United States Attorney's Office Recovers $94,000,000 in Fiscal Year 2013 - A Record for this District

        BUFFALO, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that the Western District of New York Office secured the highest amount of money for a given year in the Office’s history. Specifically, in Fiscal Year 2013, the Office recovered $94,220,047 as a result of wide-ranging efforts in criminal, civil and forfeiture cases. This money was used to repay victims of crime, provided as aid to law enforcement agencies, and in largest part, provided to taxpayers as a result of being transmitted to the United States Treasury. 

In making the historic announcement, U.S. Attorney Hochul praised the hard work and dedication of Office attorneys and support staff that sought not only to put convicted defendants in jail, but took the profit out of crime in a more literal sense. “This Office strives mightily to protect the public from those who would cause it harm. From violent gang members to child predators, cyber criminals, and major fraudsters, we seek to ensure that the worst of the worst are identified and prosecuted to the fullest extent of the law. But our Office also protects taxpayers. By using civil law and forfeiture, we recover money that helps repay victims of crime, aids local law enforcement, and fills the American Treasury. In other words, we don’t just take the profit out of crime, we use it for the public good.” 

U.S. Attorney Hochul stated that in order to put the $94 million recovered by his Office into proper perspective for the public, the recovered money represents more than nine times the amount of money it took to operate the entire United States Attorney’s Office for the year. “Because our budget is approximately $10 million,” said Hochul, “the recovered money in reality means taxpayers spent nothing for the protection and safety provided by this Office, and still also obtained an additional $84 million in money it did not anticipate receiving through other means.” 

As for how the record recoveries came about, the Office collected $75,146,101 in criminal and civil actions. Criminal actions, which include fines and restitution,   totaled $20,142,677.26, $20,004,017 of which was returned to victims of crime. The Office also collected $55,003,424 in civil actions, which include proceedings involving health care fraud, government fraud, foreclosures and more.

In addition, the Office collected $19,073,946 in criminal and civil forfeitures.  Forfeitures generally involve proceeds of crime, as well as property used to commit crime. Of that amount, $3,481,607 was shared with state and local law enforcement partners who work with the U.S. Attorney’s Office and the Department of Justice.

Hochul also stated that in the four years of the current administration, the amount of money recovered by the Office exceeded $208,900,000. This is a result of the Office recovering in Fiscal Year 2010, $31,800,000, in 2011, $29,300,000, and in 2012, $53,600,000.

Beyond recovering money, Hochul also reported that 109 dangerous firearms, along with ammunition, and 56 computers were forfeited in FY 2013.

In addition to the $94,220,047 collected locally, Hochul also noted that the WDNY worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional amount of over $534,500,000.00 in cases pursued jointly with these offices including:

The following cases are an example of a successful forfeiture and affirmative civil enforcement concluded this past year in the Western District of New York:

United States vs. Zaveri:

Ashvin Zaveri of Honeoye Falls, N.Y. was indicted on 16 counts of mail fraud, wire fraud and money laundering. Between April 2003 and March 2009, Zaveri was accused of defrauding investors who had invested approximately $35,000,000 in Aoil and natural gas exploration partnerships in Tennessee and Kentucky through his company Zaveri Oil & Gas, Ltd. Over 40 partnerships were offered for investment by Zaveri. The defendant died on August 27, 2010, a week before his plea was scheduled and the criminal case was abated. As a result, the United States government filed a civil forfeiture complaint against 11.5 million dollars in life insurance proceeds, $541,395.06 contained in an M&T Bank account and other assets as property involved in the offense or traceable to the entire Ponzi scheme. The government forfeited $8,938,322.93, most of which was returned to victims.

United States vs. Ista Pharmaceuticals:  

ISTA Pharmaceuticals, Inc. paid $33,500,000 to resolve criminal liability and false claims act allegations. The company was convicted of conspiracy to introduce a misbranded drug into interstate commerce and conspiracy to pay illegal remuneration in violation of the Federal Anti-Kickback Statute for misbranding the drug Xibrom, an anti-inflammatory drug approved by the FDA used to treat pain and inflammation following cataract surgery. Ista employees promoted Xibrom for unapproved new uses.

United States vs. Gizzi:

In July 2013, John P. Gizzi was convicted of filing false tax returns in 2008 and 2009. In addition, a corporation owned by Gizzi, Rochester Machinery Suppliers, Inc., was convicted of aiding and abetting the preparation of a false tax return. The defendant paid $1,901,633 in criminal restitution for taxes he owed and forfeited $1,500,000 to the Government in a related proceeding brought by the United States Attorney's Office. Rochester Machinery Suppliers, Inc., Gizzi's corporation paid a $500,000 fine for its role in assisting Gizzi's tax crimes. Finally, the defendant paid $7,623,431 to settle related civil claims with the Internal Revenue Service. This brings the total paid by Gizzi to the Government to $11,525,064. 

The following is an example of a case that the Western District of New York worked with other U.S. Attorney’s Offices and components of the Justice Department to bring to a successful conclusion: 

United States vs. Countrywide Mortgage:

The Affirmative Civil Enforcement and Asset Forfeiture Financial Litigation units participated in a shared recovery of $335,194.878.10 between the Civil Rights Division of Main Justice, along with numerous other districts across the country in a settlement in the United States vs. Countrywide case. This settlement resolved allegations that Countrywide Financial Corporation and its subsidiaries engaged in a widespread pattern or practice of discrimination against qualified African-American and Hispanic borrowers in their mortgage lending from 2004 through 2008. The settlement provides compensation for victims of Countrywide’s discrimination during a period when the company originated millions of residential mortgage loans as one of the nation’s largest single-family mortgage lenders. There were over 40 victims in the Western District of New York.

For further information, the United States Attorneys’ Annual Statistical Reports can be found on the internet at:

http://www.justice.gov/usao/resources/reports/.