United States of America v. Cline et al

- 1 -
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
UNITED STATES OF AMERICA,
Plaintiff,
1:25-CV-1576
v. 	(GTS/DJS)
DOUGLAS CLINE and JOANNE CLINE,
Defendants.
APPEARANCES: 	OF COUNSEL:
UNITED STATES ATTORNEY’S OFFICE 	CHRISTOPHER R. MORAN, ESQ.
445 Broadway, Room 218
Albany, NY 12207
DOUGLAS CLINE
Defendant pro se
Saratoga Springs, NY 12866
JOANNE CLINE
Defendant pro se
Bolton Landing, NY 12814
DANIEL J. STEWART
United States Magistrate Judge
REPORT- RECOMMENDATION AND ORDER
I. 	INTRODUCTION
On March 29, 2024, the United States commenced an action, Cline #1, under the
Controlled Substances Act (“CSA”), codified at 21 U.S.C. §§ 801-971, seeking civil
penalties against Dr. Douglas Cline (“Dr. Cline”) doing business as Chronic Pain
Management 	(“CPM”), 	as 	well 	as 	his 	Nurse 	Practitioner 	Laurie 	Mckenna 	(“NP
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 1 of 22

- 2 -
Mckenna”). 	See United States v. Cline, 1:24-CV-451 (N.D.N.Y.) (Cline #1). 	During
discovery in the initial action, Dr. Cline indicated that he had no substantial ability to pay
a fine. Cline #1 at Dkt. No. 53 (“Chronic Pain Management is now defunct as all of its
assets have been sold and . . . Dr. Cline lacks the ability to pay a monetary penalty.”). In
light of that position, this Court then held that Dr. Cline’s financial information was the
proper subject of discovery. Id. at Dkt. Nos. 55 & 85.
The Government asserts that Dr. Cline was not forthcoming regarding his actual
assets, which is an important issue in the case as any substantial fine imposed by the Court
under the CSA would have to take into consideration the Defendant’s financial status and
his ability to pay. See, e.g., Advance Pharm., Inc. v. United States, 391 F.3d 377, 399 (2d
Cir. 2004) (“[I]n determining monetary penalties under § 842(c), district courts have
frequently considered four factors: (1) the level of defendant’s culpability, (2) the public
harm caused by the violations, (3) defendant’s profits from the violations, and (4)
defendant’s ability to pay a penalty.”) (citations omitted). The Government argues that
discovery 	has 	established 	Plaintiff’s 	ownership 	in 	a 	home 	believed 	to 	be 	worth
approximately $1,750,000 that is located in Bolton Landing, New York, on the shores of
Lake George (the “Bolton Property”), which he then purportedly transferred to Joanne
Cline (“Ms. Cline”) as part of a divorce settlement, but under circumstances that indicated
that Dr. Cline had effectively maintained an ownership interest in the property. Dkt. No.
1, Compl. at ¶¶ 20-21, 23-25, & 29-51; Dkt. No. 4 at pp. 24-28. In light of that position,
the Government commenced the present action against Dr. Cline and Ms. Cline, Cline #2,
alleging that the transfer of the Bolton Property was a fraudulent conveyance in violation
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 2 of 22

- 3 -
of the Federal Debt Collection Procedure Act (“FDCPA”). 	See United States v. Cline,
1:25-CV-1576 (N.D.N.Y.) (Cline #2); see also Compl.
Presently before the Court in this matter are the Defendants’ separate Motions to
Dismiss the Complaint pursuant to Rules 9 and 12(b) of the Federal Rules of Civil
Procedure, Dkt. Nos. 16-17 & 32-33, as well as the Government’s Application for
prejudgment remedies pursuant to 28 U.S.C. § 3001(a)(2). Dkt. Nos. 3-4. The Motions
to 	Dismiss 	have 	been 	referred 	to 	the 	undersigned 	for 	issuance 	of 	a 	report-
recommendation. Dkt. No. 38.
Regarding prejudgment remedies, the Government initially sought a writ of
sequestration, as well as a writ of attachment of a ½ interest ($875,000.00) in the Bolton
Property by way of an ex parte procedure, but the Court, in its discretion, converted the
matter to a hearing on notice to the Defendants. Dkt. Nos. 3-4, 6, & 8. That Hearing was
held on December 9, 2025, at which time the Court heard from the Government as well
as the pro se Defendants. 	See Text Minute Entry for December 18, 2025; Dkt. No. 36,
Tr. 	In connection with the pending Motions, the Court has considered: the Complaint
(Dkt. No. 1); the Government’s Application for Prejudgment Writs of Attachment and
Sequestration, including the forty-one attached exhibits (Dkt. Nos. 3-4); the Court’s
Orders regarding service of process (Dkt. Nos. 6 & 8-9); the Government’s Letters
regarding the status of service of process (Dkt. Nos. 7 & 12); the Government’s
supplemental Letter Brief regarding prejudgment remedies (Dkt. No. 13); Dr. Cline’s
Motion to Dismiss (Dkt. Nos. 16 & 33); Ms. Cline’s Motion to Dismiss (Dkt. Nos. 17 &
32); Dr. Cline and Ms. Cline’s Responses to the Government’s Letter Brief (Dkt. Nos.
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 3 of 22

- 4 -
18-19); the Government’s Opposition to Dr. Cline and Ms. Cline’s Motions to Dismiss
(Dkt. No. 23 & 34); as well as the arguments presented during the Hearing (Dkt. No. 36).
For the reasons set forth herein, the Government’s Motion for a prejudgment writ
of attachment in the amount of $875,000.00 against the Bolton Property is hereby granted,
and it is recommended that the Defendants’ Motions to Dismiss the Complaint be denied.
II. 	MOTION TO DISMISS
On a motion to dismiss, the allegations of a complaint must be accepted as true.
See Cruz v. Beto, 405 U.S. 319, 322 (1972). The trial court’s function “is merely to assess
the legal feasibility of the complaint, not to assay the weight of the evidence which might
be offered in support thereof.” 	Geisler v. Petrocelli, 616 F.2d 636, 639 (2d Cir. 1980).
“The issue is not whether a plaintiff will ultimately prevail but whether the claimant is
entitled to offer evidence to support the claims.” Scheuer v. Rhodes, 416 U.S. 232, 236
(1974) (overruled on other grounds by Davis v. Scherer, 468 U.S. 183 (1984)).
The Court is bound to give the plaintiff the benefit of every reasonable inference
to be drawn from the “well-pleaded” allegations of the complaint. See Retail Clerks Int’l
Ass’n, Local 1625, AFL-CIO v. Schermerhorn, 373 U.S. 746, 754 (1963). Nevertheless,
“the tenet that a court must accept as true all of the allegations contained in a complaint
is inapplicable to legal conclusions.” 	Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Therefore, “[t]hreadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” 	Id. (citation omitted). 	A motion to dismiss
pursuant to Rule 12(b)(6) may not be granted so long as the complaint includes “enough
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 4 of 22

- 5 -
facts to state a claim to relief that is plausible on its face.” 	Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007); Ashcroft v. Iqbal, 556 U.S. at 697.
“A claim has facial plausibility when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 556 U.S. at 678. This plausibility standard “is not akin to a
‘probability requirement,’ but it asks for more than a sheer possibility that a defendant
has acted unlawfully.” Id. In this respect, to survive dismissal, a plaintiff “must provide
the grounds upon which his claim rests through factual allegations sufficient ‘to raise a
right to relief above the speculative level.’” 	ATSI Commc’ns, Inc. v. Shaar Fund, Ltd.,
493 F.3d 87, 98 (2d Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 440 U.S. at 555).
Thus, in spite of the deference the court is bound to give to a plaintiff’s allegations, it is
not proper for the court to assume that “the [plaintiff] can prove facts [which he or she]
has not alleged or that the defendants have violated the . . . laws in ways that have not
been alleged.” Assoc. Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters,
459 U.S. 519, 526 (1983). The process of determining whether a plaintiff has “nudged
[his or her] claims . . . across the line from conceivable to plausible,” entails a “context-
specific task that requires the reviewing court to draw on its judicial experience and
common sense.” Ashcroft v. Iqbal, 556 U.S. at 679-80.
The Government asserts two causes of action in this matter. 	The first cause of
action alleges a fraudulent transfer of the Bolton Property under the FDCPA. Compl. at
¶¶ 61-64 (citing 28 U.S.C. § 3304). 	The second cause of action alleges avoidance of
transfer under New York Debtor and Creditor Law (“NY DCL”). Id. at ¶¶ 65-67 (citing
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 5 of 22

- 6 -
NY DCL § 276). The Government asserts that Dr. Cline’s transfer of the Bolton Property
to Ms. Cline “was made with actual intent to hinder, delay, or defraud the United States.”
Id. at ¶¶ 62 & 66. 	The Government further alleges that “[t]he transfer was also made
without Dr. Cline receiving reasonably equivalent value at a time when he believed or
reasonably should have believed that he would incur debts beyond his ability to pay as
they became due.” 	Id. at ¶ 63. The United States seeks to void the transfer so that any
lien “may attach to the [Bolton] Property and satisfy any judgment that Dr. Cline owes
the United States in the CSA Case.” 	Id. at ¶¶ 64 & 67. 	Additionally, the Government
requests that the Court enter a declaratory judgment that the transfer of the Bolton
Property was fraudulent as to the United States and is voidable to the extent necessary to
satisfy any money judgment in Cline #1. See id. at p. 9.
The claim under the FDCPA is governed by 28 U.S.C. § 3304. 	The statute
provides, in pertinent part, that:
[A] transfer made or obligation incurred by a debtor is fraudulent as to a
debt to the United States, whether such debt arises before or after the
transfer is made or the obligation is incurred, if the debtor makes the transfer
or incurs the obligation – (A) with actual intent to hinder, delay, or defraud
a creditor.
28 U.S.C. § 3304(b)(1)(A). 	This provision also provides for relief in connection with
constructive fraud relative to a future obligation to the United States, if “(B) without
receiving a reasonably equivalent value in exchange for the transfer or obligation if the
debtor – . . . (ii) intended to incur, or believed or reasonably should have believed that
he would incur, debts beyond his ability to pay as they became due.” Id. at (b)(1)(B).
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 6 of 22

- 7 -
As an aid to determining the actual intent of the debtor, the statute points to eleven
factors or badges of fraud. 	Id. at (b)(2). 	The factors for the court to consider, among
others, are whether:
(A) 	the transfer or obligation was to an insider;
(B) 	the debtor retained possession or control of the property transferred
after the transfer;
(C) 	the transfer or obligation was disclosed or concealed;
(D) 	before the transfer was made or obligation was incurred, the debtor
had been sued or threatened with suit;
(E) 	the transfer was of substantially all the debtor’s assets;
(F) 	the debtor absconded;
(G) 	the debtor removed or concealed assets;
(H) 	the value of the consideration received by the debtor was reasonably
equivalent to the value of the asset transferred or the amount of the
obligation incurred;
(I) 	the debtor was insolvent or became insolvent shortly after the
transfer was made or the obligation was incurred;
(J) 	the transfer occurred shortly before or shortly after a substantial debt
was incurred; and
(K) 	the debtor transferred the essential assets of the business to a lienor
who transferred the assets to an insider of the debtor.
Id.
The Complaint in this case, though vigorously contested by Defendants, is detailed
and fact specific. The Complaint alleges that, in 2011, Dr. Cline founded CPM, a medical
practice which, at its height in 2024, grew to 500 patients. Compl. at ¶ 9. As part of its
licensed services, CPM provided opioid prescriptions to its patients. Id. During this time,
the federal authorities began a multi-year investigation into Dr. Cline and CPM which
centered on their opioid prescription practices. 	Id. at ¶¶ 10-11. 	As part of that
investigation, in February 2021, the Government served an administrative subpoena on
CPM requesting records with regard to specific patients, including Patients 1, 2, and 3,
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 7 of 22

- 8 -
who are identified by number in the CSA Complaint. Id. at ¶ 12. Dr. Cline acknowledged
potential problems with at least Patients 1 and 2. Id. at ¶ 13. Approximately a year later,
on February 17, 2022, the Government sent a letter to then-legal counsel for Dr. Cline,
William Dreyer, outlining why Dr. Cline, CPM, and others faced the potential for
substantial civil liability for prescriptions written for Patients 1, 2, and 3. Id. at ¶ 14.
The Complaint also alleges that Dr. Cline, himself, purchased the Bolton Property
in 2005, and that it was worth approximately $1.7 million. Id. at ¶¶ 15 & 25. Dr. Cline
held the Bolton Property in his own name through 2022. 	Id. at ¶ 17. During this time,
Dr. Cline was married to Ms. Cline, and they resided together at the Bolton Property. Id.
at ¶ 19.
The Government alleges in the Complaint that, in 2022, Dr. Cline fraudulently
transferred the Bolton Property to Ms. Cline. Id. at ¶¶ 19-60. In particular, on June 23,
2022, Dr. Cline and Ms. Cline signed a separation agreement. Id. at ¶ 20. Dr. Cline was
not represented by counsel for purposes of the separation agreement, but his wife was.
Id. at ¶¶ 26-27. 	Under the agreement, Ms. Cline received the Bolton Property, and Dr.
Cline retained ownership of his medical practice, CPM. Id. at ¶ 21. On August 1, 2022,
Dr. Cline transferred substantially all CPM’s assets to Dr. Dimitri Koumanis “without
receiving consideration of value in return.” Id. at ¶ 22. On September 2, 2022, the Warren
County Supreme Court entered a judgment of divorce which incorporated the separation
agreement. 	Id. at ¶ 28. 	Six days later, on September 8, 2022, Dr. Cline executed a
warranty deed transferring the Bolton Property to Ms. Cline. Id. at ¶ 30. However, the
deed was not recorded in the clerk’s office until November 18, 2022. Id. at ¶ 31.
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 8 of 22

- 9 -
While the separation agreement indicated that Ms. Cline was responsible for any
debt associated with the Bolton Property, the Complaint alleges that Dr. Cline continued
to pay taxes on the Bolton Property, as well as homeowners’ insurance and homeowners
association dues. Id. at ¶¶ 46-48. According to the Complaint, Dr. Cline acts as caretaker
of the Bolton Property, intermittently sleeps and stays at the Bolton Property, and has
listed the Bolton Property as his address for bank applications and in certain federal tax
returns. Id. at ¶¶ 40-51. Further, on September 6, 2022, four days after the judgment of
divorce, Dr. Cline applied for a home equity line of credit (“HELOC”) on the Bolton
Property with a credit limit of $300,000. 	Id. at ¶¶ 32-34. As part of the application, Dr.
Cline represented that he owned the Bolton Property, that title to the Bolton Property was
held solely by him, and that he was married. 	Id. at ¶ 33. $100,000 was advanced from
the HELOC to Dr. Cline in March of 2025, and $50,000 was advanced in April of 2025.
Id. at ¶¶ 37 & 39.
With regard to the badges of fraud, the Complaint sufficiently details seven of the
eleven factors: (1) the transfer was to an insider, Dr. Cline’s ex-wife, Ms. Cline; (2) Dr.
Cline retained possession and control of the Bolton Property after the transfer to Ms.
Cline; (3) the transfer was concealed in connection with the HELOC; (4) Dr. Cline was
aware of the potential CSA lawsuit at the time of the transfer; (5) the transfer was for
substantially all of Dr. Cline’s assets; (6) Dr. Cline concealed his assets; and (7) the value
received by Dr. Cline for the CPM practice was not reasonably equivalent to the value of
the Bolton Property transferred to Ms. Cline. See Dkt. No. 4 at pp. 25-26.
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 9 of 22

- 10 -
Having reviewed the detailed facts alleged in the Complaint, the Court concludes
that it plausibly alleges a fraudulent transfer with actual intent to hinder, delay, or defraud
the United States, or that the acts were done through constructive fraud, all in violation
of 28 U.S.C. § 3304 and NY DCL § 276. The allegations also satisfy the heightened
pleading requirements of Rule 9(b) of the Federal Rules of Civil Procedure. Under both
federal and state law, to state an actual fraudulent transfer claim with Rule 9(b)
particularity, a party must ordinarily allege: (1) the property that was conveyed; (2) the
timing and, if applicable, frequency of the transfer; and (3) the consideration paid for the
transfer. 	See United Feature Syndicate, Inc. v. Miller Features Syndicate, Inc., 216
F.Supp.2d 198, 221 (S.D.N.Y. 2002). 	Under Rule 9(b), “malice, intent, knowledge, or
other condition of mind . . . may be averred generally.” Stated another way, “Rule 9(b)
does not require omniscience; rather the Rule requires that the circumstances of the fraud
be pled with enough specificity to put defendants on notice as to the nature of the claim.”
United States ex rel. Polukoff v. St. Mark’s Hosp., 895 F.3d 730, 745 (10th Cir. 2018)
(citations omitted). This standard has been satisfied with the Government’s pleadings.
The arguments presented by Ms. Cline in her Motion to Dismiss that the Court
lacks jurisdiction based upon defective service of process, Dkt. No. 17 at p. 3, are now
moot, as both Defendants accepted service of the Complaint during the most recently held
conference. See Dkt. Nos. 14-15.
The primary argument made by Defendants that the transfer was not in fact
fraudulent, or that the Government’s allegations are not sufficiently supported and are
misleading, Dkt Nos. 16-17 & 32-33, are points that will no doubt be the subject of
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 10 of 22

- 11 -
discovery in this case, but do not warrant the granting of the Motions to Dismiss which,
as noted above, only consider whether the allegations of the Complaint are plausible and
sufficiently fact-based. That standard has certainly been met in this case.
Dr. Cline claims that there is no proof that he was insolvent at the time of the
transfer, Dkt. No. 16 at pp. 2-3, but that argument misreads the statute. Subdivision (a)
of § 3304 refers to a debt arising before the transfer, and admittedly it does reference
insolvency. However, in the present action the Government is seeking to preserve assets
in relation to a judgment that has not yet been imposed, a factual situation covered by
subdivision (b) of § 3304, which pertains to transfers without regard to the date of
judgment. 	Under 28 U.S.C. § 3304(b)(1)(A), a transfer can be considered fraudulent if
the debtor makes the transfer with the actual intent to hinder, delay, or defraud the United
States, and while financial status is one of the enumerated badges of fraud under 28 U.S.C.
§ 3304(b)(2), there is no requirement of insolvency for a claim of intent to defraud
pursuant to this provision. 	Under 28 U.S.C. § 3304(b)(1)(B), a transfer can also be
determined 	constructively 	fraudulent 	where 	the 	debtor 	made 	the 	transfer 	without
receiving a reasonably equivalent value in exchange and believed, or reasonably should
have believed, that he would incur debts beyond his ability to pay as they became due.
Here, the Complaint alleges that Dr. Cline transferred his entire interest in the Bolton
Property to his soon-to-be ex-wife, Ms. Cline, and received (or kept) an interest in his
medical practice that was of little worth, such that he has now acknowledged that he has
no ability to pay a significant civil fine. 	See generally Compl. 	The existence of the
potential for a fine that was beyond Dr. Cline’s financial reach without ownership of some
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 11 of 22

- 12 -
or all of the Bolton Property is alleged to have been known, or reasonably should have
been known, to Dr. Cline at the time of the transfer. 	Id. at ¶¶ 62-63. These allegations
are therefore sufficient to withstand the Motions to Dismiss.
Defendants also argue that, because the separation agreement which contains the
transfer of the Bolton Property was incorporated in the divorce decree issued by Warren
County Family Court, then the Federal Government is powerless to alter or effect it. See
Dkt. No. 16 at p. 1; Dkt. No. 17 at p. 4; Dkt. No. 32 at pp. 2-3. However, the Government
has pointed to case law that holds the opposite. Dkt. No. 23 at p. 5. In United States v.
Schippers, the Government alleged that the transfer of assets in a divorce decree
constituted fraudulent transfers, and thus “that the subject properties should be applied in
full to the restitution . . . owe[d].” 982 F. Supp. 2d 948, 953-54 (S.D. Iowa 2013). The
court agreed and held that the “transfers . . . must be set aside as void” because they “were
fraudulent in violation of federal laws.” Id. at 954. The court explained that “the transfers
of the subject properties through the divorce decree” were made with the “‘actual intent
to hinder, delay, or defraud a credit’ under 28 U.S.C. § 3304(b)(1)(A).” Id. 	The court
noted that: the ex-wife was an “insider,” meaning that the ex-wife was “‘a relative of the
debtor,’ such as a spouse or family member”; there were several suits brought against the
ex-husband before the transfers were made; the ex-husband “transferred substantially all
of his assets to” the ex-wife; the ex-husband “did not receive equivalent value for the
transfers”; and “the transfer occurred shortly before” the ex-husband “incurred a
substantial debt.” Id. (quoting 28 U.S.C. § 3301(5)) (citations omitted). The court also
stated that, even if the ex-husband did not commit actual fraud, the government was still
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 12 of 22

- 13 -
entitled to recovery because the transfers met the statutory standard for constructive fraud
given that the transfers “were absent reasonably equivalent consideration” and the ex-
husband “‘believed or reasonably should have believed he would incur debts beyond his
ability to pay as they became due.’” 	Id. at 654 (quoting 28 U.S.C. § 3304(b)(1)(B)(ii))
(citation omitted). 	Thus, United States v. Schippers, while not binding, is nevertheless
persuasive in indicating that a debtor cannot avoid attachment pursuant to the FDCPA
merely because the transfer occurs through a divorce decree.
For all the foregoing reasons, and for the reasons set forth in the Government’s
detailed filings, the Court recommends that the Defendants’ Motions to Dismiss be
denied.1
III. 	STANDARD FOR PREJUDGMENT ATTACHMENT
The Government seeks to maintain the status quo while the civil action in this case
is pending. 	To do so, the Government seeks to employ various prejudgment remedies
that are identified in the FDCPA, including attachment and sequestration.2 See 28 U.S.C.
1 To the extent that Ms. Cline, in her motion to dismiss, argues in the alternative that, if the case is not dismissed,
she is entitled to a ninety-day extension of time to retain counsel or prepare to defend herself pro se, Dkt. No. 17 at
p. 5, that request is also denied.
2 The Government sought both a writ of attachment and a writ of sequestration. See generally Dkt. Nos. 3-4. The
writ of sequestration was sought in relation to the HELOC allegedly obtained by Dr. Cline on the Bolton Property.
See Dkt. No. 4 at pp. 3 (requesting a writ of sequestration “requiring that money owed to Dr. Cline on the loans
made to Total Care and Hunter Cline by sequestered and paid to the Clerk of Court”), 4 (stating that “[t]he
government is also applying for Writs of Sequestration . . . with respect to loan repayments to Dr. Clines”), & 27
(“The government seeks sequestration of any payments from Hunter Cline or Total Care to Dr. Cline on the loans
he funded through HELOC advances totaling $150,000. As of June 7, 2025, the outstanding HELOC balance was
$126,693.16 – the total that would be sequestered.”). In response, the Court notes that, both at the hearing on
December 9, 2025, and in Dr. Cline’s filings in relation to his Motion to Dismiss, Dr. Cline stated that the HELOC
that is the subject of the writ of sequestration sought by the Government has been paid off in full. Dkt. No. 33 at
pp. 16 (stating that “the HELOC referenced by the Government has been fully satisfied”) & 21 (letter dated
December 5, 2025 from Citizens Bank “in response to [a] request for the payoff amount for [an] Equity Line of
Credit” for the Bolton Property and stating that the payoff amount is $0); Tr. at pp. 20-21 (containing statements by
Dr. Cline that the HELOC was paid off). Consequently, the Court exercises its discretion to deny the Government’s
request for a Writ of Sequestration.
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 13 of 22

- 14 -
§§ 3101, 3102, & 3105. The FDCPA provides the exclusive civil procedure for the United
States to seek prejudgment remedies. 	28 U.S.C. § 3001(a)(2). 	“The purpose of these
prejudgment remedies is to establish ‘security to satisfy such judgment, and interests and
costs, as the United States may recover on such claim’ for a debt.” United States v. LabQ
Clinical Diagnostics, LLC, 771 F. Supp. 3d 401, 430 (S.D.N.Y. 2025) (quoting 28 U.S.C.
§ 3102(a)).
A court may only grant such a remedy “if the United States shows
reasonable cause to believe” that, inter alia, the debtor “has or is about to
assign, dispose, remove, conceal, ill treat, waste, or destroy property” or “to
convert the debtor’s property into money, securities, or evidence of debt in
a manner prejudicial to the United States,” “with the effect of hindering,
delaying, or defrauding the United States.”
Id. (quoting 28 U.S.C. § 3101(b)(1)(B), (C)).
Determining whether to apply pre-judgement remedies in the present case requires
a multilevel analysis. First, the United States must show “probable validity of the claim
for a debt and the right . . . to recover what is demanded in the application.” 28 U.S.C. §
3101(c); see United States v. LabQ Clinical Diagnostics, LLC, 771 F. Supp. 3d at 430,
458. 	As noted in LabQ, “[e]stablishing the ‘probable validity’ of a claim of debt ‘does
not require proof rising to the level of that required at trial.’” 	United States v. LabQ
Clinical Diagnostics, LLC, 771 F. Supp. 3d at 431 (quotation and citation omitted).
Rather, the Government need only “meet the probable cause standard,” which “exists
when known facts and circumstances are sufficient to warrant a person of reasonable
prudence in the belief that an offense has been or is being committed.” 	Id. (quotations,
internal quotation marks, and citation omitted).
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 14 of 22

- 15 -
Here, as to the debt owed to the Government, the United States Attorney’s Office
references the probable fine that the District Court would impose if it determined that
there were violations of the CSA. Dkt. No. 4 at pp. 22 & 30. Thus, the Court considers
the merits of the Government’s claim and whether there is probable cause to conclude
that a violation of the CSA has occurred and a reasoned belief as to the amount of the
fine. 	As relevant here, the United States’ commencement of Cline #1 centers around
prescription practices for three patients, two of whom were married to each other. Cline
# 1, Dkt. No. 1 at ¶¶ 55-90. It is alleged that the couple, Patients 1 and 2, began treatment
in 2014 with CPM, and over the next several years, Dr. Cline, NP McKenna, and another
individual wrote numerous prescriptions for fentanyl, oxycodone, and valium. 	Id. 	It is
alleged that no effort was made by Defendants to wean the patients off these prescription
drugs and that those prescriptions regularly increased. Id. 	Patients 1 and 2 then moved
to Alabama but were unable to find a pain management doctor in their new area, as the
people consulted were not willing to prescribe pain medication at the levels that the
patients were receiving at CPM. Id. at ¶¶ 63-67. Accordingly, the medial professionals
at CPM continued to prescribe medication to the couple for years without regularly seeing
them in person and merely consulting with them over the phone. Id. at ¶¶ 67-73 & 79.
The CSA Complaint also alleges conduct with relation to a third patient, Patient 3,
who was in her seventies and suffered from numerous health issues, including arthritis
and COPD, and was a pack-a-day cigarette smoker. 	Id. at ¶¶ 91- 93. 	It is alleged that
Patient 3 was routinely prescribed hydrocodone, lorazepam, and carisoprodol by CPM
and Dr. Cline, even though she was not physically seen or examined by medical
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 15 of 22

- 16 -
professionals at CPM from February 17, 2017, to August 15, 2017. Id. at ¶ 95. Instead,
her brother appeared at CPM on his sister’s behalf and, on occasion, requested dosage
increases, which were granted. Id.
Dr. Martin Schaefer is a board-certified pain management specialist who has been
retained by the Government in Cline #1 and has provided a sworn affidavit concerning
Dr. Cline and his staff at CPM’s prescription methods, which has been attached as part of
the Government’s request for prejudgment relief. Dkt No. 3-38. Dr. Schaefer indicated
that the opioid dosages for Patients 1 and 2 were excessive, and at no time did the CPM
practitioners ever identify or treat any specific source of pain for them. Id. at ¶¶ 21-22.
As to CPM’s continued treatment of Patients 1 and 2 after they moved to Alabama, Dr.
Schaefer noted that “[p]rescribing to patients who are not geographically local to the
prescribers, who were not receiving routine physical examinations, for extended periods
of time is far outside the usual course of professional practice.” Id. at ¶ 30. With regard
to Patient 3, Dr. Schaefer noted that the combination of opioids, benzodiazepines, and
carisoprodol is extremely dangerous for her, especially as she was not routinely physically
examined at CPM, and that her reason for not coming in was not supported by CPM’s
records. Id. at ¶¶ 52-60.
In summary, Dr. Schaefer opined that Defendants Cline and NP Mckenna “failed
to meet the professional education, licensing, credentialing, and continuing educational
standards for medical practitioners in the pain management field.” Id. at ¶ 61. Further, it
is Dr. Schaefer’s opinion that “[t]he controlled substance prescriptions written for the
three patients at issue were not written for legitimate medical purposes within the usual
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 16 of 22

- 17 -
course of a professional practice.” Id. No contrary expert opinion has been submitted to
the Court by the Defendants in opposition to the present Motion for prejudgment
remedies, and in fact the Defendants have presented no arguments against the likelihood
of the Government being successful in the CSA Complaint. Therefore, the Court finds in
favor of the Plaintiff on this first step.
Having determined that the government has established a probable violation of the
CSA, the United States must next demonstrate the probable validity of the amount of the
debt claimed. See United States v. LabQ Clinical Diagnostics, LLC, 771 F. Supp. 3d at
457-59. 	Once again, “[e]stablishing . . . ‘probable validity’. . . requires only that the
Government meet the probable cause standard.” 	Id. at 431 (quotations omitted). 	The
United States can satisfy this element even where the parties dispute the ability of the
United States to obtain the full amount of damages that it seeks to attach. See, e.g., id. at
467; United States v. Miga, 2021 WL 2169486, at *2 (N.D. Tex. Apr. 23, 2021), report
and recommendation adopted, 2021 WL 2167069 (N.D. Tex. May 27, 2021).
Here, as noted in the Government’s brief, the maximum fine is based upon the
number of prescriptions that were issued multiplied by a fine rate of up to $82,950 per
prescription. Dkt. No. 4 at pp. 2 & 22. In the present case, the Government alleges that
there were 344 improper prescriptions issued, with 21 having been written by Dr. Cline
himself. Id. at pp. 21-22. The maximum fine would be over $1,500,000 for just the 21
prescriptions written by Dr. Cline, and would total $28,534,800 for all 344 prescriptions.
Id. 	Of course, the actual fine imposed upon a finding of such CSA violations is based
upon four factors—level of culpability, public harm, profits from the violation, and
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 17 of 22

- 18 -
defendant’s ability to pay—and is within the discretion of the District Court, which in this
case would be with Senior District Judge Glenn T Suddaby. See Advance Pharmaceutical
Inc. v. United States, 391 F.3d at 399. The Government notes that, in somewhat similar
cases, the fines have ranged from $200,000 to $1,200,000. 	See Dkt. No. 4 at p. 30. 	A
fine within the range predicted by the Government of $875,000, or half the total value of
the Bolton Property, is a reasonable probability in this case.
Having determined that the government has a reasonable probability of success on
the CSA claim, and further that the District Court would likely impose a substantial fine
against Dr. Cline pursuant to the CSA statute, the final issue is whether the Government
has, in its papers, shown “reasonable cause” to believe that, inter alia: (1) Dr. Cline has
or is about to (a) “assign, dispose, remove, conceal, ill treat, waste, or destroy property”
or (b) convert his “property into money, securities, or evidence of debt in a manner
prejudicial to the United States”; and (2) that Dr. Cline’s action has “the effect of
hindering, delaying, or defrauding the United States.” 28 U.S.C. § 3101(b)(1)(B) & (C).
Notably, “[t]he statute does not require that the debtor intend to hinder or defraud
the Government”; instead, “[t]he sole consideration is the effect of the debtor’s actions.”
United States v. LabQ Clinical Diagnostics, LLC, 771 F. Supp. 3d at 431, 462 (quotations
omitted) (emphasis added). 	Consequently, “[i]t is . . . immaterial whether Defendants
intended to hide assets from the Government,” as “[t]he relevant question is whether the
transfer[] had or would have the effect of hindering the Government’s asset recovery
efforts.” Id. at 463.
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 18 of 22

- 19 -
At this preliminary stage, the Court concludes that the Government has satisfied
its burden, primarily for the reasons identified in the preceding analysis in connection
with the Defendants’ Motions to Dismiss. 	The Government has now produced, in
evidentiary form, records and testimony regarding: Dr. Cline’s notification by the
Government of its investigation into CPM’s prescription practices and the likely
possibility of significant fines; the subsequent transfer of Dr. Cline’s primary asset, the
Bolton Property, to Ms. Cline; the fact that, after the separation agreement and the
purported transfer of the Bolton Property, Dr. Cline continued to utilize and maintain the
Bolton Property; Dr. Cline’s obtaining of the HELOC on the Bolton Property and
representation to the bank in the application for the HELOC that he was the sole owner
of the Bolton Property; Dr. Cline’s withdrawal of $150,000 from the HELOC in the years
after the transfer; Dr. Cline’s failure to disclose that asset or source of income in
connection with the discovery responses provided to the Government in the CSA case,
Cline #1; and Dr. Cline’s defense under the CSA statute that he has no substantial assets
or ability to pay a fine, a fact which confirms that the CPM practice was not a substantial
asset. 	See generally Dkt. No. 3. 	Here, the Court need not predict what the Defendant
will potentially do with his assets in the future, as the transfer of the Bolton Property has
already 	occurred, 	and 	that 	act 	will 	potentially 	have 	the 	effect 	of 	hindering 	the
Government’s efforts to collect a substantial fine. Therefore, I find, based on the evidence
before the Court, that the Government has satisfied the necessary standard to warrant the
prejudgment remedy of attachment.
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 19 of 22

- 20 -
While Ms. Cline has objected to her inclusion in this case on the basis that there is
presently no allegation that she engaged in any fraudulent conduct, Dkt. Nos. 17 & 32,
the Court notes that federal courts have granted applications for prejudgment remedies
even where such applications may affect a third party. See, e.g., United States v. DuBois,
2023 WL 9692124 (S.D. Fla. Nov. 14, 2023). In United States v. DuBois, a fraudulent
transfer action was brought by the government against a delinquent taxpayer alleging
“that [he] fraudulently transferred a valuable asset . . . to [his m]other for no consideration
in order to evade a $1.2 million tax judgment.” Id. at *1. In reviewing the government’s
ex parte application seeking a prejudgment writ of attachment, the court noted that,
“[a]lthough the [g]overnment currently holds a $1.2 million tax judgment against [the
son], it holds no such judgment against [the m]other.” Id. at *2. The court further noted
that “[t]he [g]overnment’s claim of a ‘debt’ against [the m]other . . . rest[ed] entirely upon
the fraudulent transfer claim.” Id. Nevertheless, the court found that the government had
satisfied its burden of showing the probable validity of the government’s claim for debt,
reasonable cause to believe the debtor was dissipating the asset, and the specific amount
of debt claimed. Id. at *2-6. As such, the court permitted the government to proceed with
its claim of entitlement to one half of the proceeds that the son had transferred to the
mother. Id. at *6.
As one final point, the Court is not unmindful of the arguments made by the
Defendants in this case, and particularly those of Ms. Cline. However, the Government
has established, based on the present record, its entitlement to the prejudgment remedy of
attachment. With that said, “[t]he court may at any time on its own initiative or the motion
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 20 of 22

- 21 -
of any interested person, and after such notice as it may require, make an order denying,
limiting, conditioning, regulating, extending, or modifying the use of any enforcement
procedure.” 28 U.S.C. § 3013. Similarly, “the debtor may submit a motion to the court
for a reduction of the amount of the attachment or its dissolution.” 	28 U.S.C. §
3102(g)(1). 	“[I]f after a hearing the court finds that the amount of the attachment is
excessive or unreasonable or if the attachment is for an amount larger than the sum of the
liquidated or ascertainable amount of the debt and the amount of interest and costs likely
to be taxed,” “[t]he court shall order a part of the property to be released.” 28 U.S.C. §
3102(g)(2).
IV. CONCLUSION
For the reasons stated herein, it is hereby
RECOMMENDED, that the Defendants’ Motions to Dismiss (Dkt. Nos. 16-17 &
32-33) be DENIED; and it is further
ORDERED, that the Government’s Application for a Prejudgment Writ of
Attachment in the amount of $875,000.00 (Dkt. Nos. 3-4) is GRANTED; and it is further
ORDERED, that the Government’s Application for a Prejudgment Writ of
Sequestration (Dkt. Nos. 3-4) is DENIED; and it is
ORDERED, 	that 	the 	Clerk 	of 	the 	Court 	serve 	a 	copy 	of 	this 	Report-
Recommendation and Order upon the parties to this action.
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 21 of 22

- 22 -
Pursuant to 28 U.S.C. § 636(b)(1), the parties have fourteen (14)3 days within
which to file written objections to the foregoing report. 	Such objections shall be filed
with the Clerk of the Court. FAILURE TO OBJECT TO THIS REPORT WITHIN
FOURTEEN (14) DAYS WILL PRECLUDE APPELLATE REVIEW. 	Roldan v.
Racette, 984 F.2d 85, 89 (2d Cir. 1993) (citing Small v. Sec’y of Health and Human Servs.,
892 F.2d 15 (2d Cir. 1989)); see also 28 U.S.C. § 636(b)(1); F ED . R. CIV . P. 72 & 6(a).
Dated: 	March 11, 2026
Albany, NY
3 If you are proceeding pro se and are served with this Order by mail, three additional days will be added to the
fourteen-day period, meaning that you have seventeen days from the date the order was mailed to you to serve and
file objections. F ED. R. CIV. P. 6(d). If the last day of that prescribed period falls on a Saturday, Sunday, or legal
holiday, then the deadline is extended until the end of the next day that is not a Saturday, Sunday, or legal holiday.
FED. R. C IV. P. 6(a)(1)(C).
Case 1:25-cv-01576-GTS-DJS Document 39 Filed 03/11/26 Page 22 of 22