications not prescribed by Dr. Jack Scariano for patients M.U. and R.D. is false [Doc. 89 p. 13]. Defendants state that Dr. Scariano is the target of a separate investigation for claims submitted to the EEOICP [Id. at 4, 13, 19]. They assert that the alleged missing prescriptions were faxed by Dr. Scariano’s practice to RHP [Id. at 4, 19; Docs. 119-937 & 119-1038]. Defendants maintain that Agent Valero had access to “data [showing] whether Dr. Scariano submitted E&M and CPT codes on the patients’ medical benefit[s] on the dates Agent Valero claims are not reflected” in the patients’ files [Doc. 89 p. 19]. 37 The redacted version of the prescriptions/refill authorization forms provided as Defendant Haney’s Exhibit R states the patient as M.W., rather than patient M.U. referenced in the affidavit [See Doc. 119-9]. The sealed, unredacted Exhibit R provided by Defendant Haney, however, reveals the patient is M.U. [See Doc. 91-7, SEALED]. The dates the prescriptions/refill authorizations in Exhibit R were faxed [Doc. 119-9] corresponds to the dates the affidavit alleges RHP submitted claims [Doc. 119-1 ¶ 62]. 38 The fax dates of the original prescription and one refill authorization form for patient R.D. [Doc. 119-10 pp. 2, 4] correspond to the claim dates alleged in the affidavit [Doc. 119-1 ¶ 68]. The affidavit alleges that RHP submitted a claim for a prescription with three refills allowed on April 25, 2022 [Id.]. Defendant Haney’s Exhibit S shows an authorization form for three refills for the prescription originally written on October 25, 2021, and the authorization form was faxed on April 5, 2022, not April 25, 2022, from Dr. Scariano [Doc. 119-10 p. 3]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 59 of 91 PageID #: <pageID>
60 The Government states that the attached prescriptions were in RHP’s possession and Agent Valero did not have them prior to the search [Doc. 111 p. 15]. It argues that Agent Valero could not have made a misrepresentation about faxed prescriptions of which he was unaware [Id.]. The prescriptions/refill authorization forms with fax transmission lines from Dr. Scariano’s office demonstrate that RHP received prescriptions or refill authorizations on the dates it submitted claims. Nevertheless, Defendants do not show that Agent Valero had access to or knew about these prescriptions. Thus, Defendants fail to carry their burden of showing that Agent Valero deliberately or recklessly included false information in his affidavit. Moreover, the faxed prescriptions do not contradict the agent’s assertion that patient M.U. continued to receive pain cream from RHP every thirty days long after M.U. stopped seeing Dr. Scariano [See Doc. 119-1 ¶¶ 60, 65]. Accordingly, the omission of the faxed prescriptions would be of limited materiality to probable cause if they were known to Agent Valero. 3. Kickbacks/Copay Collection Data Defendants contend that Agent Valero’s affidavit falsely states that RHP violated the Anti- Kickback Statute, 42 U.S.C. § 1320a–7b, by unlawfully waiving patient copays [Doc. 89 pp. 4–5, 13, 19–22]. They argue, however, that Agent Valero’s affidavit provides no evidence of copay waivers and, instead, merely alleges that RHP did not collect some copayments [Doc. 89 p. 14; see also Doc. 151 p. 57]. Defendants argue that a waiver is an affirmative act, and the failure to collect a copay, as alleged by Agent Valero, is not an affirmative act [Id.]. Defendants also assert that RHP’s payment system demonstrates that no copayments were due for the 62% of claims for which RHP did not collect them [Doc. 89 p. 20]. In support of this argument, Defendants point out that the two example patients noted in the affidavit each paid copays [Doc. 89 p. 21; Doc. 115 pp. 3–4]. Patient A.B. paid copays one-third of the time over a Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 60 of 91 PageID #: <pageID>
61 one-year period, and patient D.N. paid copays for nine out of sixteen prescriptions over a fourteen- month period [Doc. 89 p. 21; see also Doc. 115 p. 4].39 Defendants opine that Agent Valero misrepresented the information about copays to search for evidence that RHP was bribing providers [Doc. 89 pp. 4–5]. Defendants fail to demonstrate that the information in Agent Valero’s affidavit regarding copays is false. Agent Valero’s affidavit acknowledges that RHP collected some copays. Regarding example patient D.N., he states that D.N. recalls paying copays for some of her medication but not for the compounded pain creams [Doc. 119-1 ¶ 88(b)]. The chart provided by Defendants shows that patient D.N. paid a copay for pain cream a little more than one-half the time and not for the last six months in 2020 [Doc. 89 p. 21; see also Doc. 115 p. 4]. Agent Valero also states that patient A.B. did not recall paying a copay for pain cream [Doc. 119-1 ¶ 88(a)]. Defendants’ citation to some copays paid by patients A.B. and D.N., does not negate Agent Valero’s assertion that “[w]itnesses told agents that RHP did not collect copays from them” [Doc. 119-1 ¶ 88]. Thus, Defendants fail to show Agent Valero’s information about RHP not collecting copays is false. More importantly, the data provided by Defendants regarding copays collected from A.B. and D.N. supports Agent Valero’s assertion that a review of RHP’s payment system shows that RHP did not collect copays for two-thirds of the prescriptions and refills for a pain cream (“keto 10/1mit2/diclo1%”) for patients with Medicare. Defendants’ chart shows that A.B. did not pay a 39 Defendant Roper states that NP Manning told agents that some patients did not want to pay the $40 copay charged by RHP, which Roper argues contradicts Agent Valero’s statement in the affidavit that RHP failed to collect copays [Doc. 165 p. 6, 8 (citing 165-1 (Mar. 20, 2024 FBI Interview of Ashley Manning))]. Defendant Roper also points out that the Humana audit stated that all patients with a copay paid it [Id. at 8 (citing Doc. 89-9 p. 4 (analyzing sample of 30 prescriptions))]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 61 of 91 PageID #: <pageID>
62 copay two-thirds of the time and that D.N. did not pay a copay a little less than one-half of the time. In other words, this data shows RHP did not occasionally waive copays for this pain cream. It shows it did so regularly. Defendants also assert that Agent Valero’s affidavit misrepresents the law regarding copays because, while Medicare requires pharmacies to collect copays, the OIG permits providers to waive copays based upon an assessment of the individual’s financial circumstances so long as those waivers are not routine, are not advertised, and are made after a good-faith, individualized assessment [Doc. 89 p. 20 (citing HHS-OIG website)]. But Agent Valero alleged that RHP waived copays on approximately two-thirds of all claims for one type of pain cream for which it sought reimbursement from Medicare [Doc. 119-1 ¶ 86]. Thus, Agent Valero is alleging routine waiver of copays, and the exception raised by Defendants would not apply. Moreover, as argued by the Government [Doc. 111 p. 15], a reviewing court is obliged to evaluate the issuing judge’s probable cause finding in a “commonsense,” rather than “hypertechnical” manner and to “resol[ve] doubtful or marginal cases [in line with] the preference to be accorded to warrants.” United States v. Ventresca, 380 U.S. 102, 109 (1965) (citation omitted). Here, Defendants’ citation to an exception permitting providers to waive copays does not persuade the undersigned that Agent Valero’s statements regarding copays are false, much less deliberately or recklessly so. Defendants therefore fail to show that Agent Valero’s affidavit contains any false statements or material omissions regarding RHP’s failure to collect copays. Finally, Defendants argue that the mere failure to collect copays, as opposed to the affirmative act of waiving them, does not amount to probable cause that RHP violated the Anti- Kickback Statute [Doc. 148 pp. 4–5]. The Anti-Kickback Statute, 42 U.S.C. § 1320a-7b establishes Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 62 of 91 PageID #: <pageID>
63 criminal penalties for acts involving federal health care programs. The Act prohibits, in pertinent part, “illegal remunerations”: (1) Whoever knowingly and willfully solicits or receives any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind— (A) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or (B) in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care program, shall be guilty of a felony[.] 42 U.S.C. § 1320a-7b(b)(1)(A)–(B). The statute expressly excepts “the waiver or reduction by pharmacies . . . of any cost-sharing imposed under part D of subchapter XVIII, if the conditions described in clauses (i) through (iii) of section 1320a-7a(i)(6)(A) of this title are met with respect to the waiver or reduction” or for a “a subsidy eligible individual . . . without regard to clauses (ii) and (iii) of that section)[.]” Id. § 1320a-7b(b)(3)(G). Clauses (i) through (iii) exclude from the definition of “remuneration” the waiver of a copay if (1) “the waiver is not offered as part of any advertisement of solicitation;” (2) the entity “does not routinely waive” copays; and (3) the entity only waives the copay “after determining in good faith that the individual is in financial need; or . . . fails to collect [the copay] after making reasonable collection efforts[.]” Id. § 1320a-7a(i)(6)(A)(i)–(iii). Here, Agent Valero’s affidavit provides probable cause for a violation of the Anti- Kickback Statute by showing that RHP routinely (approximately two-thirds of the time over a four-years-and-four-month period for a specific pain cream) did not collect copays for Medicare Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 63 of 91 PageID #: <pageID>
64 patients [Doc. 119-1 ¶¶ 85–86; see also id. ¶¶ 27–28 (Medicare requires a pharmacy to collect copays)]. He alleges that Medicare paid RHP $3,274,400.34 for the 2,191 claims for this pain cream on which RHP collected no co-pay [Id. ¶87]. Defendants argue that the affidavit fails to show that RHP affirmatively waived these copays. But the Anti-Kickback Statute expressly states that actual knowledge or specific intent by the entity is not required. 42 U.S.C. § 1320a-7b(h) (“With respect to violations of this section, a person need not have actual knowledge of this section or specific intent to commit a violation of this section.”). Finally, the agent states that RHP keeps records and receipts from the prescriptions it fills at his premises [Doc. 119-1 ¶¶ 16, 35]. Accordingly, the affidavit provides probable cause to believe that evidence of Defendants’ violations of the Anti-kickback Statute would be found on the premises of RHP. Accordingly, Agent Valero’s affidavit contains no false statements or material omissions regarding RHP’s failure to collect copays and it provides probable cause to search for evidence of the violation of the Anti-Kickback Statute. 4. Impact of Multiple Omissions Defendants argue that setting aside the false statements and omissions, the remaining information in Agent Valero’s affidavit “appl[ies] equally to law-abiding businesses and people” and does not provide probable cause to search RHP [Doc. 115 p. 7]. According to Defendants, the prescriber denials show nothing more than the providers did not prescribe the medications for which RHP billed but do not show that RHP was at fault [Id. at 7–8]. They contend that Agent Valero omitted material information that “APS was under government monitorship for years [and that n]umerous witnesses had told the government about APS’[s] noncompliance” [Id. at 8]. Defendants contend the information that prescriptions were missing from Dr. Scariano’s patient Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 64 of 91 PageID #: <pageID>
65 files is of no import considering the omitted fact that RHP received faxed copies of these prescriptions from Dr. Scariano’s practice [Id. at 9]. Defendants also assert that the Medicare and Medicaid data, considered in isolation, is “meaningless” because anomalies in data are frequently explained by innocent facts, such as a pharmacy’s location or the types of patients served [Id.]. Here, they argue the fact that RHP billed Medicare for a certain product only shows that Medicare covered that product, and that RHP switched to a different product when Medicare stopped reimbursing for the first is the same business practice that any pharmacy would employ [Id.]. Defendants also argue that Sydney Goodson, a former cashier at RHP, does not state that RHP did anything wrong [Id. at 9–10]. They assert that “test claims” are routine and necessary to determine whether a medication is covered by a patient’s plan, and, additionally, Agent Valero did nothing “to refresh” the three-year-old information from Ms. Goodson [Id. at 10]. Finally, Defendants allege RHP’s marketing efforts are permissible, and a patient’s annoyance with text messages for refills is unremarkable [Id.]. They maintain that neither support probable cause [Id.]. They state the Government conceded that the suspicious activity report does not alone subject RHP to a search [Id. at 11; see Doc. 111 p. 10 n.3 (“The Government concedes for the purpose of this case that the submission of a Suspicious Activity Report is not a proper basis for evaluating probable cause.”)]. Thus, Defendants argue that setting aside the false statements and factoring in the critical omissions, the affidavit fails to establish probable cause for healthcare fraud or a violation of the Anti-Kickback Statute [Doc. 148 pp. 2–4]. To start, Defendants fail to make a substantial preliminary showing that Agent Valero’s affidavit contains any false statements. The undersigned finds only one omission—the mitigation by NP Armstrong and NP Bertram of their prior denials in connection with the Humana audit— Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 65 of 91 PageID #: <pageID>
66 but also finds Defendants fail to carry their burden of showing this omission is material when considered along with the other provider denials in the affidavit. Even if the Court were to consider collectively the suspicions regarding APS staff and management altering or forging prescriptions, the mitigation by NPs Armstrong and Bertram, the omitted fax submission line on the NP Manning prescription, and the faxed prescriptions from Dr. Scariano’s patients—none of which the undersigned finds to be material omissions individually—Defendants still fail to make the requisite showing to warrant a Franks hearing. Specifically, even considering these omissions, Agent Valero’s affidavit still shows that multiple providers from multiple practices denied writing prescriptions for compounded medications filled at RHP. NP Manning stated that a prescription her practice faxed to RHP was altered in someone else’s handwriting, and she did not authorize RHP to modify her prescriptions. Dr. Scariano’s patient M.U. continued to receive monthly refills of a pain cream from RHP years after M.U.’s last appointment with Dr. Scariano. Agent Valero, based on his training and experience, stated that pharmacies benefit financially from submitting forged prescriptions or altering prescriptions to substitute higher-reimbursed drugs or to include refills. The affidavit also shows that former RHP employee Sydney Goodson stated Defendants Haney, Warren, and Roper submitted test claims to discover which ingredients afforded the maximum reimbursement. She also described RHP’s marketing lunches with providers to promote their “pain contracts,” and providers with pain contracts prescribed RHP’s pain creams regardless of medical necessity. RHP’s website promoted “Lunch & Learn” opportunities for providers. Ms. Goodson said RHP also used pre-printed prescription forms to encourage physicians to send patients to RHP for pain creams. Agent Valero stated that in his experience, pre-printed prescription forms are not common in legitimate medicine. According to Ms. Goodson, Defendant Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 66 of 91 PageID #: <pageID>
67 Roper would place patients on automatic refills for pain creams even if not requested. Patient G.T. received monthly text messages from RHP for refills for several years after Dr. Scariano stopped prescribing the pain cream at his request and after he repeatedly declined the refills. In addition, data analysis of RHP’s claims for Medicare reimbursement show a large number of claims for a high-reimbursement pain creams for patients with Medicare and only minimal claims for other payors for this same pain cream. Similarly, RHP sought reimbursement from Medicaid/TennCare for high-reimbursement rectal kits until Medicaid began rejecting those claims, and then RHP began submitting claims for a different high-reimbursement pain cream. RHP failed to collect patient copays for two-thirds of the prescriptions and refills for a pain cream for which it made Medicare claims over a four years and four months. In sum, Agent Valero’s affidavit provides probable cause for the search of RHP even considering Defendants’ alleged omissions. Accordingly, Defendants fail to make the requisite substantial preliminary showing required for a Franks hearing as to Agent Valero’s affidavit. 5. Seizure Warrants Defendants allege the same false statements and material omissions require a Franks hearing regarding the seizure warrants [Doc. 89 pp. 5, 24–25, 27]. They argue that the evidence of misrepresentations on provider denials and Dr. Scariano’s patient files is even stronger in Agent Celeste’s affidavit [Id. at 24–25]. Regarding provider denials, Defendants contend that following the search of RHP, law enforcement interviewed APS provider Miranda Day on August 27, 2024, and she stated that APS management assigned the responsibility of signing patients up for pain creams to Felisha Livesay, a “‘helper’” at APS with no medical training, and some of the APS providers thought this was odd [Id. at 24 (quoting Doc. 119-13 p. 3)]. Defendants also point to a second interview of Felisha Livesay on August 20, 2024, in which Livesay stated that once the Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 67 of 91 PageID #: <pageID>
68 providers signed the blank RHP formulary sheets, she circled the ingredients that the providers wanted on the formulary sheet based on instant messages from the providers and then faxed it to RHP using SRfax [Doc. 89 p. 24 (citing Doc. 119-14 p. 5)]. Defendants contrast Livezey’s statement with a statement by APS consultant Jimmy Cowden, who said APS did not have an instant messaging system [Id. at 25 (citing 89-11 p. 3)]. Defendants point out that Agent Celeste’s affidavit contains prescriptions from OptumRx’s 2020 audit file that were faxed to RHP, which shows that the prescriber denials in Agent Valero’s affidavit are false [Doc. 89 p. 25; see 119-2 ¶ 42]. They also contend that Agent Celeste’s affidavits relies on the same information regarding Dr. Scariano’s patients M.U. and R.D. but omits that Dr. Scariano’s office faxed prescriptions for those two patients to RHP [Doc. 89 p. 27 (citing the faxed prescriptions in 119-9 & 119-10)]. As with Agent Valero’s affidavit, Defendants fail to demonstrate that Agent Celeste made any false statements. Defendants acknowledge that Agent Celeste’s affidavit contains the faxed prescriptions for the OptumRx prescriber denials. Agent Celeste’s affidavit also states that two providers from the Humana audit mitigated their denials [Doc. 119-2 ¶ 124]. But, even considering Defendants’ remaining alleged omissions (that providers suspected the APS staff and management were altering prescriptions and that that Manning’s prescription and the prescriptions for M.U. and R.D. were faxed to RHP), Agent Celeste’s affidavit contains ample probable cause that proceeds of health care fraud from the five categories were deposited in RHP’s operating accounts [Doc. 119-2 ¶¶ 36–182]. Specifically, Agent Celeste alleges that RHP filled prescriptions for Lidocaine-HC rectal kits when all the providers interviewed (approximately half of the forty-eight providers for whom RHP filled prescriptions for rectal kits between September 2018 and March 2020) denied prescribing the rectal kits [Id. ¶¶ 44–48]. Agent Celeste documented numerous prescriptions for Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 68 of 91 PageID #: <pageID>
69 RHP owners, employees, and their family members, which the providers denied prescribing or, in some cases, the providers denied even ever treating the individuals [Id. ¶¶ 55–105]. Regarding the RHP pre-printed formulary prescriptions, Agent Celeste demonstrated the ingredients or types of compounded medications (the “options”) selected by the providers were changed [id. ¶¶ 109–118] and that steroids and other medications were added to the pain creams when the providers did not authorize the additions [id. ¶¶ 109–111, 119–130]. Finally, Agent Celeste provided information that individuals at RHP forged prescriptions for Dr. Scariano and provider M.F., who worked at his office [Id. ¶¶ 131–76]. Hence, Defendants fail to carry their burden of demonstrating that Agent Celeste omitted material information from her affidavit that would impact probable cause. The undersigned therefore finds that Defendants fail to make a substantial preliminary showing to warrant a Franks hearing on Agent Celeste’s affidavit. Defendants also assert that, setting aside any false statements and material omissions, Agent Celeste’s affidavit does not provide probable cause that all funds seized were traceable to the five categories of alleged fraud and that the Government has “‘extrapolate[d]’ from discrete, allegedly fraudulent prescriptions to seize ‘buckets’ of all claims around five different categories of purportedly ‘altered or forged’ prescriptions” [Doc. 89 pp. 25–26; Doc. 165 p. 14]. They argue that although Agent Celeste claims that providers denied authorizing an alternative formulary option or adding a steroid, she fails to recognize that in “nearly all” of the prescriptions relating to prescriber denials permitted substitutions [Doc. 89 p. 26]. Defendants contend that Agent Celeste’s assertions that the various prescriptions were not “authorized” does not amount to probable cause that specific prescriptions were not authorized or forged [Id. at 26–27]. As an example, Defendants assert that Agent Celeste acknowledges that Dr. Scariano’s office manager, C.S., authorized Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 69 of 91 PageID #: <pageID>
70 prescriptions in writing and orally [Doc. 89 p. 27; see Doc. 119-2 ¶¶ 138, 139, 144]. They contend Agent Celeste’s remaining “limited arguments” [see Doc. 119-2 ¶¶ 165 (RHP filled prescription for patient on day he died), 172 (RHP photocopied an earlier prescription for later use)] for the DOL EEOIC claims do not permit the FBI to seize all funds paid to RHP by the DOL EEOIC [Doc. 89 p. 27]. The undersigned disagrees that Agent Celeste’s affidavit lacks probable cause for seizing all funds from Defendants’ bank accounts and investment accounts and their vehicles and watercraft. Agent Celeste’s affidavit states Defendants’ assets are properly seized because they were purchased or funded in whole or in part by moneys “involved in” money laundering activity under 18 U.S.C. § 1957 [Doc. 119-2 ¶¶ 7 (stating that, “in addition to the directly traceable portion of health care proceeds to the [seized property] there is also probable cause to believe that the entirety of the [seized property] are involved in money laundering activity in violation of 1957 and as such are subject to seizure pursuant to 18 U.S.C. § 981(b) and 21 U.S.C. § 853(e) and (f) by 18 U.S.C. § 982(b)(1); and forfeiture pursuant to 18 U.S.C. §§ 982(a)(1), 981(a)(1)(A), and 981(a)(1)(C)”), 188–191 (discussing § 1957 and transactions allegedly in violation thereof), 226–228 (citing criminal forfeiture statutes and basis for seizure, including that property was “involved in” money laundering transactions in violation of § 1957)]. Money laundering under § 1957 “criminalizes moving around at least $10,000 in criminal proceeds for any purpose through a financial institution.” United States v. Kratt, 579 F.3d 558, 561 (6th Cir. 2009). “Money laundering forfeiture is required for all property ‘involved in’ the crime, which can include clean or legitimate money that is comingled with tainted money derived from illicit sources.” United States v. Coffman, 859 F. Supp. 2d 871, 875–76 (E.D. Ky. 2012)) (explaining two ways that “clean money can be involved in a money laundering offense and subject to forfeiture”), aff’d, Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 70 of 91 PageID #: <pageID>
71 574 F. App’x 541 (6th Cir. 2014). Here, Agent Celeste’s affidavit shows that Defendants moved funds from RHP’s operating accounts, which contained the proceeds of the five alleged schemes, into their bank accounts, and from there, into investment accounts, vehicles, and watercraft [See, e.g., Doc. 119-2 pp. 115–116 (showing diagrams of financial transfers)]. Accordingly, Agent Celeste’s affidavit provides probable cause to support the seizure of all funds from Defendants’ bank accounts and investment accounts and their vehicles and watercraft. C. Search of Cell Phones and Seizure of Documents from RHP During the execution of the search warrant at RHP, agents seized the personal cell phones of Defendants Haney, Warren, and Roper, and extracted the data from their phones on site. Defendants argue that the data seized from their cell phones must be suppressed because (1) the cell phones were improperly seized outside the scope of the search warrant [Doc. 165 p. 10; Doc. 177 p. 2; Doc. 179 pp. 1–2]. Alternatively, they contend that Agent Valero’s affidavit does not provide probable cause to seize or search employees’ cell phones because it fails to provide facts about the use of cell phones to further the alleged crimes [Doc. 177 pp. 2–3; see also Doc. 165 p. 10]. Finally, at the August 12, 2025 hearing, Defendants Roper and Haney argued that the agents’ seizure of all prescriptions from RHP was overly broad because Agent Valero’s affidavit only shows some prescriptions were altered or forged [Doc. 195 pp. 80–81, 97]. The Government responds that the search warrant for RHP expressly permits the seizure of mobile phones and that the agents seized and extracted data from Defendants’ cell phones in good faith [Doc. 175]. It contends that Defendants’ new allegation that documents seized from RHP are also outside the scope of the search warrant was not raised in their suppression motion or request to join [Doc. 195 p. 94]. Nevertheless, it responds that Agent Valero’s affidavit clearly Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 71 of 91 PageID #: <pageID>
72 establishes fraud at RHP and that evidence of that fraud would be found in electronic and paper records on the premises [Id. at 95]. The undersigned finds the seizure and search of Defendants’ cell phones was within the scope of the search warrant for RHP, but that Agent Valero’s affidavit lacks a probable cause nexus that evidence of the alleged crimes would be located on the personal cell phones of the owners and employees. Despite this Fourth Amendment violation, suppression of the data extracted from the cell phones is not warranted because the agents executed the search warrant in good faith. As for whether the search warrant permitted the seizure of all prescriptions stored at RHP, the undersigned finds that it does. 1. Cell Phones Defendants argue that the search warrant for RHP did not permit the seizure of their personal cell phones [Doc. 165 pp. 10, 12–13; Doc. 177 p. 3; Doc. 179 p. 2]. They assert that the search of the contents of a cell phone, including text messages, requires a search warrant because cell phones contain the “‘privacies of life’” [Doc. 165 pp. 10–11 (quoting Riley, 573 U.S. at 403), 13]. They maintain that even if agents permissibly seized the cell phones, a search warrant was required to search them [Doc. 165 p. 12]. Defendants assert that the executing agents exceeded the scope of the search warrant when they searched the personal cell phones of the owners and employees [Id. at 14]. a. Particularity Officers seeking to search the contents of a cell phone must have a search warrant. Riley, 573 U.S. at 400. The Fourth Amendment requires that a search warrant describe the items to be seized “with particularity to prevent the seizure of one thing under a warrant describing another[.]” United States v. Richards, 659 F.3d 527, 536–37 (6th Cir. 2011) (citation omitted). “‘The chief Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 72 of 91 PageID #: <pageID>
73 purpose of the particularity requirement [is] to prevent general searches by requiring a neutral judicial officer to cabin the scope of the search to those areas and items for which there exists probable cause that a crime has been committed.’” United States v. Chaney, 921 F.3d 572, 581 (6th Cir. 2019) (quoting Richards, 659 F.3d at 537 (alteration in original)). Search warrants can be insufficiently particular in two ways: (1) by failing to be specific enough to guide the officer in what to seize or (2) by “overbreadth,” i.e., including items that should not be seized. Id. (citing Richards, 659 F.3d at 537). “[T]he crime involved and the types of items sought” dictate the amount of specificity required in the warrant. Id. (citations omitted). Defendants first contend that the search warrant for RHP does not permit the seizure of the personal cell phones of owners and employees. As argued by the Government [Doc. 175 p. 3], however, the search warrant for RHP expressly reaches mobile phones of the owners or employees on the premises. Attachment A to the search warrant permits the search of the premises of RHP [Doc. 119-1 p. 42]. Attachment B to the search warrant permits the seizure and search of “all records” relating to violations of the target offenses (health care fraud, attempt and conspiracy to commit healthcare fraud, false statements relating to healthcare matters, conspiracy to pay and receive health care kickbacks, and violations of the Anti-Kickback Statute) involving RHP, its owners, and its employees from August 1, 2018 through the present [Id. at 43]. Attachment B specifies eleven categories of “[r]ecords and information” that agents can seize, including “[r]ecords and information relating to the identity of persons who . . . communicated with [RHP] and its owners and employees about matters related to the Target Offenses” and “[r]ecords and information related to communications with patients regarding prescription refills” [Id. at 43–44]. Attachment B defines “records” and “information” to include “any form of computer or electronic storage” and further defines “computer” to include “mobile phones” [Id. at 44]. These provisions Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 73 of 91 PageID #: <pageID>
74 show that the search warrant permits the search of Defendants’ cell phones for the eleven categories of records. Defendants protest that even if the search warrant permits seizure and search of cell phones, it applies only to business phones and not the personal cell phones of the owners or employees [Doc. 195 pp. 71–72]. They assert the agents could not reasonably believe that records from the eleven categories would be on the personal cell phones of the employees [Id. at 72, 74]. The Government responded that the attachment includes mobile phones present at the pharmacy and does not distinguish between business and personal phones [Id. at 85]. It denied that the search warrant permitted the seizure of a customer’s cell phone, even if the customer was on the premises at the time of the search, because “there’s no reason to think that customers would have records of communications with the owners or employees [on their] phones” [Id.]. The Government also asserted that as owners and employees, Defendants were closely tied to the pharmacy and, thus, closely tied to the fraud at the pharmacy [Id.]. Moreover, noting that the affidavit reflects that Defendant Haney, Defendant Roper, and employee Tabitha Roper are sisters, the Government argued the agents could reasonably assume that as both coworkers and family, communications about issues relating to the pharmacy would be on their phones [Id. at 91]. “Particularity is required to prevent ‘general order[s] to explore and rummage’ and avoid ‘the danger of unlimited discretion in the executing officer’s determination of what is subject to seizure.’” United States v. Honeysucker, No. 21-2614, 2023 WL 142265, at *4 (6th Cir. Jan. 10, 2023) (quoting United States v. Greene, 250 F.3d 471, 476–77 (6th Cir. 2001)). Generally, a “‘warrant that empowers police to search for something satisfies the particularity requirement if its text constrains the search to evidence of a specific crime.’” Id. (quoting United States v. Castro, 881 F.3d 961, 965 (6th Cir. 2018)) (holding that a search warrant restricting law enforcement to Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 74 of 91 PageID #: <pageID>
75 search defendant’s cell phone for evidence of a specific crime during a specific time frame was sufficiently specific to restrain the executing officer’s discretion). Here, the search warrant limited the seizure of records both temporally (from August 1, 2018 to the present) and to records relating to violations of the target offenses [Doc. 119-1 p. 43]. Attachment B also expressly focuses on records of the involvement of the pharmacy and “its owners and employees” in the target offenses [Id.]. Additionally, executing officers are directed to search for “communications” between the owners or employees and other persons “about matters related to the target offenses” [Id. at 43–44]. These limitations satisfy the particularity requirement by constraining the search to the target offenses being investigated. Moreover, because the officer is seeking the communications of the owners and employees, the search warrant would not permit the seizure of the cell phone of anyone on the premises at the time of the search. In other words, a customer’s cell phone would not fall within the ambit of the search warrant.40 Thus, the Defendant’s personal cell phones are within the scope of the search warrant. Defendants next argue that if the search warrant permits the search of the owners’ and employees’ personal cell phones, then the search warrant is overly broad [Doc. 195 pp. 78–79]. They deny that the search warrant is “narrowly tailored” [Doc. 165 p. 10] or that Attachment B is 40 In evaluating the sufficiency of the search warrant’s particularity, the undersigned declines to consider information set forth in only the affidavit, such as the fact that an owner and employees were related, because here the affidavit was not incorporated in the search warrant. See United States v. Blakeney, 942 F.2d 1001, 1024 (6th Cir. 1991) (“A search warrant may be construed with reference to a supporting affidavit if the affidavit accompanies the warrant and the warrant incorporates the affidavit by reference.” (citation omitted)); see also Groh v. Ramirez, 540 U.S. 551, 557 (2004) (“The Fourth Amendment by its terms requires particularity in the warrant, not in the supporting documents.”). As noted above, the search warrant for RHP remains sealed [No. 3:24-MJ-1095, Doc. 6, SEALED]. The undersigned has reviewed the search warrant, and it does not incorporate the affidavit in describing the items to be seized [Id.]. Instead, for the description of the items to be seized, the search warrant states “Please see Attachment B which is attached hereto and fully incorporated herein” [Id.]. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 75 of 91 PageID #: <pageID>
76 as specific as possible under the circumstances, contending that Agent Valero knew the owners and employees and could have specified their cell phones in the attachment [Doc. 195 pp. 78–79]. “[T]he degree of specificity required [in a search warrant] is flexible and will vary depending on the crime involved and the types of items sought.” United States v. Greene, 250 F.3d 471, 477 (6th Cir. 2001) (citing United States v. Ables, 167 F.3d 1021, 1033 (6th Cir. 1999)). “[W]hen the scheme under investigation is complex, a warrant authorizing the seizure of a lengthy list of records is sufficiently particular.” United States v. Ataya, No. 15-20351, 2016 WL 641343, at *6 (E.D. Mich. Feb. 18, 2016) (citations omitted) (upholding search warrant for medical files and other listed documents and electronic records and devices for evidence of conspiracy to commit health care fraud and to pay and receive illegal kickbacks); see also Chaney, 921 F.3d at 581 (6th Cir. 2019) (concluding that a search warrant for a medical clinic permitting seizure of all patient files that were evidence of violations of the target offenses was sufficiently particular). That is the case here: the scheme alleged is complex. And the description of the items to be seized was “directed toward items likely to provide information concerning [Defendants’] involvement in the alleged conspirac[y].” Ataya, 2016 WL 641343, at *7 (explaining that the affiant “‘could not have known at the time he applied for the warrant what precise records and files would contain information’ concerning the alleged health care fraud conspiracy and the alleged conspiracy to pay and receive kickbacks” (citation omitted)); see also United States v. Bass, 785 F.3d 1043, 1049–50 (6th Cir. 2015) (affirming particularity of search warrant to search cell phone for “records of communication” and other records that are evidence of identity theft because at time of seizure, “officers could not have known where this information was located in the phone or in what format”); United States v. Evers, 669 F.3d 645, 652 (6th Cir. 2012) (finding seizure of the defendant’s home computer and digital media for off-site search is not overbroad if probable Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 76 of 91 PageID #: <pageID>
77 cause exists for “‘finding some needles [of evidence of the crimes] in the computer haystack’” (quoting United States v. Upham, 168 F.3d 532, 535 (1st Cir. 1999))). Accordingly, the undersigned finds Attachment B is sufficiently specific given the target offenses involved, and the nature of the records sought. Thus, the undersigned finds that the Defendants’ cell phones come within the scope of the search warrant and the degree of specificity in Attachment B comports with the particularity requirement of the Fourth Amendment. b. Nexus Defendants argue that Agent Valero’s affidavit did not provide a basis to search the personal cell phones of the owners or employees [Doc. 195 pp. 73, 80, 97]. To satisfy the requirements of the Fourth Amendment, a search warrant must be based on an affidavit containing “particularized facts” that demonstrate “a fair probability that evidence of a crime will be located on the premises of the proposed search.” United States v. McPhearson, 469 F.3d 518, 524 (6th Cir. 2006) (quoting United States v. Frazier, 423 F.3d 526, 531 (6th Cir. 2005)). “To justify a search, the circumstances must indicate why evidence of illegal activity will be found ‘in a particular place.’” United States v. Carpenter, 360 F.3d 591, 594 (6th Cir. 2004) (en banc). In other words, probable cause requires a “nexus between the place to be searched and the evidence sought.” Id. (quoting United States v. Van Shutters, 163 F.3d 331, 336–37 (6th Cir. 1998)). “The connection between the [location] and the evidence of criminal activity must be specific and concrete, not ‘vague’ or ‘generalized.’” United States v. Brown, 828 F.3d 375, 382 (6th Cir. 2016) (quoting Carpenter, 360 F.3d at 595). Assessing whether an affidavit establishes a nexus turns upon the facts of a particular case and requires examination of the totality of the circumstances. Id. The court must determine “‘whether the [issuing judge] had a substantial basis for finding that Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 77 of 91 PageID #: <pageID>
78 the affidavit established probable cause to believe that the evidence would be found at the place cited.’” United States v. Merriweather, 728 F. App’x 498, 504 (6th Cir. 2018) (quoting United States v. Davidson, 936 F.2d 856, 859 (6th Cir. 1991)). To permit the search of a cell phone, the affidavit must generally provide some information that the cell phone was used in connection with the crime. United States v. Ramirez, 180 F. Supp. 3d 491, 495–96 (W.D. Ky. 2016) (determining that nexus was insufficient when the affidavit contained no information that the defendant used his cell phone as a tool of drug trafficking); see, e.g., United States v. Tanzil, No. 23-20654, 2025 WL 18642, at *3 (E.D. Mich. Jan. 2, 2025) (finding no nexus between the defendant’s cell phone and the alleged shooting where “[t]he affidavits here did not contain any allegations stating the phone was used during the alleged offenses or that it was used to store evidence of the offenses[, or ] . . . information regarding the GPS ping data showing that the phone was in the area of the shooting”) (appeal filed on Jan. 31, 2025). Cf. Bass, 785 F.3d at 1049 (finding a nexus to drug trafficking when the affidavit alleged that a defendant and his coconspirators frequently communicated by cell phone and that the defendant was using his cell phone at the time he was arrested). The undersigned finds the affidavit does not provide a nexus between Defendants’ cell phones and healthcare fraud or violations of the Anti-Kickback Statute. The affidavit contains no references to the owners or employees of RHP using their personal cell phones to conduct business at RHP. The affidavit twice mentions communications by telephone call or text. Agent Valero states that a former employee told agents Defendant Roper “call[ed] patients to see if they wanted refills, and if they did not answer, she would place them on automatic refills for pain creams” [Doc. 119-1 ¶ 78]. Agent Valero also states that Dr. Scariano’s patient G.T. received monthly text messages from RHP about refills over several years after Dr. Scariano stopped prescribing the pain Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 78 of 91 PageID #: <pageID>
79 cream [Id. ¶ 82]. G.T. provided agents a screenshot of the refill text message that he had received on February 2, 2024, just before the interview [Id. ¶ 82–84]. The text message states that it is from RHP; contains a telephone number at the top of the message, ostensibly from the sender; provides instructions for texting regarding receiving or declining a refill or for receiving “automatic refills from now on”; and provides a different telephone number to call if the patient wants the refill within 48–72 hours [Id. ¶ 84]. Agent Valero does not state that Defendant Roper used her personal cell phone to call or text patients about refills, nor does it identify the two telephone numbers appearing in the screen shot as the number for any employee’s cell phone. Accordingly, the undersigned finds that the affidavit fails to provide a nexus between the personal cell phones of RHP’s owners and employees and evidence of healthcare fraud or not collecting copayments. Our appellate court “has not decided whether the requisite probable cause nexus for a warrant to search a cell phone is only ‘a fair probability’ that ‘the phone’s data “will aid in a particular” investigation and disclose evidence of criminal activity’ or if, instead, the affidavit must make factual allegations that ‘the phone itself is being used “in connection with criminal activity.”’” United States v. Rolling, No. 23-1045, 2024 WL 4512532, at *3 (6th Cir. Oct. 17, 2024) (quoting United States v. Sheckles, 996 F.3d 330, 338 (6th Cir. 2021)), cert. denied, 145 S. Ct. 2721 (2025). The nexus here is insufficient under either standard. As stated above, the affiant does not allege that Defendants used their personal cell phones as part of their work at RHP. Nor does the affiant state that in his experience in investigating healthcare fraud, evidence would be on personal cell phones. The affiant’s assertion that RHP stores records electronically does not create a fair probability that the personal cell phones of RHP’s owners and employees will contain evidence of the alleged crimes. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 79 of 91 PageID #: <pageID>
80 For these reasons, the undersigned finds Agent Valero’s affidavit does not provide a nexus between Defendants’ cell phones and the target offenses. c. Good Faith “[J]udicial suppression is inappropriate when an officer conducts a search in ‘objectively reasonable reliance’ on a warrant later deemed to be invalid.” United States v. Neal, 106 F.4th 568, 572 (6th Cir. 2024) (quoting United States v. Leon, 468 U.S. 897, 922 (1984)); see also United States v. Herring, 555 U.S. 135, 141–42 (2009) (rejecting automatic exclusion of evidence and, instead, asking whether exclusion will provide “appreciable deterrence”). This is because “‘[p]enalizing the officer for the [judge’s] error, rather than his own, cannot logically contribute to the deterrence of Fourth Amendment violations.’” United States v. White, 874 F.3d 490, 505–06 (6th Cir. 2017) (quoting Leon, 468 U.S. at 921); see also Neal, 106 F.4th at 572 (observing that when the affidavit lacks probable cause, “the authorizing judge—not the officer—is the blameworthy party”). “When the good-faith exception applies, courts will not suppress evidence of a search if ‘officers act[ed] in objectively reasonable reliance on a search warrant that is subsequently invalidated.’” United States v. Nobel, No. 24-5972, 2025 WL 1410331, at *2 (6th Cir. May 15, 2025) (quoting Laughton, 409 F.3d at 748). The good-faith exception is limited in scope and “does not apply when an officer executing a search warrant relies on a warrant affidavit ‘so lacking in indicia of probable cause as to render official belief in its existence entirely unreasonable.’” Id. (quoting Leon, 468 U.S. at 923). Officers cannot in good faith rely on a “bare bones” affidavit. Id. (citing White, 874 F.3d at 496). “[B]are bones affidavits nakedly assume or vaguely conclude, without attempting to demonstrate why, probable cause has been satisfied.” Sanders, 106 F.4th at 468. Bare bones affidavits contain no facts in support of probable cause and provide only the affiant’s “mere guess” that contraband or Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 80 of 91 PageID #: <pageID>
81 evidence will be found in the location to be searched. Nobel, 2025 WL 1410331, at *2 (quoting White, 874 F.3d at 496). In contrast, “[s]ome modicum of evidence, however slight[, ]between the criminal activity at issue and the place to be searched” will support an officer’s good-faith belief in the existence of probable cause. United States v. McCoy, 905 F.3d 409, 416 (6th Cir. 2018) (quoting White, 874 F.3d at 496); see also Sanders, 106 F.4th at 469 (same). Here, Agent Valero’s affidavit is not bare bones as to the search of the premises. As discussed above, Agent Valero’s forty-page affidavit provides ample probable cause to believe that evidence of health care fraud, making false statements in relation to health care matters, and violations of the Anti-Kickback Statute would be in the records on RHP’s premises, which include electronic records. Agent Valero’s affidavit asks to search for records on the premises “in whatever form they are found” to include paper records and “data stored on a computer’s hard drive or other storage media” [Doc. 119-1 ¶ 90]. In addition, he states that an RHP pharmacy technician called patients to ask about refills and that a patient received monthly texts from RHP regarding refills [Id. ¶¶ 78, 83–84]. The two references to the use of phones in procuring patient refills, including the unauthorized refills for G.T., in combination with the affidavit’s request to search records on the premises in whatever form including “other storage media” provide a slim “modicum” of evidence linking the evidence sought and the Defendants’ cell phones on the premises. Thus, the executing agents’ belief that the Defendants’ cell phones would contain evidence of the target offenses is more than a mere guess. See United States v. Merriweather, 728 F. App’x 498, 506 (6th Cir. 2018) (applying the good-faith exception to search of a cell phone where the affidavit stated cell phones were used to arrange two drug purchases from the defendant and defendant’s cell phone was found in a vehicle containing illegal drugs); Rolling, 2024 WL 4512532 at *4 (applying the good-faith Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 81 of 91 PageID #: <pageID>
82 exception to search of cell phone where the affidavit “contained factual allegations that [the defendant’s] car and [the defendant] himself had been connected to several robberies committed with another person and that the phone had been found in the car” (citation omitted)); United States v. Levallis, 515 F. Supp. 3d 686, 693–94 (E.D. Mich. Jan. 27, 2021) (applying good-faith exception to search of cell phone when affidavit contained a statement of the affiant’s training and experience about the use of cell phones to facilitate drug trafficking and illegal possession of firearms and stated defendant was present with others—all carrying cell phones—when they received a package containing drugs and defendant possessed an illegal firearm while they transported the package). Accordingly, the executing officers seized and searched Defendants’ cell phones in good faith. Defendants argue the good faith exception does not apply because Agent Valero included false statements and misrepresentations in his affidavit [Doc. 195 p. 95]. While Leon excludes from the good faith exception cases in which the issuing judge “was misled by information in an affidavit that the affiant knew was false or would have known was false except for his reckless disregard of the truth,” Leon, 468 U.S. at 923, here, the undersigned finds no false statements or material misrepresentations occurred. Similarly, Defendants contend that Agent Valero assisted in the execution of the search warrant and therefore knew the affidavit did not authorize the search of personal cell phones [Id. at 95, 103]. But the Court’s inquiry is an objective, not subjective, one. “‘Following Leon, courts presented with a motion to suppress [challenging a warrant] must ask whether a reasonably well[-]trained officer would have known that the search was illegal despite the magistrate’s decision.’” United States v. Moorehead, 912 F.3d 963, 967–68 (6th Cir. 2019) (quoting United States v. White, 874 F.3d 490, 496 (6th Cir. 2017)). Moreover, the record is devoid of evidence that Agent Valero did not believe the search warrant authorized him to search employee cell Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 82 of 91 PageID #: <pageID>
83 phones. Instead, he came with a CART unit prepared to extract data from cell phones and electronic devices [See Doc. 148-1 p. 1 (stating Agent Valero requested CART assistance with the execution of a warrant, specifically “to assist with on-scene imaging of computers and mobile devices”)]. At the August 12 evidentiary hearing, Defendant Haney argued that the Court should apply the missing witness inference and infer the agents did not execute the search warrant in good faith because the Government did not present the agents as witnesses at the evidentiary hearing [Doc. 195 pp. 102–03]. The missing witness inference is a “permissive inference” that allows the jury to infer a witness’s testimony would have been unfavorable “when it can be said with reasonable assurance that it would have been rational for a party to have called the absent witness but for some apprehension about his testimony[.]” State v. Eldridge, 749 S.W.2d 756, 758 (Tenn. Crim. App. 1988). Application of the missing witness inference is a two-prong inquiry: “An adverse inference such as this is permitted from the failure of a party to call a witness if the witness is (1) peculiarly within the party’s power to produce; and (2) if the testimony of that witness would elucidate the transaction.” United States v. Russell, 142 F.3d 438 (table), No. 96-2128, 1998 WL 136574, at * 4 (6th Cir. Mar. 19, 1998) (citing United States v. Blakemore, 489 F.2d 193, 195 n.4 (6th Cir. 1973)). The undersigned declines to apply the inference here. First, the inference applies at trial. See Russell, 1998 WL 136574, at *4 (requiring that before a party asks the jury to make a missing witness inference, the party must seek and obtain the court’s ruling on whether it applies).41 Second, even if the inference could apply at a suppression hearing, the second prong is not met. 41 Additionally, the Rules of Evidence do not apply at a suppression hearing. United States v. Fitzmaurice, No. 3:22-CR-136, 2023 WL 3183313, at *4 (W.D. Ky. May 1, 2023) (citing United States v. Stepp, 680 F.3d 651, 668 (6th Cir. 2012)). Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 83 of 91 PageID #: <pageID>
84 As stated, the good faith inquiry is an objective one. Moorehead, 912 F.3d at 967–68. Thus, the executing agents’ testimony would not shed light on the matter of good faith. Although the affidavit failed to provide a nexus between the evidence sought and Defendants’ cell phones, the cell phone extractions are not subject to suppression because the agents executed the search warrant in good faith. 2. Other Records Seized from RHP The search warrant for RHP permitted seizure of “[a]ll records relating to violations of” the target offenses and lists eleven categories of records tailored to reveal evidence of health care fraud or health care kickbacks including “prescriptions sent to or dispensed by” RHP [Doc. 119-1 p. 43–44)]. At the August 12, 2025 hearing, Defendants Roper and Haney argued that agents seized boxes of records and prescriptions from RHP without regard to whether the prescriptions were altered or forged [Doc. 195 pp. 62, 80–81, 97].42 As an example, counsel for Defendant Haney argued that agents seized all prescriptions by Dr. Scariano even though those prescriptions did not fall within the scope of the search warrant [Id. at 18, 60]. Counsel asserted that agents seized 70,000 prescriptions from RHP when the affidavit only discusses a limited number of prescriptions that were allegedly altered or forged [Id. at 62]. 42 Counsel for Defendant Haney argued that she raised this argument in her original suppression motion [Doc. 195 pp. 59–60; see also Doc. 185 p. 3 (stating Defendant Haney “has alleged in connection with her pending motion to suppress the RHP search . . . outrageous government misconduct . . . including . . . the FBI’s seizure of extensive documentation that was never mentioned in the warrant application, including all of Dr. Scariano’s prescriptions, and for which probable cause was lacking”)]. In her original suppression motion, Defendant Haney asked to argue the application of the exclusionary rule to the “fruits” of the search after a Franks hearing affords “further development of the factual record” [Doc. 89 p. 23]. But Defendant’s argument that the agents seized records outside the scope of the search warrant does not turn on the determination of the Franks analysis and was available to Defendant at the time of her initial motion deadline. Thus, the undersigned agrees with the Government that this argument is untimely. The undersigned, nevertheless, addresses it briefly. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 84 of 91 PageID #: <pageID>
85 In a business fraud case, the authorization to search for general business records is not overbroad.” United States v. Abboud, 438 F.3d 554, 575 (6th Cir. 2006). A search warrant permitting the seizure of corporate records is sufficiently particular if it contains “‘subject-matter’ limitations” on the records agents are authorized to seize. United States v. Bartlett, 1:23-cr-20676, 2024 WL 4533554, at *15 (E.D. Mich. Oct. 21, 2024). Thus, a warrant is sufficiently particular when it permits seizure of “records which would likely provide information ‘related’ to” the alleged fraudulent scheme. Id. Even when a business is not steeped in fraud, a large scheme will necessitate seizure of a large quantity of files. Chaney, 921 F.3d at 587–588. Thus, in United States v. Chaney, the court affirmed seizure of all patient files to search for evidence of illegitimate prescriptions and money laundering even though the clinic could not be fairly characterized as a “pill mill.” Id. at 585–88. There, the prior investigation of the clinic “revealed both specific instances in which patients were illegitimately prescribed controlled substances and evidence suggesting a larger fraud (for example, a pad of pre-signed prescriptions left for use while the doctor was away).” Id. at 588. The court therefore rejected the defendant’s argument that the officers were restricted to searching for the specific instances of criminal activity already identified because it “ignore[ed the] probable cause to search for other instances of fraud.” Id. Instead, permitting seizure of patient files containing evidence of illegitimate prescriptions “was as particular as was possible, in the circumstances.” Id. Here, like in Chaney, Agent Valero’s affidavit includes both specific instances of altered or forged prescriptions in the prescriber denials [Doc. 119-1 ¶¶ 46–69] and also contains allegations of wider fraud in the analysis of RHP’s claims data showing large numbers of prescriptions for high-reimbursement medications to Medicare (3,575 claims) in contrast with few Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 85 of 91 PageID #: <pageID>
86 claims for the same drug to other payors (42 claims) [Id. ¶ 70–71]. Other indications of broader fraudulent conduct include the use of pre-printed prescription forms [id.¶ 51], the TennCare claims data analysis [id. ¶ 72], and the failure to collect copays [id. ¶¶ 85–88]. RHP’s legitimate prescriptions are not easily separated from illegitimate ones as the affidavit shows prescriber denials from more than one medical practice. Also, the bulk of RHP’s business and most, if not all, of the altered and forged prescriptions involve compounded creams and gels. The undersigned therefore finds that the broad seizure of records, including prescriptions, was appropriate.43 Thus, the undersigned finds the seizure of electronic and paper business records from RHP including boxes of prescriptions for review for evidence of the target offenses conforms to the requirements of the Fourth Amendment. D. Return of Property Defendant Haney and Warren44 also request the immediate return of their funds and assets seized pursuant to seizure warrants under Federal Rule of Criminal Procedure 41(g) [Doc. 89 p. 27]. The undersigned has already addressed a motion for return of seized property by Defendant Warren, who sought return of her assets because the government seized more than the amount to be forfeited in the original Indictment and this over-seizure left her unable pay for retained counsel [Doc. 150 p. 3]. The undersigned found and continues to find that Defendants cannot proceed under Rule 41(g) [Id. at 12–15]. Rule 41(g) provides that “[a] person aggrieved by an unlawful search and seizure of property or by the deprivation of property may move for the property’s return.” 43 Included in the circumstances are the facts that RHP is in a heavily regulated industry and is required to provide prescriptions for inspection by the PMBs. 44 Although Defendant Roper also argues the “seizure of assets must be limited to the proceeds of specific false prescriptions alleged and must show a nexus to the criminality alleged” [Doc. 165 p. 14], she lacks standing to challenge the seizure of her codefendants’ assets. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 86 of 91 PageID #: <pageID>
87 Fed. R. Crim. P. 41(g). But Rule 41(g) does not apply to property that is subject to federal forfeiture. United States v. Sims, 376 F.3d 705, 708 (7th Cir. 2004) (“The proper office of a Rule 41(g), motion is, before any forfeiture proceedings have been initiated, or before any criminal charges have been filed, to seek the return of property seized without probable cause, or property held an unreasonable length of time without the institution of proceedings that would justify the seizure and retention of the property.”); see also United States v. Search of Music City Mktg., Inc., 212 F.3d 920, 923 (6th Cir. 2000) (permitting a motion for return of property under Rule 41(e), predecessor to Rule 41(g), under the court’s “equitable jurisdiction” when no criminal indictment or proceeding was pending against the movant); United States v. Tahir, No. 15-20351, 2016 WL 641342, at *6 (E.D. Mich. Feb. 18, 2016) (“[W]hen there is either a civil or criminal forfeiture procedure under way, a Rule 41(g) motion is not appropriate.” (citing Sims and footnote omitted)); In re Search of Citizens Bank Checking Acct. of Drogueria Villa, Inc., No. 3:11-MC-07, 2012 WL 3764058, at *1 (E.D. Tenn. Aug. 1, 2012) (citing Sims), report & recommendation adopted, 2012 WL 3764424 (E.D. Tenn. Aug. 29, 2012). Accord Brown v. United States, 692 F.3d 550, 552 (6th Cir. 2012) (explaining that after civil forfeiture proceedings commence, equitable relief under Rule 41(g) is no longer available); Shaw v. United States, 891 F.2d 602, 603–04 (6th Cir. 1989) (affirming dismissal of motion for return of property under Rule 41(e), predecessor to Rule 41(g), after the government filed civil forfeiture proceedings). At the time Defendant Haney filed her suppression motion on March 31, 2025, the Grand Jury had returned a Superseding Indictment, which included a forfeiture provision [Doc. 73 ¶¶ 57– 61]. The Superseding Indictment seeks forfeiture under 18 U.S.C. §§ 981(a)(1)(C) and 982(a)(1) and 28 U.S.C. § 2461(c) [Doc. 73 ¶¶ 57–59]. Section 982(a)(1) provides for forfeiture, upon conviction of a “violation of section 1956, 1957, or 1960 [of Title 18] . . . of any property, real or Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 87 of 91 PageID #: <pageID>
88 personal, involved in such offense, or any property traceable to such property.” 18 U.S.C. § 982(a)(1). Defendants Haney and Warren are charged in the Superseding Indictment with conspiracy to commit money laundering in violation of § 1956(h) and money laundering in violation of § 1957 [Doc. 73 ¶¶ 53–54, 56]. The Superseding Indictment seeks forfeiture of all nineteen assets seized pursuant to the seizure warrants [Id. ¶ 60 (a)–(k) (bank accounts), (a)–(d) (investment accounts), & (a)–(b) (vehicles), & (a)–(b) (watercraft)].45 The Second Superseding Indictment, filed on May 21, 2025, makes the same forfeiture allegations as to Defendant Haney’s and Defendant Warren’s assets seized pursuant to the seizure warrants [Doc. 127 ¶¶ 70–74]. The Government argues that forfeitability of the property, including the nexus of the property to criminal activity, is a matter for sentencing and cannot be determined pretrial [Doc. 111 p. 17; see also Doc. 175 p. 6]. The undersigned agrees. “[I]t is ‘well-settled that the federal government may defeat a Rule 41[(g)] motion by demonstrating that the property is subject to federal forfeiture.’” United States v. Zazueta-Hernandez, No. 1:19-cr-130, 2020 WL 5016940, at *3 (S.D. Ohio Aug. 25, 2020) (quoting United States v. Fitzen, 80 F.3d 387, 389 (9th Cir. 1996) (other citations omitted); see also Music City Mktg., 212 F.3d at 923 (explaining that a court has jurisdiction under Rule 41(e), the predecessor to Rule 41(g), when there are no criminal proceedings pending)); see also Shaw, 891 F.2d at 604 (finding district court did not retain jurisdiction over a Rule 41(g) motion after government filed civil forfeiture proceeding and properly gave notice to the defendant). Moreover, “Rule 41(g) provides an equitable remedy that is not available where there is an adequate remedy at law.” Zazueta-Hernandez, 2020 WL 5016940, at *3 (citing Brown, 45 The Superseding Indictment also seeks forfeiture of real property, including the Finley Ridge Lane residence of Defendant Roper [Doc. 73 ¶ 60 (a)–(f) (real property)]. Defendant Roper’s Finley Ridge Lane residence is not included in Agent Celeste’s affidavit. Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 88 of 91 PageID #: <pageID>
89 692 F.3d at 552–53). “Civil equitable jurisdiction is discretionary; a court should exercise it with ‘caution and restraint.’” United States v. Kazkaz, No. 23-20022, 2023 WL 4237758, at *9 (E.D. Mich. June 28, 2023) (citation omitted). Courts consider four factors in making the determination: (1) whether the Government displayed a callous disregard for the constitutional rights of the movant; (2) whether the movant has an individual interest in and need for the property [they] want [] returned; (3) whether the movant would be irreparably injured by denying return of the property; and (4) whether the movant has an adequate remedy at law for the redress of [their] grievance. Id. (citation omitted and alterations in original). If, however, “an adequate remedy at law exists, the fourth factor is dispositive: a movant is not entitled to equitable relief, and a court must decline to exercise jurisdiction.” Id. (citing Shaw, 891 F.2d at 203). Here, an adequate remedy at law exists because, by returning an indictment, the Grand Jury has now found probable cause to believe that the seized assets are subject to forfeiture. See Purbeck v. Wilkinson, No. 1:21-cv-47, 2021 WL 1553810, at *1 n.2 (D. Idaho Apr. 20, 2021) (finding adequate remedy at law existed when criminal proceedings have been initiated). The undersigned thus recommends that the District Judge decline to exercise jurisdiction to entertain Defendants’ request under Rule 41(g). III. CONCLUSION For the reasons discussed herein, the undersigned finds that: 1. Defendants Haney and Warren have standing to challenge the search of RHP, but Defendant Roper does not; 2. all three Defendants have standing to challenge the search of her own cell phone but not the cell phones of other employees; 3. Defendants Haney and Warren have standing to challenge the seizure of her own accounts and assets pursuant to seizure warrants, but Defendant Roper lacks standing to challenge the seizure Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 89 of 91 PageID #: <pageID>
90 warrants because none of her assets were seized pursuant to the seizure warrants; 4. a Franks hearing is not warranted for the affidavit supporting the search of RHP or the affidavit supporting the seizure warrants; 5. Agent Valero’s affidavit provides probable cause to search the RHP premises for records of the target offenses; 6. Agent Celeste’s affidavit provides probable cause to support the seizure of all funds from Defendants’ bank accounts and investment accounts and their vehicles and watercraft; 7. Agent Valero’s affidavit does not provide probable cause to search Defendants’ cell phones because it fails to show a nexus between the cell phones and the target offenses; 8. the executing agents searched Defendants’ cell phones in good faith; 9. the executing agents properly seized all prescriptions from RHP; and 10. Defendants may not challenge the seizure warrants under Federal Rule of Criminal Procedure 41(g) because the seized assets are subject to forfeiture. The undersigned therefore RECOMMENDS46 that the District Judge GRANT Defendant Warren’s motions [Docs. 96 & 172] to join in Defendant Haney’s and Defendant Roper’s suppression motions; GRANT Defendant Haney’s request [Doc. 177] to join in Defendant Roper’s suppression motion; DENY Defendant Roper’s motion [Doc. 138] to join in Defendant Haney’s 46 Any objections to this report and recommendation must be served and filed within fourteen (14) days after service of a copy of this recommended disposition on the objecting party. Fed. R. Crim. P. 59(b)(2) (as amended). Failure to file objections within the time specified waives the right to review by the District Court. Fed. R. Crim. P. 59(b)(2); see United States v. Branch, 537 F.3d 582, 587 (6th. Cir. 2008); see also Thomas v. Arn, 474 U.S. 140, 155 (1985) (providing that failure to file objections in compliance with the required time period waives the right to appeal the District Court’s order). The District Court need not provide de novo review where objections to this report and recommendation are frivolous, conclusive, or general. Mira v. Marshall, 806 F.2d 636, 637 (6th Cir. 1986). Only specific objections are reserved for appellate review. Smith v. Detroit Fed. of Tchrs, 829 F.2d 1370, 1373 (6th Cir. 1987). Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 90 of 91 PageID #: <pageID>
91 motion to suppress evidence from the search of RHP and in Defendant Haney’s motion for return of property seized pursuant to seizure warrants; and DENY Defendants’ motions to suppress evidence [Docs. 89 & 165]. The undersigned also DENIES Defendant Tiffany Haney’s Second Motion to Suppress [Doc. 185] as untimely without a showing of good cause, but the undersigned has considered Defendant’s pertinent arguments also raised at the evidentiary hearing herein. Respectfully submitted, ____________________________ Jill E. McCook United States Magistrate Judge Case 3:24-cr-00113-TAV-JEM Document 204 Filed 10/21/25 Page 91 of 91 PageID #: <pageID>
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