U. S. Attorney's Office Recovers More Than $51 Million In Debt Owed To U.S. Taxpayers In FY 2012
Tampa, FL - U.S. Attorney Robert E. O'Neill announced today that the Middle District of Florida collected $51,229,188.08 in Fiscal Year (FY) 2012 related to criminal and civil actions. Of this amount, $6,579,839.09 was collected in criminal actions and $44,649,348.99 was collected in civil actions. Additionally, the office collected $48,138,283.71 in criminal and civil forfeitures. Finally, the district's Civil Division achieved recoveries in excess of $39 million as the result of three major civil fraud settlements.
Nationwide, the U.S. Attorneys' offices collected $13.1 billion in criminal and civil actions during FY 2012, more than doubling the $6.5 billion collected in FY 2011. A portion of this amount, $5.3 billion, was collected in joint cases in which one or more U.S. Attorneys' offices or department litigating divisions were also involved. The $13.1 billion represents more than six times the appropriated budget of the combined 94 offices for FY 2012.
Working with our investigative partners to enforce the public laws is a critical part of our overall mission," said U.S. Attorney O'Neill. "Equally important is utilizing our capabilities to protect the interests of crime victims and replenish our federal resources. Through our collections and recovery efforts, we are holding criminals accountable for their offenses."
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. 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.
The Middle District of Florida has historically had one of the busiest whistleblower case dockets in the country, and in FY2012 placed seventh among the 94 judicial districts in cases filed under the False Claims Act. The significant recoveries in FY2012 in the Civil Division's affirmative enforcement program were driven in large measure by two settlements in cases filed by private whistleblowers involving fraud against federal healthcare programs, and in a direct referral from the Department of Defense. (See case highlights for details on United States ex rel. Hellein v. WellCare Healthplans, Inc., United States ex rel. Freedman v. SuarezHoyos, et al. and United States v. Kaman Dayron, Inc.)
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.
See highlighted cases below from the U.S. Attorney's Office for the Middle District of Florida.
Middle District of Florida Affirmative Case Highlights
United States ex rel. Hellein v. WellCare Health Plans, Inc.
In April 2012, we announced a civil settlement that accepted $137.5 million to resolve claims by a number of relators asserted in four separate qui tam lawsuits brought under the False Claims Act against a Medicare Part C provider, WellCare Health Plans, Inc. The defendant will pay an additional $35 million if the company is sold within three years. The lawsuits alleged a number of fraud schemes by WellCare, among them: (1) falsely inflating the amount it claimed to be spending on medical care in order to avoid returning money to Medicaid and other programs in various states; (2) knowingly retaining overpayments it had received from Florida Medicaid for infant care; (3) falsifying data that misrepresented the medical conditions of patients and the treatments they received; (4) engaging in certain marketing abuses, including the "cherrypicking" of healthy patients in order to avoid future costs; (5) manipulating "grades of service" or other performance metrics regarding its call center; and (6) operating a sham Special Investigations Unit. The allegations were pursued in parallel criminal and civil proceedings. The criminal case against WellCare concluded with a deferred prosecution agreement under which WellCare paid, in previous years, $40 million in restitution and an additional $40 million in forfeiture, bringing the total recovery to $217.5 million. The criminal trial against WellCare officers for their role in the fraud is scheduled for February 2013.
United States ex rel Freedman v. SuarezHoyos, et al.
We settled our claims against one of the defendants in this civil qui tam case alleging an illegal kickback relationship between a local pathology laboratory and a dermatologist. The pathologist had agreed to provide the dermatologist with an opportunity to bill Medicare and other federal health programs for work that the dermatologist did not perform. The pathologist prepared a diagnosis of biopsy slides and permitted the dermatologist to submit a claim as though he had performed the diagnostic analysis. The pathologist defendant agreed to settle the civil claims under the False Claims Act against him in return for $1 million.
United States v. Kaman Precision Products, Inc. d/b/a Kaman Dayron, Inc.
This was a False Claim Act case directly referred to the U.S. Attorney’s Office by the Department of Defense. It was an action filed against a munitions supplier that substituted components in fuses intended for bunkerbuster bombs. The complaint alleged that the supplier knowingly provided bombs with fuzes that did not meet contract specifications. The fraud claims were settled globally with other cases against the defendant before the Armed Services Board of Contract Appeal. The defendant agreed to a settlement that paid $4.75 million to the government, imposed a termination for default of its contract, and required a monitored compliance program.
Middle District of Florida Asset Forfeiture Case Highlights
United States v. Eduardo Blanchet, et al.
In February 2012, a jury found Eduardo Blanchet and Daniel Guillan guilty of conspiring to defraud the United States and for committing wire fraud in relation to MiLanguages Corporation's acquisition of a $100 million contract to provide foreign language training to the military. The evidence showed that the defendants ran B.I.B. Consultants, a company that had been awarded a large contract with the military in 2002. This contract rendered B.I.B. ineligible to bid on subsequent small business contracts with the military. To circumvent this restriction, the defendants formed MiLanguages, recruited a sham owner, and fraudulently bid on a $100 million small business set aside contract. The defendants lied about their true ownership and control over MiLanguages during a size protest before the Small Business Administration, and MiLanguages was awarded the contract in 2007. A subsequent federal investigation revealed that the defendants had always maintained ownership and control over the company and that they had profited by approximately $11 million from their fraud. As part of their sentence, the defendants were ordered to forfeit, to the United States, $10,917,092 in proceeds of their scheme, an amount equal to $8,217,092 from seized accounts and a $2,700,000 forfeiture money judgment, which has been fully satisfied through the sale of various real properties belonging to the defendants.
U.S. v. Zachary Rose, et al.
This criminal forfeiture case forfeited, among other property, $2,529,284.99 from seized bank accounts which were proceeds arising from a significant conspiracy to distribute narcotics from a pain clinic - a pill mill case. The vast majority of the funds were seized from the owner of the clinics, Zachary Rose. The sentencings of all defendants, including Rose, have been re-scheduled for early 2013.
United States v. Asset Identified
This was a civil forfeiture case commenced against 14 bank accounts, four cars, two escrow accounts, and a real property that were traceable to the proceeds obtained as a result of a Ponzi scheme being run by the targets of two separate (but related) criminal investigations. After the conclusion of the civil forfeiture case, two individuals - John Fowler and Jeffrey Fowler - entered guilty pleas for their role in the scheme. A third individual - Terry Koontz - has a change of plea hearing scheduled later this month. More than $2 million was forfeited from the bank and escrow accounts. The cars and real property have yet to be sold. Once the defendants are sentenced, we will request permission from the Asset Forfeiture and Money Laundering Section (AFMLS) to use the forfeited funds to partially satisfy the restitution order.