CEDAR RAPIDS — The U.S. Attorney’s Office of the Northern District of Iowa collected more than $5.4 million in criminal and civil actions in 2017, officials reported this week.
Assistant U.S. Attorney Tony Morfitt said the majority of the funds, $3,581,735, were collected in civil enforcement cases stemming from Medicaid and false claims fraud.
The funds from the civil actions also include fines imposed on individuals and corporations for violations of federal health, safety, civil rights or environmental laws.
In addition, the 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.
The funds collected from criminal actions — which include restitution and fines ordered — was $1,906,625, Morfitt said.
The law requires defendants to pay restitution to victims of certain federal crimes, which result in a physical injury or financial loss, according to the office.
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.
“We take seriously our duty to collect money owed to taxpayers and crime victims,” U.S. Attorney Peter Deegan Jr. said in a statement. “Our total collections over the past fiscal year, once again, exceeded the total amount of our direct budget. Our entire office is committed to holding wrongdoers financially responsible for their actions and sending the message that crime doesn’t pay.”
Morfitt said the amount of collections varies from year to year, depending on how many cases are filed. In fiscal year 2016, the office collected $6.7 million.
The most collected in this district may have been $16 million in 2015. Assistant U.S. Attorney Matt Cole told The Gazette at that time that it could have been the largest amount collected, which was twice the office’s direct budget.
Cole said the collections that year was the result of some major criminal and civil cases that required defendants to pay thousands or millions in victim restitution and fines.
The top 2015 criminal collection came from the case against Austin “Jack” DeCoster, his son Peter DeCoster, and their company, Quality Egg LLC. In addition to both DeCosters being sentenced to prison time and being fined $100,000, their company was ordered to pay a fine of $6.79 million.
The top civil collection that year was from a settlement with ResCare Iowa Inc. The company agreed to pay $5.63 million to the federal government and the State of Iowa to resolve allegations that it violated the False Claims Act by submitting false home health care billings to the Medicare and Medicaid programs.
In 2017, one of the top civil cases in the district involved a Clive medical equipment store owner, James O’Connor, 64, of West Des Moines, who was also convicted and sentenced to over three years in federal prison. He submitted false documents to the U.S. Attorney’s Office during an investigation.
A plea agreement shows O’Connor, who operated O’Connor Medical Supply Inc., in Clive, admitted that he provided a false document to federal prosecutors in conjunction with a civil False Claims Act investigation.
O’Connor admitted to “upcoding” — the act of providing a false document intended to conceal that he previously submitted a claim to Medicare for a more complex and expensive orthotic device than what he actually provided.
A judge ordered O’Connor to pay $349,953 in restitution to Medicare and Medicaid programs. He also agreed to a civil settlement to resolve a False Claims Act investigation, in which he paid $898,523 to resolve these allegations.
Another large collection involved CARE Youth Corporation and Sequel Youth Services, which has a residential facility in Mount Pleasant, according to settlement documents provided by the U.S. Attorney’s Office.
The companies agreed to pay a settlement of over $2.5 million for submitting false Medicaid claims.
The Northern District also worked with other U.S. Attorney’s offices and components of the U.S. Department of Justice to collect an additional $3.9 million in civil cases pursued jointly with these offices, officials said this week.
The office, working with partner agencies and divisions, also collected more than $1.6 million in asset forfeiture actions last year.
Forfeited assets deposited into the U.S. Department of Justice Assets Forfeiture Fund are earmarked for crime victims and for a variety of law enforcement purposes.
Overall, the U.S. Department of Justice collected just over $15 billion in civil and criminal actions in fiscal year 2017, which ran Oct. 1, 2016, through Sept. 30, 2017.
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