U.S. Attorney's Office responsible for collection of $5.6 BILLION in Civil and Criminal actions in FY 2012
DENVER – U.S. Attorney John Walsh announced today that the District of Colorado was responsible for the recovery of over $5.6 billion ($5,694,709,235.92) in Fiscal Year (FY) 2012 related to criminal and civil actions and forfeitures. Of this amount, over $5.6 billion ($5,683,718,568.81) was recovered in civil actions, over $8 million ($8,117,991.23) in criminal and civil forfeitures, and over $3 million ($3,872,675.88) was recovered in criminal actions. The total amount recovered in these matters, criminal and civil, not counting forfeitures was over $5.6 billion ($5,686,591,244.69). These amounts were recovered on behalf of the United States Treasury, states, and consumers. A portion of this amount, $5.3 billion, was collected in shared cases in which one or more U.S. Attorneys’ offices or department litigating divisions were also involved.
“A core mission of the United States Attorney’s Office here in Colorado is to protect the taxpayers and citizens of Colorado -- and of the United States,” said United States Attorney John Walsh. “This year the commitment, skill and hard work of attorneys and staff in Colorado’s U.S. Attorney’s Office have led to truly extraordinary financial recoveries for our nation and for the people of Colorado. It is an honor to work with these dedicated public servants – every Coloradan can be proud of their outstanding efforts and successes.”
The total amount of civil recoveries includes matters where the Colorado U.S. Attorney’s Office worked with other U.S. Attorney’s Offices and Department of Justice litigating divisions. Significant examples of shared matters where the Colorado U.S. Attorney’s Office played a central role include:
Mortgage servicer settlement. In February 2012, the nation’s five largest mortgage servicers – Bank of America, Wells Fargo, Citigroup, JPMorganChase, and Ally – agreed to pay a $25 billion settlement to resolve allegations of abuse and fraud in mortgage loan servicing and foreclosures. Under the agreement, the servicers agreed to devote $20 billion to consumer relief, while also paying $4.25 billion to states, and $750 million to the U.S. Treasury.
GSK settlement. In July 2012, GlaxoSmithKline LLC (GSK) agreed to pay $3 billion to resolve its liability arising from its unlawful promotion of certain prescription drugs, its failure to report safety data, and alleged false price reporting practices. The settlement, which resolved claims involving several GSK products (Paxil, Wellbutrin, Advair, Lamictal, Zofran, Imitrex, Lotronex, Flovent and Valtrex), was the largest health care fraud settlement in U.S. history.
In addition to these national investigations where the Colorado U.S. Attorney’s Office played a significant role, the Colorado U.S. Attorney’s Office also obtained several other significant recoveries. Examples from FY2012 include:
Health care fraud. In January 2012, Denver Health and Hospital Authority paid the United States and the State of Colorado $6.3 million to settle allegations that it overbilled Medicare and Medicaid by misclassifying patients for hospital admissions. In June 2012, Dr. Steven Spillers paid $747,013.20 to settle allegations that he overbilled Medicare by billing for more hours than he actually worked.
Oil and gas fraud. In March 2012, the Gary-Williams Energy Company paid $2,764,748.76 to resolve allegations that it violated the False Claims Act by not paying royalties it owed to the Department of Interior’s Office of Natural Resources Revenue, an office in Lakewood, Colorado. In July 2012, Louis Dreyfus Energy Services paid $4,084,000 to settle similar allegations.
Foreclosure fraud. In March 2012, Bella Homes, LLC, and its principals, which had perpetrated a foreclosure-rescue scam in Colorado and nationally, agreed to pay $1.2 million to a state fund for victims of the scam, to resolve a civil action brought jointly by the Colorado U.S. Attorney’s Office and the Colorado Attorney General’s Office.
Harm to public lands from forest fires. In August 2012, the Cañon City Royal Gorge Railroad paid $300,000 to the United States for damages incurred to public lands from a fire that the United States alleged was caused by the Railroad.
Defense contractor integrity. In September 2012, Paragon Dynamics, Inc., a defense contractor based in Aurora, Colorado, paid $1.15 million to settle allegations that it improperly obtained bid and proposal information from a competitor, Raytheon Corporation, on contracts for the National Reconnaissance Office.
The U.S. Attorneys’ Offices, along with the 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. Statistics indicate that the total amount collected in criminal actions totaled $3.035 billion in restitution, criminal fines, and felony assessments. 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 directly to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The statistics also indicate that $10.12 billion was collected by the U.S. Attorneys’ offices in individually and jointly handled civil actions involving the False Claim Act. The largest civil collections 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, and Small Business Administration.
Additionally, the U.S. Attorneys’ offices, working with partner agencies and divisions, collected $4.389 billion in asset forfeiture actions in FY 2012. Forfeited assets are deposited into the Department of Justice Assets Forfeiture Fund and Department of Treasury Forfeiture Fund and are used to restore funds to crime victims and for a variety of law enforcement purposes.
In FY 2012, the U.S. Attorney’s Offices and the Justice Department’s Civil Division, working together, recovered under the False Claims Act alone nearly $5 billion ($4.959 billion) in settlements and judgments – a new record for a single year.