New York: Indian-origin US prosecutor Preet Bharara’s office has recovered nearly USD four billion from criminal and civil cases since January 2013, including significant forfeitures from JPMorgan Chase, SAC Capital Advisors and jailed hedge fund founder Raj Rajaratnam.
The US Attorney’s office for the Southern District of New York obtained recoveries of more than USD 2.7 billion in forfeiture actions, entered into agreements to recover USD 1.06 billion in restitution, criminal fines, and special assessments, and has recovered USD 149.8 million from civil actions since January last year.
Bharara said the penalties and fines stand for the “principle that those who break the law or commit civil offenses, whether institutions or individuals, must not be allowed to profit from their misconduct. It is fair to say the taxpayers have gotten a great return on their investment – almost 8,000 per cent,” since the USD four billion represents nearly 80 times the office’s annual budget.
He said the forfeiture “is not only a matter of deterring bad conduct” but a significant portion of the money recovered would go toward compensating victims of crime or other misconduct who suffered real financial loss.
Forfeited funds are generally deposited into the Department of Justice Assets Forfeiture Fund and the Department of Treasury Forfeiture Fund.
The USD 149.8 million collected in civil actions came from a combination of cases in which the office collected government money lost due to fraud or other misconduct, collected fines imposed on individuals and corporations for violations of federal health, safety, civil rights, or environmental laws.
In the JPMorgan Chase case, the office recovered USD 1.7 billion as part of a deferred prosecution agreement with the bank which agreed to pay the non-tax deductible penalty for its violations of the Bank Secrecy Act committed in connection with the Bernard Madoff multi-billion dollar Ponzi scheme.
These funds would be used to compensate victims of the Madoff Ponzi Scheme.
Another significant amount of penalty was levied on SAC Capital Advisors, that will pay USD 1.8 billion to settle charges of engaging in money laundering by commingling the illegal profits from insider trading with other assets, using the profits to promote additional insider trading, and transferring the profits with the assistance of financial institutions.
In addition to the SAC forfeiture, in 2013 the office forfeited and collected in excess of USD 63 million from insider trading criminal prosecution and civil forfeitures actions, including the forfeiture of USD 53.8 million from Rajaratnam.