Criminal Debt: Court-Ordered Restitution Amounts Far Exceed Likely Collections for the Crime Victims in Selected Financial Fraud Cases
Highlights
In the wake of a recent wave of corporate scandals, Senator Byron L. Dorgan noted that the American taxpayers have a right to expect that those who have committed corporate fraud and other criminal wrongdoing will be punished, and that the federal government will make every effort to recover assets held by the offenders. Recognizing that GAO previously reported on deficiencies in the Department of Justice's (Justice) criminal debt collection processes (GAO-01-664), Senator Dorgan asked GAO to review selected criminal white-collar financial fraud cases for which large restitution debts have been established but little has been collected. Specifically, GAO was asked to determine (1) the status of Justice's efforts to collect on the outstanding debt, (2) the prospects for future collections, and (3) whether specific problems have affected Justice's ability to collect the debt.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Justice | To help ensure that the strategic plan called for in the conference report effectively addresses all potential opportunities for collection, Attorney General should include in the strategic plan legislative initiatives, operational initiatives, or both that are directed toward maximizing opportunities to make offenders' assets available to pay victims once restitution debts are established by judges. |
Closed – Implemented
In accordance with the directive of the conference report on the Consolidated Appropriations Act of 2005, the Attorney General established the Task Force on Improving the Collection of Criminal Debt. The Task Force, which includes various members from the Department of Justice, the U.S. Courts, the Department of Treasury, and the Office of Management and Budget, has developed a strategic plan that includes numerous intermediate and long-term goals aimed at enhancing the effectiveness of the criminal debt collection system and increasing the collection of restitution due to crime victims. The strategic plan calls for the development of new legislative and procedural tools, as well as systems modifications, to maximize opportunities to make offenders' assets available to pay victims once restitution debts are established by judges.
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| Department of Justice | To monitor progress in leading the development and implementation of the strategic plan, Attorney General should report annually in Justice's Accountability Report on progress toward developing and implementing a strategic plan to improve criminal debt collection. This report should include a discussion of any difficulties or impediments that significantly hinder such progress. |
Closed – Implemented
Consistent with the intent of our recommendation, since 2005, Justice has periodically briefed the Congress on its efforts and improvements in the area. for example, during its November 1, 2007, briefing before the House Subcommittee on Crime, Terrorism, and Homeland Security, Justice officials provided the committee information concerning its criminal debt collection efforts, including actions taken to address other GAO recommendations to improve criminal debt collection, as well as proposed legislative initiatives to improve collection procedures as outlined in the strategic plan. By providing such periodic briefings to the Congress concerning its debt collection efforts and proposing new legislation to improve collection procedures, Justice has taken action that adequately addresses the intent of our recommendation.
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