The U.S. Attorney’s Office for the Eastern District of California Collects over $240M in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2017

SACRAMENTO, Calif. — U.S. Attorney McGregor W. Scott announced today that the Eastern District of California collected $82,182,771 in criminal and civil actions in Fiscal Year 2017. Of this amount, $13,278,653 was collected in criminal actions and $68,904,118 was collected in civil actions. The Eastern District of California also worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $162,370,250 in cases pursued jointly with these offices. Of this amount, $15,414 was collected in criminal actions and $162,354,835 was collected in civil actions.

Overall, the Justice Department collected just over $15 billion in civil and criminal actions in the fiscal year ending September 30, 2017.

U.S. Attorney Scott stated: “Every year, we recover far more money for victims and taxpayers than it costs to operate our office. These collections are critical to the Department’s mission of holding wrongdoers accountable, seeking restitution for victims, and pursuing funds that belong to American taxpayers.”

A significant portion of the monies collected were for actions involving allegations of Controlled Substance Act violations, including $150 million from McKesson Corp., $5 million from CVS Pharmacy Inc., and $11.75 million from Costco Wholesale. Other settlements were for health care fraud including a $9.86 million payment by Walgreen Co. to resolve allegations that it violated the federal False Claims Act when it knowingly submitted claims for reimbursement to California’s Medi-Cal program that were not supported by applicable diagnosis and documentation requirements. Given the nationwide opioid epidemic, our office will continue to focus on these types of investigations.

Our office will also continue to focus on procurement fraud to ensure that those awarded government contracts comply with all associated requirements for receipt and use of that money. This year Sierra Nevada Corporation, a Nevada corporation that provides services to federal agencies, paid $14.9 million to resolve allegations that it violated the federal False Claims Act when it knowingly misclassified certain costs, resulting in inflated overhead rates being paid in various defense and space contracts. Cityside Management Corporation paid $4.3 million to settle allegations that it violated the False Claims Act by improperly billing the U.S. Department of Housing and Urban Development for the work of Cityside’s subcontractors.

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 United States 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, fire, 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 the Eastern District of California, working with partner agencies and divisions, collected $10,377,430 in asset forfeiture actions in fiscal year 2017. 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.