U.S. Attorney’s Office Collects $20,557,036 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2016

Assistant U. S. Attorney Blair Perez (619) 546-7963    

NEWS RELEASE SUMMARY – December 16, 2016

SAN DIEGO – U.S. Attorney Laura E. Duffy announced today that the Southern District of California collected $20,557,036 in criminal and civil actions in Fiscal Year 2016. Of this amount, $11,664,495 was collected in criminal actions and $8,892,541 was collected in civil actions. Additionally, the Southern District of California worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $6,924,822 in civil actions pursued jointly with these offices.

“The U.S. Attorney’s Office is committed to making victims of crime whole and to protecting the federal fisc from fraud,” Duffy said. “Through robust enforcement of federal restitution statutes in criminal cases and rigorous affirmative civil enforcement of the False Claims Act and civil rights statutes, our federal prosecutors are successfully recovering property and funds for victims and the U.S. taxpayers.”

As an example of a civil recovery this past year, San Diego-based medical diagnostic laboratory, Pathway Genomics Corporation, paid $4,036,622.74 to resolve allegations that it violated the False Claims Act by paying improper kickbacks to physicians and physician groups in exchange for patient referrals.  The settlement resolved allegations that Pathway induced health care providers to refer Pathway genetic testing kits and services, and then received government reimbursement for those tests in violation of the law. The United States alleged that individual physicians received as much as $13,534 in improper reimbursements from Pathway.  It was further alleged that, as its referrals increased, Pathway billed the high costs of these laboratory analyses to federal health care programs such as Medicare and TRICARE.  Pathway has since voluntarily discontinued its physician reimbursement program.  The whistleblower in the case, a former Pathway employee, received $686,225 under the qui tam, or whistleblower, provisions of the False Claims Act.

And in July, the Southern District of California made another significant recovery – valuable coins – including 365 one-ounce American Eagle gold coins; 40 1/10 ounce American Eagle gold coins; and 712 one-ounce South African Krugerrand gold coins to apply to defendant Lloyd Irvin Taylor’s restitution.  Taylor was previously convicted of aggravated identity theft, violations of the tax code, and making false statements to financial institutions in connection with a gold purchasing scheme.  He was ordered to pay $2,241,691.08 in restitution to the victims of his criminal acts.  The recovered American Eagle and Krugerrand coins were auctioned under armed escort and the United States received over $1.4 million to apply to Mr. Taylor’s outstanding restitution.

Attorney General Loretta E. Lynch announced on Wedesday that the Justice Department collected nearly $15.4 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2016.  The $15,380,130,434 in collections in FY 2016 represents more than five times the appropriated $2.93 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.

“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.”

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.

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.

Additionally, the U.S. Attorney’s office in Southern District of California, working with partner agencies and divisions, collected $10,628,622 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.