CHARLOTTE, N.C. -- The U.S. Attorney’s Office in Charlotte and the Western District of North Carolina obtained record collections – more than $5 billion – in civil and criminal actions in 2012.
The $5.05 billion was the fourth highest collection amount among the nation’s 94 U.S. Attorney’s Offices. Much of the money, federal prosecutors said, came from a $25 billion settlement with the nation’s five largest mortgage servicers, including Bank of America and Wells Fargo, to resolve allegations of abuse and fraud in mortgage loan servicing and foreclosures.
The $5 billion in collections represents a huge increase over the 2011 budget year, when the U.S. Attorney’s Office in Charlotte and the Western District of North Carolina collected more than $13.5 million in civil and criminal actions.
The vast majority of the 2012 money – about $5.04 billion – was collected in civil actions. More than $11.3 million was collected in criminal and civil forfeitures and more than $4.4 million was collected in criminal actions.
Nearly $6.4 million was paid to the federal court for distribution to victims of crimes, including individuals, companies and government agencies.
“Our office played an important role in recovering an unprecedented amount of civil and criminal collections on behalf of crime victims and taxpayers,” U.S. Attorney Anne Tompkins said.
“I commend the attorneys, investigators, auditors, and support staff in our office and our partner agencies for their dedication and tireless pursuit of justice. An important part of our work is protecting the public from fraud, waste and abuse, and recovering ill-gotten gains from those who seek to profit from illegal activities.”
A significant portion of the Western District’s record recoveries was collected in shared cases in which one or more U.S. Attorney’s Office or the U.S. Department of Justice’s litigating divisions were also involved.
Federal prosecutors in Charlotte cited a number of significant recoveries during fiscal year 2012:
• In February 2012, the Western District participated in a settlement with the nation’s five largest mortgage servicers – Bank of America Corp., Wells Fargo & Co., Citigroup Inc., JPMorgan Chase & Co. and Ally Financial Inc. The mortgage servicers agreed to pay a $25 billion settlement to resolve allegations of abuse and fraud in mortgage loan servicing and foreclosures. Under the agreement, the mortgage servicers agreed to devote $20 billion to consumer relief, while also paying $4.25 billion to the states, and $750 million to the U.S. Treasury.
• Nextcare Inc., which owned a chain of urgent care facilities in North Carolina, Arizona, Colorado, Texas, Ohio and Virginia, agreed to pay $10 million to settle federal and state allegations that it completed unnecessary testing and submitted false claims to Medicare and Medicaid. The Western District received about $3.5 million of the recovery – money that will be paid to the defrauded state and federal health care programs.
• Ricky Hardee was convicted of tax evasion and sentenced to 21 months in prison. He also was ordered to pay approximately $1.6 million in unpaid taxes to the IRS. The Western District of North Carolina collected the total amount of restitution owed, which was returned to the IRS.
• Alexander Klosek was convicted of conspiracy to commit fraud. Prosecutors said Klosek participated in a fraudulent investment business that solicited investors and offered estate planning services, all geared toward retirees. The Western District’s Asset Forfeiture Unit collected $997,899 to be paid as restitution for victims of the crimes.
• Donald Eugene Bess was convicted for a money laundering and insurance fraud conspiracy operated through his car sales business. The Western District’s Asset Forfeiture Unit collected $289,456 to be paid to victims as restitution.
Civil fines bring largest sums
The U.S. Attorney’s Offices, along with the Justice Department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the United States as well as 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 directly to the victim, criminal fines are paid to the Justice Department’s Crime Victims’ Fund, which distributes the money to state victim compensation and victim assistance programs.
The largest collections were from civil 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.
Civil debts also 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 and the Small Business Administration.
The U.S. Attorney’s Offices, working with partner agencies and divisions, collected $4.389 billion in asset forfeiture actions.
Forfeited assets are deposited into the Justice Department’s Assets Forfeiture Fund and Department of Treasury Forfeiture Fund and are used to restore funds to crime victims and for a variety of law enforcement purposes.