The U.S. Department of Justice (DOJ) announced earlier this week that it has issued $24.7 billion in fines and penalties from various organizations for the fiscal year ending September 30, 2014, which was more than three times the $8 billion that DOJ collected for FY 2013. Much of the money collected was a result of enforcement actions by DOJ upon financial institutions for their handling of residential mortgage-backed securities.
The fines and penalties were collected for both civil and criminal infractions. To put the amount collected into perspective, the more than $24 billion in fines DOJ collected for FY 2014 totaled eight and a half times the combined budgets of the 94 U.S. attorneys' offices and DOJ's main litigating divisions during that same period, which was $2.91 billion.
"Every day, the Justice Department’s federal prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people," U.S. Attorney General Eric Holder said. "Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy. And it shows the fruits of the Justice Department’s tireless work in enforcing federal laws; in protecting the American people from violent crime, national security threats, discrimination, exploitation, and abuse; and in holding financial institutions accountable for their roles in causing the 2008 financial crisis."
Indeed, financial institutions paying civil penalties to resolve federal and civil claims of mortgage fraud were the largest single source of collections, according to DOJ. JPMorgan and Citigroup both paid significant amounts to resolve civil claims in regards to the packaging, marketing, sale, and issuance of RMBS, DOJ reported. Both institutions were penalized record amounts for alleged violations of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA). As part of the settlement, both institutions were ordered to provide millions of dollars in relief to struggling homeowners in addition to fines, according to DOJ.
Out of the total of $24.7 billion, $13.7 billion was paid directly to DOJ while $11 billion was paid indirectly to other agencies, states, and other designated recipients, DOJ reported. The total amount includes cases in which the settlements were paid during FY 2014 but were resolved during previous years, according to DOJ.