SACRAMENTO, Calif. - Phillip A. Talbert, U.S. Attorney for the Eastern District of California, announced today that his office collected $49 million in criminal and civil enforcement actions in Fiscal Year 2016 (the twelve months ending Sept. 30, 2016), and an additional $3 billion in cases pursued jointly with other U.S. Attorney’s Offices and components of the U.S. Department of Justice.
“Our office is committed to aggressively pursuing monetary compensation in both criminal and civil matters from those who cause harm to the public,” said Talbert. “Each year we collect more money for victims and taxpayers than it costs to operate our office. This year’s financial recoveries are no different and they reflect the strength of our commitment to ensuring that the public does not bear the costs of those who commit criminal and civil violations in our district.”
The office’s 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.
Multiple major recoveries arose from allegations of procurement fraud and grant fraud. Menlo Worldwide Services LLC, Con-way Inc. and their subsidiaries Estes Forwarding Worldwide, LLC and Estes Express Lines, paid $13 million to resolve allegations under the False Claims Act that they overcharged the government in part by billing the cost of moving freight by air when it was actually shipped by ground. Bard College paid $4 million to resolve allegations of False Claims Act violations regarding the receipt and disbursement of federal student aid funds. E&A Protective Services-Bravo LLC and Eris Security, Inc. paid $340,000, plus all net proceeds from the liquidation of their assets, to resolve allegations that they submitted false claims in connection with a contract to provide armed security guard services at IRS facilities in Fresno, California and Ogden, Utah.
Mary’s Gone Crackers Inc., a natural food company based in Gridley, paid $1.5 million and agreed to establish a corporate compliance program following an investigation into potential criminal violations of federal immigration laws.
The Office also had multiple major recoveries arising from investigations of health-care fraud and Controlled Substances Act violations. In June, Marshall Medical Center paid $5.5 million to settle allegations that it violated the False Claims Act through billing improprieties. CRC Health Group paid $1 million to settle claims that it violated the Controlled Substances Act. An oncologist and his wife/office administrator paid $300,000 to settle allegations that they improperly billed Medicare for chemotherapy drugs purchased from an unlicensed foreign pharmaceutical distributor. The owner of the Script Life Pharmacy in Clovis paid $200,000 to settle civil claims for multiple violations of the Controlled Substances Act.
The Office collected over $7.5 million this year for damages caused by wildfires in the Eastern District of California.
By far the largest recovery through joint efforts with other arms of the Justice Department was $2.96 billion paid by Goldman Sachs Group, Inc. in settlement of claims arising from Goldman’s marketing, underwriting, issuing, and selling residential mortgage-backed securities in the years leading up to the financial crisis.
In addition, working with partner law enforcement agencies, the Office collected over $11 million 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.
The Office also worked with the Department’s other litigating divisions to enforce and collect 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.
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 Fiscal Year 2016. Those collections are more than five times the appropriated budget for all 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period (approximately $2.93 billion).
“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.”