U.S. attorney collects millions in penalties

Published: Thursday, Jan. 16, 2014 - 12:00 am

Crime pays.

Just ask the federal justice establishment.

The office of U. S. Attorney Benjamin Wagner in Sacramento collected more than $63.8 million in criminal and civil actions in the fiscal year ended Sept. 30, Wagner announced last week.

In addition, he said, his Eastern District of California office worked with counterparts in other districts in joint pursuits that yielded more than $11.9 million, bringing total collections involving his office to more than $75.6 million.

“These figures represent actual dollars received, not judgment amounts,” Wagner said.

On top of that, he said, his office partnered with other federal agencies and divisions in the forefeiture of assets valued at more than $6.1 million. These assets are used to restore lost funds to crime victims and for a variety of law enforcement purposes.

The sprawling 34-county Eastern District is bounded by the Tehachapis on the south, the Oregon border on the north, the Coast Range on the west and the Nevada border on the east. The U. S. attorney has a branch office in Fresno.

The 94 offices of U. S. attorneys, along with the parent U. S. Department of Justice’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the United States and criminal debts owed to victims of federal crimes. The law requires defendants to pay restitution to victims who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are distributed to state agencies providing compensation and assistance to victims.

“Financial recoveries are a critical part of the department's mission to hold those who violate the law accountable for the injury they cause to victims and the general public,” Wagner said. “Each year, we collect far more for victims and taxpayers than the total cost of operating this office.”

At the same time as Wagner's announcement, U.S. Attorney General Eric Holder announced in a news release that the department overall collected approximately $8.1 billion in civil and criminal actions in fiscal year 2013. The amount “represents nearly three times the appropriated $2.76 billion budget for the U. S. attorneys’ offices and the main litigating divisions in that same period,” Holder said in the release.

The largest civil collections were from affirmative enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of specific agencies.

Major recoveries in the Eastern District in fiscal year 2013 included $45 million from Pacific Gas & Electric Co. and its contractor Provco for damages caused by the Power fire, which burned approximately 13,000 acres of the Eldorado National Forest in October 2004, and an additional $5.5 million from PG&E and its contractors ACRT Inc. and Davey Tree for damages caused by the James fire on the Mendocino National Forest in June 2008.

The district also recovered $14.2 million in connection with a settlement of allegations that Roseville-based Adventist Health improperly compensated physicians who referred patients to Adventist's White Memorial Medical Center, a teaching hospital in Los Angeles, in violation of the federal Anti-Kickback Act and Stark statute.

The announcements last week did not include a $13 billion settlement of fraud claims against JP Morgan Chase & Co. in connection with worthless or near-worthless residential-mortgage-backed securities peddled as sound investments. Wagner's office led the investigation of JP Morgan, the nation's largest bank.

Although several billion dollars has already been paid on that settlement, the payments were received in fiscal year 2014, which began Oct. 1.

“Financial recoveries are a critical part of the department's mission to hold those who violate the law accountable for the injury they cause to victims and the general public,” Wagner said.

Call The Bee’s Denny Walsh, (916) 321-1189.

Read more articles by Denny Walsh

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