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Tuesday, November 29, 2011

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U.S. Attorney's Office in District of Columbia Collects
More Than $500 Million In Financial Recoveries During Fiscal 2011
- Office Has Collected More Than $1.5 Billion Over Past Two Years -

     WASHINGTON - The United States Attorney's Office for the District of Columbia collected more than $500 million in criminal and civil actions and asset forfeitures during the most recent fiscal year, U.S. Attorney Ronald C. Machen Jr. announced today.

     In making the announcement, U.S. Attorney Machen noted that the office has collected more than $1.5 billion in criminal and civil actions and asset forfeitures during the past two fiscal years. The total reflect the office's continuing emphasis on aggressively pursuing financial recoveries on behalf of taxpayers and victims, U.S. Attorney Machen said.

     “Over the past year, we recovered more than $500 million for taxpayers and crime victims, a sum that vastly exceeds the total annual budget of the U.S. Attorney's Office,” said U.S. Attorney Machen. “We are proud to have protected the American taxpayer through vigorous and focused pursuit of financial recoveries. In the coming year, we will continue to hold accountable those who rip off the government or try to profit from illegal activity.”

     The totals for Fiscal Year 2011 include $282.8 million collected in criminal actions and $138.6 million in civil actions. In addition, approximately $90 million was collected in criminal and civil asset forfeiture actions. Mr. Machen established an Asset Forfeiture and Money Laundering Section within the office's Criminal Division last year, and that section's veteran attorneys work with prosecutors and investigating agencies at all stages of the criminal and civil processes to ensure that illegal proceeds are identified and located.

     Nationwide, the 94 U.S. Attorneys' offices collected $6.5 billion in criminal and civil actions during FY 2011, surpassing $6 billion for the second consecutive year. A portion of this amount, $1.3 billion, was collected in shared cases in which one or more U.S. Attorneys' offices or department litigating divisions were also involved. Additionally, the U.S. Attorneys' offices, working with partner agencies and divisions, collected $1.68 billion in asset forfeiture actions.

     The U.S. Attorneys= offices are responsible for enforcing and collecting criminal and civil debts owed to the United States and criminal debts owed to federal crime victims. In the District of Columbia, the Financial Litigation Unit in the Civil Division of the U.S. Attorney's Office aggressively handles these responsibilities.

Collections in Criminal Actions

     Collections in criminal actions include 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 of Justice=s Crime Victims= Fund, which distributes the money to state victim compensation and victim assistance programs.

     The $282.8 million collected in criminal actions by the U.S. Attorney's Office for the District of Columbia includes some significant amounts generated by cases handled primarily by the Department of Justice's litigating divisions. The U.S. Attorney's Office plays an important follow-up role in these cases by collecting this money.

     U.S. Attorney Machen noted that the District of Columbia's collections include a total of $23.5 million in criminal and civil penalties paid by the U.S. subsidiary of Belgian pharmaceutical manufacturer UCB S.A. The company pled guilty in June 2011 to the off-label promotion of its epilepsy drug Keppra in a case jointly handled by the U.S. Attorney's Office for the District of Columbia, the U.S. Attorney's Office for the District of Oregon, and the Department of Justice. All told, the company is paying about $34 million, including about $9.9 million designated as the state Medicaid share and $1.078 in asset forfeiture.

     The criminal collections totals also include $2 million from PPG Paints Trading (Shanghai) Co., Ltd., a wholly-owned Chinese subsidiary of United States-based PPG Industries, Inc. The company pled guilty in December 2010 to conspiring to violate the International Emergency Economic Powers Act and the Export Administration Regulations, and other related charges. As part of its plea agreement, PPG Paints Trading agreed to pay the maximum criminal fine of $2 million, and serve five years of corporate probation. The case was handled by the U.S. Attorney's Office for the District of Columbia. Under the terms of the related civil settlements, PPG Industries and PPG Paints Trading agreed to pay civil penalties of $750,000 and $1 million respectively. The case's combined $3.75 million in criminal and civil fines represent one of the largest monetary penalties for export violations in the history of the U.S. Department of Commerce's Bureau of Industry and Security.

     U.S. Attorney Machen said that the District of Columbia's totals also include the final installment of a $25 million criminal fine that was being paid by Chiquita Brands International, Inc., stemming from the corporation's guilty plea in 2007 to one count of engaging in transactions with a specially-designated global terrorist. As part of the plea agreement, the corporation paid $5 million a year, plus post-judgment interest. The U.S. Attorney's Office worked with the Department of Justice's National Security Division in prosecuting this case. The payment in FY 2011 totaled more than $7 million in this case, reflecting the final $5 million payment and all outstanding post-judgment interest.

Collections in Civil Actions

     The bulk of the $138.6 million in civil collections by the District of Columbia came 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.

     The civil collections include a payment of $93.5 million from Verizon Communications Inc., to settle a lawsuit alleging that the company overcharged the General Services Administration (GSA) on invoices dealing with government-wide voice and data telecommunications services contracts, U.S. Attorney Machen said.

     In addition, civil debts were collected on behalf of several federal agencies, including the collection of almost $1 million to date on a $3.1 million penalty that was imposed by the EPA on a company for environmental violations.

Asset Forfeiture

     U.S. Attorney Machen has emphasized the importance of asset forfeiture in efforts to fight crime and criminal organizations and to seek justice for victims. Asset forfeiture is a powerful law enforcement tool that can deprive criminals and criminal organizations of illegal proceeds and instrumentalities of crimes, recover property that may be used to compensate victims, and deter crime. Federal law provides authority to seize and forfeit the proceeds of virtually all serious federal offenses. Forfeited assets are deposited into the Department of Justice Asset Forfeiture Fund and Department of Treasury Asset Forfeiture Fund and are used to restore funds to crime victims and for a variety of law enforcement purposes.

     In one of the District of Columbia's more noteworthy cases, in September 2011, the Justice Department and the U.S. Secret Service returned approximately $55 million in forfeited funds to about 8,400 victims of the “AdSurfDaily” and related internet-based Ponzi schemes.

     The funds were seized by the Secret Service in connection with a criminal investigation of Thomas A. “Andy” Bowdoin Jr., of Quincy, Fla., the founder and operator of a business known as AdSurf Daily, Inc. (ASD). The U.S. Attorney's Office for the District of Columbia obtained civil forfeiture of the proceeds of the schemes, including numerous bank accounts, real property, luxury vehicles, and watercraft. These proceeds were returned to victims through an administrative process called “remission,” which was overseen by the Asset Forfeiture and Money Laundering Section of the Justice Department's Criminal Division and the Secret Service.

     In November 2010, in the related criminal investigation, Bowdoin was indicted in the U.S. District Court for the District of Columbia on five counts of wire fraud, one count of securities fraud, and one count of unlawful sale of unregistered securities. He has pleaded not guilty and is awaiting trial. An indictment is merely an accusation, and defendants are presumed innocent until, and unless, proven guilty in a court of law.

Nationwide Collections

     Nationally, Department of Justice statistics indicate that the total amount collected in criminal actions totaled $2.66 billion in restitution, criminal fines, and felony assessments.

     The statistics also indicate that $3.83 billion was collected by the U.S. Attorneys' offices in individually and jointly handled civil actions.

     The nationwide collection totals for the U.S. Attorneys' offices for FY 2010 and FY 2011 combined is $13.18 billion, which represents nearly a 52% increase over the FY 2008 and FY 2009 combined total of $8.55 billion.





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