Last Thursday, Attorney General Eric Holder announced that the Justice Department collected more than $8 billion in civil and criminal cases in fiscal year 2013. Approximately $5.9 billion was collected through civil litigation efforts, while $2.2 billion represents funds that were collected pursuant to criminal matters. As the press release acknowledges, the total amount collected is somewhere in the ballpark of three times what it costs to keep the Department of Justice operating, which includes 94 U.S. Attorney offices and its main litigation divisions.

The highest collections were obtained from health care fraud involving pharmaceutical companies, Deepwater Horizon settlements, price fixing and bid rigging for tangible goods, and tax conspiracy involving a private Swiss bank. While these defendants certainly faced the most substantial settlement amounts, the numbers also take into account every single case involving restitution, forfeiture, fines and other monetary penalties.

True, most of the money is coming from the civil side of the DOJ, but $2.2 billion obtained through criminal cases is nothing to shy away from. Indeed, most individuals facing federal criminal charges are also looking at the forfeiture of assets, large amounts of restitution, and significant fines and penalties. It is not exactly clear how much of these funds represent funds obtained in cases against corporate defendants as compared to individual defendants. Nonetheless, unlike corporate defendants that may have large bank accounts to fall back on, individual criminal defendants typically have everything to lose, including freedom, family, and their life savings.

In federal criminal cases where victims are involved, such as health care or securities fraud, restitution is typically a large factor in the Government’s case. Specifically, most fraud cases turn on the Government’s theory that the defendant committed fraud for financial gain. In fact, the sentencing range depends mostly on the loss amount and number of victims. Thus, it is no surprise that most of the funds collected last year are derived from cases involving fraudulent conduct.

From a criminal perspective, the financial consequences are certainly harsh. A defendant faces loss of liberty while incarcerated, severe difficulties in adjusting to life once the sentence has been served, and must face, in some cases, staggering financial penalties. Moreover, a challenge under the Excessive Fines Clause of the 8th Amendment for monetary penalties is extremely difficult. 

The significant amount collected last year demonstrates that the Department of Justice may have a higher interest in pursuing financial penalties than it would like to admit. Although the civil side of the coin is more lucrative due to the types of defendants involved and the settlement nature of such cases, the criminal side is clearly also a target for U.S. Attorneys.

The author of this blog is Margaret S. Ververis, an attorney specializing in Federal Criminal Defense matters with the law firm of Ferrari & Associates, PC. If you have any questions please contact her at 202-440-2581 or ververis@ferrariassociatespc.com.

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