Eastern District Of New York U.S. Attorney’s Office Joins In Collections Of Over $2.2 Billion In Civil And Criminal Actions And Asset Forfeiture In Fiscal Year 2013
U.S. Attorney Loretta E. Lynch announced today that the Eastern District of New York, working collaboratively with other offices as well as on its own, collected over $904 million in criminal and civil actions in Fiscal Year 2013. Of this total amount, $725,564,627.70 resulted from cases handled in conjunction with other U.S. Attorney’s Offices and components of the Department of Justice. Collections from criminal and civil actions handled solely by the Eastern District of New York totaled $178,848,788.63.
In addition, working with partner agencies and divisions, the Eastern District forfeited another $1,319,038,046 in assets tainted by crime. Forfeited assets are deposited into the Department of Justice Assets Forfeiture Fund and the Treasury Forfeiture Fund and are used to restore funds to crime victims and for a variety of law enforcement purposes. The combined joint collections and asset forfeiture recoveries for the Eastern District total of over $2.2 billion exceeds the appropriated $1.86 billion operating budget for all U.S. Attorneys’ Offices nationwide.
Attorney General Holder announced on Thursday that the Justice Department collected approximately $8.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2013. The more than $8 billion in collections in FY 2013 represents nearly three times the appropriated $2.76 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.
“The Department’s enforcement actions help not only to ensure justice is served, but also deliver a valuable return to the taxpayer,” said Attorney General Holder. “It is critical that Congress provide the resources necessary to match the Department’s mounting caseload. As these figures show, supporting our federal prosecutors is a sound investment.”
“Working with our colleagues across the nation as well as on our own, the Eastern District of New York stands firm in its resolve to protect the public and recover funds for the federal treasury and for victims of crime,” stated U.S. Attorney Lynch. “Collections and asset forfeiture are important tools in our arsenal as we seek to ensure that crime does not pay. We are honored to be part of this web of protection for the American people.”
FY 2013 EDNY COLLECTION HIGHLIGHTS
Health Care Fraud
This past year, working with colleagues in the District of Massachusetts and the Western District of Washington, the Eastern District of New York collected $748 million in a settlement with Amgen Inc. (Amgen). The Amgen settlement resolved criminal and civil liability arising from Amgen’s sale and promotion of Aranesp, a drug that treats anemia, as well as other drugs manufactured by Amgen. The settlement represents the single largest criminal and civil fraud settlement involving a biotechnology company in U.S. history. In its guilty plea, Amgen admitted that it illegally sold the drug with the intention that it be used at “off-label” doses that the FDA had specifically considered and rejected, and for an “off-label” treatment that the FDA had never approved and was later deemed to be extremely harmful to patients, all to increase profits. Amgen pled guilty to misdemeanor misbranding charges, paid a fine of $136 million, and forfeited $14 million. The civil settlement agreement encompassed allegations that Amgen: (1) promoted Aranesp and two other drugs that it manufactured, Enbrel and Neulasta, for “off-label” uses and doses that were not approved by the FDA and not properly reimbursable by federal insurance programs; (2) offered illegal kickbacks to a wide range of entities in an effort to influence health care providers to select its products for use, regardless of whether they were reimbursable by federal health care programs or were medically necessary; and (3) engaged in false price reporting practices involving several of its drugs. As part of the global settlement, Amgen also entered into a Corporate Integrity Agreement with HHS-OIG that will govern its conduct and ensure careful oversight of its branding and marketing practices.
Prescription Drug Initiative
In addition, as part of its Prescription Drug Initiative, the Eastern District worked with colleagues in the Southern District of Florida, the District of Colorado, and the Eastern District of Michigan in resolving an action for civil penalties in the amount of $80 million against Walgreen Pharmacies for its repeated violations of the Controlled Substances Act. The Eastern District action focused on Walgreens stores on Long Island that repeatedly filled bogus prescriptions for highly addictive painkillers that they knew or should have known had no legitimate medical purpose. The Eastern District’s Prescription Drug Initiative seeks to stem the tide of prescription drug and painkiller abuse through both civil and criminal enforcement as well as community education. In another Prescription Drug Initiative matter, medical residents at New York Methodist Hospital in Brooklyn were found to have issued close to 200 prescriptions for the stimulant Adderall without a legitimate medical purpose. Indeed, the Adderall was alternately consumed by the residents or sold in hand to hand transactions or on Craigslist. The hospital entered into a Consent Judgment that not only provided for a civil penalty for violating the CSA but also established a formal program to ensure future compliance.
False Claims Act
Working with the Department’s Civil Frauds Branch, the Eastern District recovered $5.25 million from RxAmerica pursuant to the settlement of one of the first federal False Claims Act cases to involve a Medicare Part D plan, which resolved claims that RxAmerica made false submissions to the Centers for Medicare and Medicaid Services in order to receive higher reimbursements for certain medications. In addition, the Eastern District recovered $8 million from CA, an Islandia, New York-based software and information technology company for knowingly double-billing federal agencies in connection with software maintenance contracts administered by the General Services Administration and Department of Defense.
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.
In the Eastern District as well as nationwide, 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.