Justice Department Collects More Than $24 Billion in Civil and Criminal Cases in Fiscal Year 2014
Attorney General Eric Holder announced today that the Justice Department collected $24.7 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2014. The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion 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 Justice Department’s federal prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people,” said Attorney General Holder. “Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy. And it shows the fruits of the Justice Department’s tireless work in enforcing federal laws; in protecting the American people from violent crime, national security threats, discrimination, exploitation, and abuse; and in holding financial institutions accountable for their roles in causing the 2008 financial crisis.”
The amount is more than three times the $8 billion collected in FY 2013. The largest civil collections were from affirmative civil enforcement cases, many of which were brought under the whistleblower provisions of the False Claims Act, in which the United States recovered government money lost to fraud or other misconduct or collected from individuals and/or corporations for violations of federal health, safety, civil rights, tax, 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, Small Business Administration and Department of Education.
The total includes all monies collected as a result of Justice Department-led enforcement actions and negotiated civil settlements. It includes approximately $13.7 billion in payments made directly to the Justice Department, and $11 billion in indirect payments made to other federal agencies, states and other designated recipients.
In measuring collections recovered in FY 2014, this figure necessarily includes some cases that were resolved in previous years but the proceeds of which were collected in FY 2014.
The largest single source of collections came from civil penalties paid by financial institutions to resolve financial fraud claims stemming from the 2008 financial crisis, including significant amounts paid by JPMorgan and Citigroup Inc, to resolve federal and state civil claims related to the packaging, marketing, sale and issuance of residential mortgage-backed securities (RMBS). Both resolutions include record penalties under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) and in addition, also provide billions of dollars of relief to struggling homeowners.
Department collections also included hundreds of millions in fines from an ongoing investigation into institutions involved in the manipulation of the London Interbank Offered Rate (LIBOR), including UBS Securities Japan Co. Ltd., and RBS Securities Japan Ltd., a wholly owned subsidiary of The Royal Bank of Scotland plc (RBS). Hundreds of millions in additional collections resulted from the department’s ongoing investigation into international price-fixing and bid rigging in the auto parts industry. For instance, Bridgestone Corp., a company based in Tokyo, Japan, agreed to plead guilty and to pay a criminal fine for its role in a conspiracy to fix prices of automotive anti-vibration rubber parts installed in cars sold in the United States and elsewhere.
The department continued to make polluters pay to safeguard the environment and the taxpayer, collecting several multi-million dollar payments in connection with environmental cleanups. This included a May 2014 settlement with Titanium Metals Corporation (TIMET) under which the titanium-parts manufacturer paid $14 million in civil penalties under the Toxic Substances Control Act (TSCA) and the Resource Conservation and Recovery Act (RCRA) and agreed to perform an extensive cleanup following the unauthorized manufacture and disposal of PCBs (polychlorinated biphenyls) at its manufacturing facility in Henderson, Nevada.
The department also collected millions in criminal penalties after resolving investigations into violations of the Foreign Corrupt Practices Act (FCPA). For instance, Diebold Inc., an Ohio-based provider of integrated self-service delivery and security systems, pleaded guilty to violating the FCPA by bribing government officials in China and Indonesia and falsifying records in Russia in order to obtain and retain contracts to provide ATMs to state-owned and private banks in those countries.