Colorado U.S. Attorney's Office Efforts Result in the Collection of Over Half a Billion Dollars in Fiscal Year 2015

DENVER – U.S. Attorney John Walsh today announced that the District of Colorado, working on its own and with other U.S. Attorney’s Offices and components of the Department of Justice collected $539,446,849.97.  These collections come from key cases such as those against DaVita, Inc., MetLife, First RF Corporation and others.  Of this amount, $15,844.38 was collected in criminal actions and $539,431,005.59 was collected in civil actions.       

Of the total, the U.S. Attorney’s Office in Colorado itself collected $6,590,196.05 in Colorado-specific criminal and civil actions.  Of this amount, $5,257,087.32 was collected in criminal actions and $1,333,108.73 was collected in civil actions. 

Attorney General Loretta E. Lynch announced on December 3, 2015 that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending September 30, 2015.  Collections in FY 2015 represent more than seven and a half times the approximately $2.93 billion of the Justice Department's combined appropriations for the 94 U.S. Attorney's Offices and the main litigating divisions in that same time period. 

"The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch.  “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver.  I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”

“Each year the United States Attorney’s Office for the District of Colorado helps recover huge sums on behalf of the taxpayers.  This year that amount was over half a billion dollars,” said U.S. Attorney John Walsh.   “The extraordinary skill and dedication of our civil attorneys and staff, as well as our financial litigation unit staff, are to thank for the vast majority of these recoveries, and those amounts exceed the total budget of the U.S. Attorney’s Office each year not just by multiples, but by factors of ten and more.”

Included in this year’s collection are three high-level civil cases, some of which the Colorado U.S. Attorney’s Office worked with other U.S. Attorney’s Offices or with litigating divisions within the Department of Justice.  They include:

• A $350 million settlement with DaVita, Inc. to resolve allegations that DaVita, a dialysis company, used bogus economic manipulations to artificially reduce the apparent value of its dialysis centers.  The United States alleged that DaVita reduced these values to induce doctors to enter into joint ventures with DaVita, so that those doctors would then refer all their patients to DaVita clinics.  The United States alleged that these economic manipulations violated the Anti-Kickback Statute and the False Claims Act. 

• A $123.5 million settlement to resolve allegations that MetLife Bank N.A. violated the False Claims Act when it underwrote mortgage loans to be insured by the U.S. Department of Housing and Urban Development’s Federal Housing Administration (FHA).The United States alleged that MetLife knowingly failed to follow FHA’s rules and sought insurance for loans that did not meet the applicable requirements, leaving the government on the hook as the insurer when the loans defaulted.

• A $10 million settlement with First RF Corporation to settle allegations that First RF defrauded the United States when it supplied antennas for use in fighting improvised explosive devices in Iraq and Afghanistan.The United States alleged that First RF improperly overcharged the government for the equipment by making misrepresentations during contract negotiations.

• A $550,000 settlement with Esri, Inc. involving alleged overcharging of the Bureau of Land Management in contracts for time and materials.The Federal Acquisition Regulations for T&M contracts set rules for government contractors, and prevent them from submitting bills that include certain kinds of fees, such as travel and the cost of subcontractors.  The United States alleged that Esri added prohibited profit and fees to invoices for payment in T&M contracts without BLM’s knowledge or approval. 

The 2015 collections related to criminal cases include two tax fraud related cases, U.S. v. Gregory Laurence and U.S. v. Matthew Zuckerman.  Additional money was collected following a trial in U.S. v. Michael Griggs, an executive with Disaster Restoration, Inc. who conspired with subcontractors to inflate their bids for restoration costs.

The largest civil collections in 2015 were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws.  In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.

Additionally, the U.S. Attorney's Office in Colorado, working with partner agencies and divisions, collected $45,938,911.00 in asset forfeiture actions in FY 2015.  Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes. 

In addition to the substantial 2015 collections, the U.S. Attorney’s Office, working with other Department of Justice components, continues to recover large amounts of money for the taxpayers.  One example that will be applied to the FY 2016 collection, is the recent settlement with Franklin American Mortgage, who agreed to pay the United States $70 million to resolve allegations it violated the False Claims Act by knowingly originating and underwriting bad mortgage loans insured by the U.S. Department of Housing and Urban Development.

The U.S. Attorneys’ Offices, along with the Justice Department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.