Colorado U.S. Attorney's Office, Working With Other Offices, Collects $50,860,097.41 in Civil and Criminal Actions for the United States Taxpayers in Fiscal Year 2016

DENVER – Acting U.S. Attorney Bob Troyer announced today that the District of Colorado collected $50,860.097.41 for U.S. taxpayers.  The office made these collections state-wide, both in cases it handled exclusively as well as while working with other U.S. Attorney’s Offices and components of the Department of Justice.  Of this amount, $8,325,491.68 was collected in criminal actions and $42,534,605.73 was collected in civil actions.  In cases handled exclusively by the U.S. Attorney’s Office, it collected $30,301,946.70; $8,289,601.25 in criminal actions and $22,012,345.45 in civil actions. 

Attorney General Loretta E. Lynch announced on December 14, 2016, that the Justice Department collected nearly $15.4 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2016.  The $15,380,130,434 in collections in FY 2016 represents more than five times the appropriated $2.93 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 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.”

“We have a whole Division of elite professionals (our Asset Recovery Division) that is hard at work recovering money due to the United States taxpayers and victims of crime,” said Acting U.S. Attorney Bob Troyer.  “Thanks to their efforts, and in partnership with other U.S. Attorney’s Office and law enforcement agencies, this office routinely collects three times more than our annual budget through these efforts.  These recoveries also confirm our deep commitment to getting justice for crime victims.”

This part year, the U.S. Attorney’s Office collected $18,000,000 in a settlement with Evercare Hospice.  The settlement resolved a lawsuit brought by the government alleging that Evercare knowingly submitted or caused to be submitted false claims to Medicare for hospice care from Jan. 1, 2007, through Dec. 31, 2013, for Medicare patients who were not eligible for the Medicare hospice benefit because Evercare’s medical records did not support that they were terminally ill.  The government’s complaint alleged that Evercare’s business practices were designed to maximize the number of patients for whom it could bill Medicare without regard to whether the patients were eligible for and needed hospice.  These business practices allegedly included discouraging doctors from recommending that ineligible patients be discharged from hospice and failing to ensure that nurses accurately and completely documented patients’ conditions in the medical records.

The office also collected money from a criminal matter against Richard Armstrong and his co-defendants.  Armstrong and his associates were involved in perpetrating and benefiting from the tax refunds received from an illegal scheme.  Armstrong received approximately $1,600,000.00 in refunds by filing fraudulent tax returns along with fraudulent Forms 1099-OID.  Armstrong argues that the IRS is not a valid institution as it is not included in the Constitution, but he was convicted in the criminal case, and the government forfeited the airplane, one real property, and one-half interest in the other real property.  Upon sale of these assets, the U.S. Attorney’s Office was able to recover and return $589,979.98 to the Department of Treasury.  This is one of multiple collections from defendants who attempted to defraud or obstruct the IRS.

In addition, the Colorado U.S. Attorney’s Office has continued its work in the Department’s ongoing effort to hold mortgage lenders accountable for fraudulent conduct, achieving significant recoveries.  In separate settlements, Franklin American Mortgage Company and Primary Residential Mortgage Inc. each agreed to multi-million dollar payments to resolve separate allegations that the respective companies violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements.  Franklin American Mortgage Company agreed to pay $70 million over time, more than $14 million of which the company paid in fiscal year 2016.  Primary Residential Mortgage Inc. paid $5 million.

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.

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, Small Business Administration and Department of Education.

Additionally, the U.S. Attorney’s office in Colorado working with partner agencies and divisions, collected $7,317,124 in asset forfeiture actions in FY 2016.  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.