Colorado U.S. Attorney's Office Efforts Result In The Collection Of Over $5 Billion In Civil And Criminal Recoveries In Fiscal Year 2014

DENVER – U.S. Attorney John Walsh announced that the efforts of the U.S. Attorney’s Office for the District of Colorado resulted in the collection of over $5 billion in recoveries in Fiscal Year 2014 (October 1, 2013 to September 30, 2014).  Specifically, the U.S. Attorney’s Office in Colorado, working on its own and with other U.S. Attorney’s Offices and components of the Department of Justice, collected $5,308,286,656.99 ($5.3 billion). 

The $5.3 billion in Fiscal Year 2014 collections is the result of the following efforts by the Colorado U.S. Attorney’s Office: 

• $21,794,608.09 ($21.8 million) in criminal and civil action recoveries in Fiscal Year 2014.  ($16,644,526.42in criminal actions and $5,150,081.67 civil actions
• $17,764,953.00 ($17.8 million) in asset forfeiture actions.(Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.)
• $4.45 billion in penalties ($4.0 billion to the United States, $208 million to the FDIC, and approximately $246 million to five states) as a result of the overall $7 billion settlement with Citigroup regarding its misconduct in the Residential Mortgage-Backed Securities (RMBS) market.  This settlement came as a result of the joint investigation and close partnership between the Colorado U.S. Attorney’s Office and the U.S. Attorney’s Office for the Eastern District of New York. At the time of the settlement, the Citigroup penalty was the largest bank fraud civil penalty ever paid, and was only exceeded by the penalty in a subsequent settlement of a similar federal investigation against Bank of America.  The resolution also requires Citigroup to provide billions in relief to underwater homeowners, payments to distressed borrowers and affected communities through a variety of means including financing affordable rental housing developments for low-income families in high-cost areas. 
• Approximately $850 million in additional funds collected in 2014 from Bank of America pursuant to the 2012 National Mortgage Servicer Settlement in which the Colorado U.S. Attorney’s Office took a leading role.

 Overall, as Attorney General Eric Holder announced on November 20, 2014, the United States Department of Justice collected $24.7 billionin civil and criminal actions in the fiscal year ending Sept. 30, 2014.  The more than $24 billion in collections in Fiscal Year 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.

The total annual budget of the Colorado U.S. Attorney’s Office is approximately $18 million.  Thus, even putting aside the collections in the large national RMBS and mortgage servicing cases in which the Colorado U.S. Attorney’s Office played a leading role, the Office’s efforts in civil, criminal and forfeiture matters resulted in collection of nearly $40 million, more than twice its budget (approximately 220%).  Taking into account the recoveries obtained by the Colorado U.S. Attorney’s Office while working with the U.S. Attorney’s Office for the Eastern District of New York in the Citigroup case and with that office and other agencies in the National Mortgage Servicer case, the Office’s efforts have resulted in the collection of 294 times its annual budget (2944%) in Fiscal Year 2014.  (Note that the Colorado U.S. Attorney’s Office’s recent recovery of nearly $400 million in penalties and forfeitures from DaVita, Inc. in a False Claims Act matter is not included in these figures, as those funds were collected after Oct. 1, 2014, i.e., in Fiscal Year 2015.)

“The United States Attorney’s Office works tirelessly to investigate both civil and criminal misconduct and to collect money due to the taxpayers and to victims of that misconduct,” said U.S. Attorney John Walsh.  “The extraordinary efforts of our dedicated prosecutors and staff have resulted in the truly extraordinary recovery of over $5 billion in 2014.”

“Every day, the Justice Department’s 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 Eric Holder.  “Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy.  And as a result, I can report today that – during Fiscal Year 2014 – the Justice Department collected a total of $24.7 billion in civil and criminal actions.”

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.  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 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.

Most 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, Small Business Administration and Department of Education.
       
Over $10 million in the forfeiture collections arise from investment fraud schemes.  In 2014, the United States Attorney’s Office for the District of Colorado recovered over $8.2 million in fraud proceeds derived from a penny stock “pump and dump” scheme, which is being prosecuted in the Central District of California and the District of Delaware.  In addition, the District of Colorado recovered over $1.9 million in assets related to an alleged investment fraud scheme.  These funds have already been repaid to the investors.  At present, the defendant is awaiting trial.