Mr. SCHUMER. I ask unanimous consent that on the money laundering issue you could submit an answer in writing. Ms. HARRIS. Yes. Mr. SCHUMER. Or I'll come back to second Mr. MCCOLLUM. No, it's-unanimous consent is certainly granted on that. And I would say what I was going to say, too, is that whenever you've got an answer that's extensive like this when an innovative questioner with great experience like Mr. Schumer asks multipart questions, if you can condense the answer and submit it for the record, it would be helpful. Ms. HARRIS. OK. [The information follows:] MONEY LAUNDERING The money laundering statutes are a powerful and effective tool for combatting crime, especially organized crime and narcotics trafficking. The statutes provide prosecutors with an array of potent weapons to punish criminals and the Department has made effective use of them. In order to ensure that we maintain our ability to combat money laundering in the environment of changing technology, we are reviewing these statutes to determine if any amendments may be necessary. In addition, the effectiveness of the statutes may be compromised by the Sentencing Commission's amendment to the Sentencing Guidelines which would substantially lower penalties for many money laundering offenses. This amendment will undermine the current effectiveness of the money laundering statutes. We have submitted legislation asking Congress to block the Commission's action. Mr. MCCOLLUM. Mr. Schiff. Mr. SCHIFF. Thank you, Mr. Chairman. Ms. Harris, there are three areas I'd like to ask you about briefly. Before I do so, I just want to say that I believe you're a career Federal prosecutor yourself Ms. HARRIS. That's correct. Mr. SCHIFF [continuing]. And I wanted to say that I feel very fortunate that we have someone with your experience in the position that you're in. And, also, as a former county prosecutor, I feel very fortunate we have an Attorney General who's a former county prosecutor. Back when Attorney General Reno came onboard, we found out that we used to tell the same jokes and stories about U.S. attorneys' offices. I guess she's not going to tell those stories any more. [Laughter.] Mr. SCHIFF. But the three areas I would like to ask you about— one is just a brief organizational question. Most criminal prosecution at the Federal level, of course, comes out of the U.S. attorneys' offices, not out of the Criminal Division. And I'm just not clear what authority you have in your position as head of the Criminal Division over the U.S. attorneys. In other words, if in your judgment a particular U.S. attorney is not following the correct priorities in criminal prosecution, do you have the authority to directly instruct in that area or do you have to go through the Attorney General and back down again to get to affect the U.S. attorneys? Ms. HARRIS. There are areas where I do have direct authority, but it tends to be in the areas of approvals for title III's, for electronic surveillance, and those very special Federal tools where there really is a need, and I think uniformly an agreement, that there ought to be centralized decisionmaking in some central point, and that point is designated to be the Criminal Division. But, beyond that, it is—and we have-we are fortunate to have two ex-U.S. attorneys on the subcommittee now, and I must say that I regard it as a partnership. I don't feel that I have the direct authority in many areas to tell a U.S. attorney what a U.S. attorney should be doing. We are working together more closely now than I than we have in my experience ever. The Criminal Division and the U.S. attorneys just share so much in common, and the cultures are closer than I have ever seen them. We are truly working together. So if I have anything, it is moral persuasion, and by that I mean common sense. We sit down and we talk and we work it out. Mr. SCHIFF. The second area I'd like to ask you about is health care fraud. Ms. HARRIS. Yes. Mr. SCHIFF. It's my understanding-and, by the way, for a period of a couple of years New Mexico State Medicaid Fraud Unit operated out of my office. It was attached to my office for administrative support. So I became very familiar with the area. I am a firm believer in the higher estimate of statistics in how. much we lose through health care fraud. I strongly suspect that we could have financed the entire administration's health care proposal from last year if we weren't paying out money through fraud. Much of that fraud comes though fraudulent providers. I am concerned, however, that prosecution in this area aims strongly enough at individuals to have a deterrent effect. We had some testimony several months ago in which the Department of Justice was saying that they had their biggest conviction yet on health care fraud. And I asked them, well, what's the result? And they said, well, there's been an agreement to pay back to the Government something on the order of $11 million. And I asked the second question, well, who went to jail, and there was this long pause on that subject. And I'm getting the impression-and this is a tendency in white-collar cases, to emphasize restitution over criminal prosecution. We are talking about crimes here, and if we emphasize-I'm not opposed to restitution, of course, but if we emphasize restitution as the first goal, I think criminal prosecution becomes a cost of doing business. Well, we're going to steal Monday, Tuesday, and Wednesday, and if we're caught for Tuesday's theft, we'll just put that back, but we'll keep Monday and Wednesday's stolen goods. And let me finish this with just one more. This may be more in the human services area, but it's my understanding that health care providers, when convicted of fraud, are not necessarily terminated from doing business with the Federal Government. They just kind of say, well, we'll start over again or something like that, which I think is horrendous myself. But I wonder if you could briefly just give me a response. Are we actually threatening white-collar criminals with: you're a criminal and we convict you; you're going to go to prison, or at least we have that possibility? Ms. HARRIS. The short answer is yes. Let me tell you, as a Federal prosecutor back in the seventies, I was doing health care fraud prosecutions, and I feel very strongly that it is important that we look white-collar criminals in the eye and say: you're going to jail. Because if there is a place where deterrence works, I believe it works if we go after individuals. I have, as I came down to the Fraud Section as Chief of the Fraud Section, felt exactly the same way and, in fact, resisted sort of corporate deals where money was paid and corporations pleaded guilty, but people didn't. Mr. SCHIFF. Precisely. Ms. HARRIS. And so I come from the same place you're coming from. I must say that, as I look at our resources and the problem out there and what we can do with the Civil Division of the Department of Justice in terms of parallel hit them in the pocket and hit the people responsible with jail sentences, then I think that's the appropriate mix of prosecution strategy. I cannot pronounce this name, but a note has just been handed to me. You get to pronounce the name of the defendant. Mr. LITT. Smushkevich. Ms. HARRIS. Smushkevich, a case in Los Angeles recently, major health care fraud, jail sentences in excess of 10 years. Mr. SCHIFF. Mr. Chairman, my time has expired, but I ask you for recognition for one more minute to make two requests. Mr. MCCOLLUM. You may have that Mr. SCHIFF. I thank you. Mr. MCCOLLUM [continuing]. Without objection. Mr. SCHIFF. I would be grateful for two items of information. One we've just talked about. I would like a list, over, say, the last 12 months or so, I'd like a list of whatever information your Department has, how many defendants have gone to prison for welfare fraud or excuse me, for health care fraud. Pardon me, wrong. I'd just like to know, if your Department has that information, I'd sure like to know what we have. And you're welcome to send it to me, Mr. MCCOLLUM. If you can submit it for the record, all of us should have it. Ms. HARRIS. We'll do our best. As you know, the way the Mr. SCHIFF. Right. If you don't keep it in that form, I would understand, but you understand what I'm getting at here? Ms. HARRIS. Yes. Mr. SCHIFF. I'd just like to know Ms. HARRIS. Yes. Mr. SCHIFF [continuing]. How many of those 10-year sentences you're getting. [The information follows:] HEALTH CARE FRAUD Attached is a list of 75 defendants convicted of health care fraud and receiving jail time for fiscal year 1994. The Department is committed to the prosecution and incarceration of those who perpetrate health care fraud. In late 1993, the Attorney General named health care fraud as one of the Department's top priorities. The Department has dedicated substantial investigative and prosecutive resources to health care fraud investigations, and since fiscal year 1992, the number of health care fraud investigations has increased 211 percent and the number of defendants charged has increased 108 percent. During fiscal year 1994, a total of 241 defendants were charged in health care fraud cases and 1,066 criminal matters were opened. HEALTH CARE FRAUD FY 94 DISTRICT N.D. ALABAMA C.D. CALIF E.D. CALIF N.D.GEORGIA N.D. INDIANA |