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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of New York

FOR IMMEDIATE RELEASE
Monday, December 15, 2014

Eastern District Of New York U.S. Attorney’s Office Joins In Collections Of Over $5.3 Billion In Civil And Criminal Actions And Asset Forfeiture In Fiscal Year 2014

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 $5.3 billion in criminal and civil actions in Fiscal Year 2014. Of this total amount, $5,311,230,858.40 resulted from cases handled in conjunction with other U.S. Attorneys’ Offices and components of the Department of Justice. Collections from criminal and civil actions filed solely by the Eastern District of New York totaled $42,505,272.81.

In addition, working with partner agencies and divisions within the Department of Justice, the Eastern District forfeited another $39,521,538.00 in assets tainted by crime. Of this amount, $28,475,720 was forfeited in criminal cases and matters, and $11,045,818 was forfeited in civil cases and matters. Forfeited assets are deposited into the Department of Justice Assets Forfeiture 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 over $5.35 billion, which exceeds the $2.91 billion operating budget for U.S. Attorney’s Office nationwide.

Attorney General Eric Holder announced on November 19, 2014, 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 in that same period.

“The Eastern District of New York, in partnership with its colleagues in offices throughout the nation, is privileged to be part of a sweeping effort to address the harms caused by the financial crisis of 2008 and a multi-billion dollar resolution that includes provisions for relief to struggling and underwater homeowners as they seek to rebuild their lives and communities,” stated U.S. Attorney Lynch. “We stand firm in our ongoing collection and asset forfeiture efforts to protecting the public and recovering funds for the federal treasury and victims of crime and financial frauds.”

FY 2014 Collection Highlights

Financial Fraud

This past year, as part of President Obama’s Financial Fraud Residential Mortgage Backed Securities (RMBS) Working Group, and working with colleagues in the District of Colorado, the Eastern District of New York collected $ 4.2 billion in civil penalties from Citigroup, Inc., the largest penalty ever under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), to resolve claims related to Citigroup’s conduct in the packaging, securitization, marketing, sale and issuance of RMBS prior to January 2009. Citigroup acknowledged it made serious misrepresentations to the public, including the investing public, about the mortgage loans it securitized in RMBS. In addition to paying the historic penalty of $4.2 billion, Citigroup agreed to pay out $2.5 billion to provide relief to consumers in the form of loan modifications for underwater homeowners, refinancing for distressed borrowers, down payment and closing cost assistance to homebuyers, donations to organizations assisting communities in redevelopment and affordable rental housing for low-income families in high-cost areas.

Health Care Fraud

Working with the Department’s Civil Frauds Branch, the Eastern District of New York recovered $3,510,245.94 to resolve claims under the federal False Claims Act and New York False Claims Act against Enzo Biochem., Inc., and one of its subsidiaries, Enzo Clinical Laboratories. The settlement resolves allegations that Enzo was falsifying information in the claim submission process in order to inflate and secure reimbursements from the Centers for Medicare & Medicaid Services (“CMS”).

Collections Overview

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 of New York 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.

Updated July 6, 2015