The FBI’s Preliminary Uniform Crime Report released Monday showed a decrease in crime nationwide, with violent crimes in the first half of 2011 down 6.4 percent when compared to the first half of 2010, according to the report.
The report, which contains data from January to June 2011, also showed a decline in property crimes by 3.7 percent.
The violent crime category showed a drop in incidents across the board. According to the report, murder was down 5.7 percent, rape fell by 5.1 percent, robbery was down 7.7 percent and aggravated assault was down by 5.9 percent.
Attorney General Eric Holder released a statement Monday, saying “safe neighborhoods are the underpinning of our nation’s prosperity, and this Department of Justice has made protecting the American people from violent crime a top priority.”
“Ensuring that law enforcement has the necessary resources is critical to continuing our aggressive fight against violent crime. Although we can all be encouraged that violent crime rates continue to decline nationwide, it is clear that we must remain vigilant and more work remains to be done,” he said in the statement.
A crackdown on healthcare fraud was a major factor in the Justice Department’s more than $3 billion in False Claims Act recoveries in 2011, keeping the Civil Division’s total on par with last year’s settlements and judgments.
Assistant Attorney General for the Civil Division Tony West announced Monday that of the $3 billion recovered by the Civil Division under the False Claims Act in FY 2011, a record-number $2.8 billion came from whistleblowers. The federal government recovered about $2.3 billion in settlements through the same whistleblower provisions in 2010.
“[This number] represents a great deal of courage on the part of whistleblowers who have come forward and helped the government in the investigation of these cases,” West said.
West
This announcement comes one week after Deputy Attorney General James M. Cole said the Justice Department recovered $5.6 billion in civil and criminal cases in 2011, the most ever recorded in a single year.
Healthcare fraud recoveries made up the majority of the total at $2.4 billion in 2011, but the number dipped slightly from the $2.5 billion recovered in 2010.
West said that President Obama and Attorney General Eric Holder decided early on to make healthcare fraud an enforcement priority, creating the Health Care Fraud Prevention and Enforcement Action Team (HEAT) in conjunction with Department of Health and Human Services Secretary Kathleen Sebelius.
“Healthcare fraud became a cabinet level priority,” West said Monday. “That attention and sustained attention has given us some extroardinary results… When that tide rises, the entire tide rises.”
Actions against the pharmaceutical industry provided the largest source of recoveries in 2011, accouting for $2.2 billion in civil claims, West said. The largest single recovery this year came in a case against eight drug manufacturers who allegedly inflated the prices of its drugs, West said. The companies paid about $900 million in penalties to the government.
West also highlighted the expansion of the Medicare Fraud Strike Forces, which are headed up by the Criminal Division and are located in 9 cities across the country. The forces have helped refocus attention on prevention, rather than a “pay and chase” model of enforcement, which centers on prosecuting those who have committed fraud after they have received the money.
Since January 2009, the department has recovered $8.7 billion under the False Claims Act, West said, which is the largest three-year total in the department’s history. About $2.4 billion was recovered in 2009 and $3 billion was recovered in 2010.
Looking ahead to the next year, West said the Civil Division will also focus attention on its year-and-a-half old elder abuse initiative. In the past year, the department has pooled resources to make nursing home abuse a priority, he said.
Sheriff Joe Arpaio blasted the Department of Justice Friday on Fox News, saying the Civil Rights Division’s report detailing alleged abuses by Maricopa County Sheriff’s Office is just an attempt by the Obama administration to win the Hispanic vote in 2012.
According to a report in Talking Points Memo, Arpaio said he’s “going to show the politics involved.” See the video from TPM below.
President Obama has said he will not veto a bill that allows for the indefinite detention of terrorism suspects, despite initial objections from the Department of Justice.
The bill gives prosecution authority to the military, according to a New York Times report. Attorney General Eric Holder was mum on the topic as Congress passed the National Defense Authorization Act of 2012 this week, according to a report by the Wall Street Journal.
Attorney General Eric Holder at a United Nations counter-terrorism symposium.
In a statement, the President said his initial concerns over the bill were assuaged by several amendments to the language, according the to the New York Times report. FBI Director Robert Mueller spoke out against the bill Wednesday, saying it would leave uncertainty in jurisdiction when a suspected terrorist is arrested, according to the report.
Holder, who advocates for the civilian court system, kept quiet as the bill passed, the Wall Street Journal reported. Recent flaps over the Fast and Furious controversy and the fight with Republicans over the prosecution of alleged Sept. 11 plotter Khalid Sheikh Mohammed and four others earlier this year may have kept the attorney general on the sidelines, among other things, the Wall Street Journal reported.
The bill includes a provision allowing the government to hold, without trial, suspected members of Al Qaeda or its allies, the New York Times reported. Another portion of the bill requires the attorney general to consult with military agencies before moving forward with charging terrorist suspects in civilian court, the Times reported.
After a 9-month investigation, the Justice Department has found that when Seattle Police Department officers use force in arrests it is excessive almost 20 percent of the time, according to a Civil Rights Division report released Friday.
The department’s lengthy report stated that from January 2009 to April 2011 there were about 1,230 reports of excessive force to the leadership of the 1,300-member police force, but only five of those cases were referred for further review. The report also noted that when making forcible arrests, officers unnecessarily used batons 57 percent of the time. Thomas E. Perez, Assistant Attorney General for the division, said in a news release that a breakdown in supervision and training led to these alleged abuses.
“Our investigation has revealed that inadequate systems of supervision and oversight have permitted systemic use of force violations to persist at the Seattle Police Department,” Perez said in the release. “Our findings should serve as a foundation to reform the police department and to help restore the community’s confidence in fair, just and effective law enforcement.”
This comes one day after the Civil Rights Division issued a scathing report on the alleged racial profiling abuses by the Maricopa County Sheriff’s Office in Arizona. Perez also said Thursday that the division is investigating the largest number of law enforcement departments ever in its history. Currently 20 forces are under review, Perez said, including those in New Orleans, Portland andMiami.
Friday’s report on Seattle also noted that officers often escalated situations when making arrests for minor charges, and this is magnified when the individual has mental illness or is under the influence of drugs or alcohol. The report states that excessive force is used in an estimated 70 percent of these cases.
“The solution to the problems identified within the Seattle Police Department will require strong and consistent leadership along the chain of command, effective training and policies, and vigilant oversight,” Jenny A. Durkan, U.S. Attorney for the Western District of Washington, said in the release.
The Securities and Exchange Commission charged six former top executives from Fannie Mae and Freddie Mac today have been charged today with securities fraud.
The six former executives knowingly underreported the companies’ loan holdings and fooled investors by giving them “false comfort,” according to an SEC news release.
The three former Fannie Mae Executives charged in the SEC complaint include:
- Daniel H. Mudd, former chief executive officer
- Enrico Dallavecchia, former chief risk officer
- Thomas A. Lund, former executive vice president for the company’s single family mortgage business
The three former Freddie Mac executives charged in a separate SEC complaint include:
- Richard F. Syron, former CEO and chairman of the board
- Patricia L. Cook, former executive vice president and chief business officer
- Donald J. Bisenius, former executive vice president for the single family guarantee business
“Fannie Mae and Freddie Mac executives told the world that their subprime exposure was substantially smaller than it really was,” Robert Khuzami, Director of the SEC’s Enforcement Division, said in the release. “These material misstatements occurred during a time of acute investor interest in financial institutions’ exposure to subprime loans, and misled the market about the amount of risk on the company’s books.”
The suit against former Fannie Mae executives Dallavecchia, Lund and Mudd alleges that when the company began disclosing its exposure to subprime loans in 2007, it reported less than one-tenth of the loans that met the description it provided. The suit also alleges that the executives knew and approved of the decision to underreport its Alt-A loan holdings, disclosing in 2007 that it was 11 percent of its single family loans portfolio when it was actually almost 18 percent.
The suit against former Freddie Mac executives alleges that they falsely led investors to believe the firm used a wide definition of subprime loans. According to the complaint, Syron and Cook publicly said the business had “basically no subprime exposure,” but in reality it was exposed to about $141 billion of loans internally. This accounted for about 10 percent of the loan portfolio in 2006, and grew to almost $244 billion, making it 14 percent of the portfolio, in 2008, according to the suit.
Both Fannie Mae and Freddie Mac have signed non-prosecution agreements with the commission as litigation moves forward, according to the release.
In November a federal judge rejected the $285 settlement agreement between Citigroup Inc. and the U.S. Securities Exchange Commission, criticizing the SEC for what he views as allowing the company to settle without admitting any culpability. Below is SEC Director of Encorcement Robert Khuzami’s statement in response to the judge’s action.
SEC STATEMENT ON CITIGROUP CASE
Washington, D.C., Dec. 15, 2011 – The Securities and Exchange Commission’s Director of the Division of Enforcement, Robert Khuzami, today made the following statement on the Citigroup case:
Last month, a federal district court declined to approve a consent judgment because, in its view, the underlying allegations were ‘unsupported by any proven or acknowledged facts.’ As a result, the court rejected a $285 million settlement between the SEC and Citigroup that reasonably reflected the relief the SEC would likely have obtained if it prevailed at trial.
We believe the district court committed legal error by announcing a new and unprecedented standard that inadvertently harms investors by depriving them of substantial, certain and immediate benefits. For this reason, today we filed papers seeking review of the decision in the U.S. Court of Appeals for the Second Circuit.
We believe the court was incorrect in requiring an admission of facts – or a trial – as a condition of approving a proposed consent judgment, particularly where the agency provided the court with information laying out the reasoned basis for its conclusions. Indeed, in the case against Citigroup, the SEC filed suit after a thorough investigation, the findings of which were described in extensive detail in a 21-page complaint.
The court’s new standard is at odds with decades of court decisions that have upheld similar settlements by federal and state agencies across the country. In fact, courts have routinely approved settlements in which a defendant does not admit or even expressly denies liability, exactly because of the benefits that settlements provide.
In cases such as this, a settlement puts money back in the pockets of harmed investors without years of courtroom delay and without the twin risks of losing at trial or winning but recovering less than the settlement amount – risks that always exist no matter how strong the evidence is in a particular case. Based on a careful balancing of these risks and benefits, settling on favorable terms even without an admission serves investors, including investors victimized by other frauds. That is due to the fact that other frauds might never be investigated or be investigated more slowly because limited agency resources are tied up in litigating a case that could have been resolved.
In contrast, the new standard adopted by the court could in practical terms press the SEC to trial in many more instances, likely resulting in fewer cases overall and less money being returned to investors.
To be clear, we are fully prepared to refuse to settle and proceed to trial when proposed settlements fail to achieve the right outcome for investors. For example, in the cases that the SEC identifies as core financial crisis cases, we filed unsettled actions against 40 of the 55 (70 percent) of the individuals charged – including the action filed against Brian Stoker in this matter. Similarly, we filed unsettled actions against 11 of the 26 (42 percent) of the entities we charged – eight of which we did not litigate against because they were bankrupt, defunct or no longer operating.
In deciding whether to settle, the SEC considers, among other things, limitations under the securities laws. In a case like Citigroup, the applicable statute does not entitle the SEC to recover the amount lost by investors. Instead, in addition to recovering a defendant’s ill-gotten gains, the statute allows a monetary penalty only up to the amount of a defendant’s gain.
The $285 million obtained from Citigroup under the proposed settlement, while less than investor losses, represents most of the total monetary recovery that the SEC itself could have sought at trial. An SEC settlement does not limit the ability of injured investors to pursue claims for additional relief.
Moreover, while the court alluded to Citigroup’s size, the law does not permit the Commission to seek penalties based upon a defendant’s wealth.
The full statement can be read here.
