U. S. Attorney’s Office Collects More Than $183 Million In Civil & Criminal Actions In FY 2011
Tampa, Florida - U.S. Attorney Robert E. O’Neill announced today that the Middle District of Florida collected $183,364,578 in Fiscal Year (FY) 2011 related to criminal and civil actions. Of this amount, $11,273,000 was collected in criminal actions and $172,091,578 was collected in civil actions. Additionally, the office collected $19,227,245 in criminal and civil forfeitures.
Nationwide, the 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. The $6.5 billion represents more than three times the appropriated budget of the combined 94 offices for FY 2011.
“Our district is very proud of the significant level of success we have enjoyed in this important part of our mission,” said U.S. Attorney O’Neill. “It is vitally important to protect the interests of victims of federal crime and the integrity of federal programs. In the coming fiscal year, we will rededicate ourselves to holding accountable those who seek to profit from their illegal conduct.”
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 $2.66 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. Our Financial Litigation Unit, which is charged with collecting criminal restitution and fines from defendants, posted more than $11 million in criminal collections, which were either disbursed to non-federal victims of crime, federal agencies, or deposited into the Crime Victims’ Fund.
Additionally, the U.S. Attorneys’ offices, working with partner agencies and divisions, collected $1.68 billion in asset forfeiture actions in FY 2011. 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 the Middle District of Florida, more than $23.8 million in forfeited funds were returned to crime victims in FY 2011, and $14 million in forfeited funds was shared with federal, state and local law enforcement agencies.
The statistics also indicate that $3.83 billion was collected by the U.S. Attorneys’ offices in individually and jointly handled civil actions. 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.
For the past two fiscal years, the Middle District of Florida has had more whistleblower cases filed under the False Claims Act than any other judicial district in the country. The significant recoveries in FY2011 were driven in large measure by two settlements in cases filed by private whistleblowers involving fraud against federal healthcare programs. Please see case highlights for details on United States ex rel. Austin v. Novartis Pharmaceutical Corp. and United States ex rel. Maul v. Ameritox, LLC.
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.
For further information, the United States Attorneys’ Annual Statistical Reports can be found on the internet at http://www.justice.gov/usao/reading_room/foiamanuals.html
Please see highlighted cases below from the United States Attorney’s Office for the Middle District of Florida.
Middle District of Florida Affirmative Case Highlights
United States ex rel. Austin v. Novartis Pharmaceuticals Corp.
On September 30, 2010, Novartis Pharmaceuticals Corporation agreed to pay $201 million to resolve its civil liability from a Middle District of Florida suit concerning Novartis’s illegal marketing of its Trileptal medication. Under the federal Food, Drug, and Cosmetic Act, once the Food and Drug Administration (FDA) approves a drug for a specific use, a company may not legally market that drug for other, unapproved uses. However, Novartis promoted Trileptal to physicians for prescription to patients suffering from psychiatric conditions and neuropathic pain despite the fact that the FDA had never approved Trileptal for such uses. Two former Novartis sales representatives filed a federal whistleblower suit under the False Claims Act in Tampa that alerted the United States of Novartis’s off-label marketing regarding Trileptal. The United States, through the efforts of the United States Attorney’s Office for the Eastern District of Pennsylvania, the Department of Justice’s Civil Division, and the United States Attorney’s Office for the Middle District of Florida, then intervened in the case to prosecute the suit on behalf of all United States citizens. Novartis agreed to pay $201 million to resolve the Middle District of Florida’s suit against it as part of a larger settlement involving other suits filed against Novartis in the Eastern District of Pennsylvania. From the $201 million, $150 million was allocated to damage suffered by federal health care programs. The settlement monies were received during FY2011 and were distributed to both the United States and state governments touched by Novartis’s off-label violations. The whistleblowers who filed the Tampa case received payments totaling more than $20 million from the federal share of the civil recovery.
United States ex rel. Maul v. Ameritox, LLC
In November, 2010, we resolved civil kickback claims in this qui tam case filed by a former sales executive of a diagnostic blood testing laboratory. The relator alleged that the laboratory, Ameritox, LLC, paid cash kickbacks to its client physicians to induce them to refer Medicare reimbursable drug testing business to the lab. The relator also alleged that the lab had paid in-kind kickbacks to physicians in the form of no cost collector personnel to physicians, also to induce referrals. After a lengthy investigation, we confirmed each practice and persuaded the defendant to settle the kickback claims in exchange for a payment of $16.3 million plus interest, to the United States and a handful of state Medicaid programs. The relator received a share of the recovery in excess of $3.4 million.
Middle District of Florida Asset Forfeiture Case Highlights
Most of the $19 million forfeited by the United States Attorney’s Office for the Middle District of Florida in FY2011 was the proceeds of fraud – including health care fraud, investment fraud, and federal program fraud – or drug trafficking. In accordance with the Department of Justice’s policy, the United States Attorney sought approval to use forfeited funds to compensate victims of crime for the financial losses, resulting in the return of almost $24 million in FY 2011. For instance, as a result of seven civil forfeiture cases completed in FY 2010 against bank accounts containing Medicare fraud proceeds, a total of $4,399,697.47 was returned to the victim, Centers for Medicare and Medicaid Services, in FY 2011. As the result of the prosecution of Frank Amodeo, approximately $7 million was returned to the Internal Revenue Service, the victim of Amodeo’s $200 million tax fraud. The majority of the funds returned to victims this year, however, were returned to individual victims of financial frauds.
Several of the forfeitures completed in FY 2011 will result in significant payments to victims in FY 2012. Among the cases in which the United States Attorney will seek to use forfeited funds to pay victims this fiscal year are the three discussed below.
United States v. Ben Bane
On August 23, 2011, Ben Bane was sentenced to 12.5 years in prison after a jury convicted him of a healthcare fraud scheme involving fraudulent Medicare billing. In addition to the prison sentence, the court imposed a forfeiture money judgment against Bane for more than $5.8 million, and ordered him to forfeit a number of assets to satisfy the judgment, including $1.425 million in cash, 2 mortgages, 17 real properties and 4 vehicles and vessels.
United States v. David Merrick
Merrick, along with co-conspirators, operated a massive fraud scheme, taking in more than $15 million from investors. Thus far, the United States has completed the forfeiture of $2,021,354.60, three pieces of real property and two luxury vehicles. Several million dollars in additional forfeitures are still pending.
United States v. Roy Ageloff
While in prison for committing securities fraud violations, Ageloff laundered the proceeds he obtained from his securities fraud violations (and failed to advise the court he had). Thus far, $1,728,297.27 has been obtained from the sale of real and personal property. An additional piece of real property is pending sale.
In addition to the civil and criminal forfeiture of fraud proceeds, the forfeiture of drug proceeds continues to have a significant impact on our community. The largest narcotics-related forfeiture completed in the Middle District of Florida in FY 2011 occurred in United States v. Jaime Mor-Saab. Mor-Saab pleaded guilty to knowingly and willingly participating in a money laundering conspiracy with Fabio Enrique Ochoa Vasco, a significant Colombian cocaine trafficker, to launder Ochoa’s drug trafficking proceeds. In his plea agreement, Mor-Saab admitted that, between 1987 and early 2007, he laundered millions of dollars for Ochoa and he agreed to forfeit all property he acquired as a result of his laundering. In FY 2011, the United States forfeited more than $1.3 million from seven bank accounts Mor-Saab maintained in the United States and the forfeiture of an additional $2.2 million was completed this month.
United States v. Michael Olaf Schütt involved the forfeiture of money involved in, or traceable to, the operation of several money transmitting businesses. Schütt had been receiving millions of dollars from foreign corporations involved in illegal gambling operations and transmitting those funds to gamblers in violation of federal and state law. As part of his plea agreement, Schütt agreed to forfeit the contents of ten bank accounts, funds from the escrow account of a title company, a 2009 Audi Q7 vehicle, a 2002 Porsche 911 Carrera, four Rolex watches, $10,000 in cash seized from his residence, a diamond engagement ring and a diamond wedding band. As a result of the forfeiture, $2,571,669.54 was deposited into the Treasury Forfeiture Fund.
Middle District of Florida Criminal Debt Collection Case Highlights
This year, the United States Attorney restructured the office, creating a new Asset Recovery and Victims’ Rights Division (ARVRD) charged with coordinating victim issues, forfeiting criminal proceeds, and enforcing criminal monetary penalties, including restitution orders. As a result of the reorganization, there is increased communication and coordination between Criminal Division Assistant United States Attorneys and their colleagues in the ARVRD, which in turn has significantly improved our collection efforts. Among the best examples of the success of the new ARVRD are the following cases. In United States v. Orpeza, within weeks after sentencing, the new ARVRD collected all $409,000.00 in restitution ordered by the Court. In United States v. Bane, through the use of writs of garnishment on bank accounts and execution on properties owned by Bane or which were held for his benefit, approximately $1,868,000 in restitution was collecting following the defendant’s sentencing.