Justice Department Collects More Than $15.3 Billion in Civil and Criminal Cases in Fiscal Year 2016
Largest Settlements Derived From Cases Related to the Financial Crisis
Attorney General Loretta E. Lynch announced today that the Justice Department collected more than $15.3 billion in civil and criminal actions in fiscal year (FY) 2016 ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the approximately $3 billion appropriated budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” said Attorney General Lynch. “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year’s collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”
Civil collections account for more than $12 billion of the total collected and 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, mortgage, financial, 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 (HUD), Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Among the largest settlements: the $2.96 billion settlement with Goldman Sachs Group (Goldman Sachs), the $2.6 billion settlement with Morgan Stanley & Company (Morgan Stanley), and the $1.2 billion settlement with Wells Fargo Bank, N.A. (Wells Fargo), all of which related to practices arising from residential mortgage lending activities. In April 2016, the Justice Department announced the settlement with Goldman Sachs related to its conduct in the packaging, securitization, marketing, sale and issuance of residential mortgage backed securities (RMBS) between 2005 and 2007.
In February 2016, the Justice Department announced the settlement with Morgan Stanley to resolve claims related to marketing, sale and issuance of RMBS. As part of the agreement, Morgan Stanley acknowledged in writing that it failed to disclose critical information to prospective investors about the quality of the mortgage loans underlying its RMBS, and about its due diligence practices.
In April 2016, the Justice Department announced a settlement of civil mortgage fraud claims against Wells Fargo and Wells Fargo executive Kurt Lofrano, stemming from Wells Fargo’s participation in the Federal Housing Administration (FHA) Direct Endorsement Lender Program. In the settlement, Wells Fargo acknowledged and accepted responsibility for, among other things, certifying to HUD, during the period from May 2001 through December 2008, that certain residential home mortgage loans were eligible for FHA insurance when in fact they were not, resulting in the government having to pay FHA insurance claims when some of those loans defaulted.
The department also continued to collect monies that will go for penalties and natural resource restoration efforts for the largest environmental case in history, including the landmark $20.8 billion settlement with BP approved by the court earlier this year. The department collected nearly $378 million in FY 2016 scheduled payments to resolve these and other civil claims from the 2010 Macondo well blowout and the massive Deepwater Horizon oil spill that followed in the Gulf of Mexico.
More than $3 billion of the total was collected in FY 2016 from criminal cases, including the more than $772 million criminal penalty assessed against Alstom S.A., a French power and transportation company charged by the District of Connecticut in a foreign bribery scheme. The fine was the largest, ever, to resolve a foreign bribery case.
The total includes all monies collected as a result of Justice Department-led enforcement actions and negotiated civil settlements. It includes more than $12 billion in payments made directly to the Justice Department, and more than $3.3 billion in indirect payments made to other federal agencies, states and other designated recipients.
In measuring collections recovered in FY 2016, this figure necessarily includes some cases that were resolved in previous years but the proceeds of which were collected in FY 2016.