The U.S. Justice Department collected a record $24.7 billion in fines and penalties in fiscal year 2014. The total was triple the amount collected in 2013 and nearly double the $13 billion collected in 2012, the federal agency announced.
Officials attributed the record collection to hefty settlements paid by Wall Street banks as part of civil actions related to the institutions’ conduct in the years leading up to the 2008 financial meltdown. According to The Wall Street Journal, much of the money came from fines imposed on JPMorgan Chase & Co. and Citigroup Inc. to resolve claims that the banks misled investors about the quality of mortgage-backed securities.
The cases against both banks produced record penalties under the Financial Institutions Reform, Recovery and Enforcement Act, and also provided billions of dollars to struggling homeowners, according to the Justice Department.
The amount collected in FY 2014 was just $3 billion less than the Justice Department’s total budget for that fiscal year.
Attorney General Eric Holder said about $13 billion of the total collection was paid directly to the Justice Department, with $11 billion collected through various federal agencies, states and other recipients. Some of the fines collected in fiscal 2014 were the result of cases settled in previous years.
Civil and criminal penalties related to healthcare fraud, including significant fines against drug companies “accused of fraud, false claims, and drug safety violations,” also accounted for a large portion of the total collected funds, Holder said in a November 2014 statement.
The Wall Street Journal reported that billions of dollars were collected in cases brought under the False Claims Act, which allows the government to recover money lost in the defrauding of government programs. The suspected manipulation of the London Interbank Offering Rate (LIBOR), the rate at which banks borrow from each other, also resulted in hundreds of millions of dollars in collected fines.
Alleged price-fixing and bid-rigging in the international auto parts industry produced additional fines totaling hundreds of millions of dollars, the Justice Department reported. Bridgestone Corp., based in Toyko, Japan, pleaded guilty and agreed to pay a fine for its role in a conspiracy to fix the prices of anti-vibration parts installed in automobiles sold in the United States.
The Justice Department collected several multimillion dollar fines as part of environmental cases. Those included a nearly $14 million civil penalty paid by Titanium Metals Corp. under the Toxic Substances Control Act, and the Resource Conservation and Recovery Act. The company was accused of the unauthorized manufacture and disposal of cancer-causing chemicals at its facility in Henderson, Nevada.