The $1.2 billion windfall: What now?
Item: Last month Toyota Motor Corp. agreed to pay a $1.2 billion criminal penalty to the U.S. Department of Justice for misleading consumers and regulators about unintended acceleration problems in some vehicles.
It was the biggest penalty ever against an auto maker — and of intense interest to General Motors, now under investigation for its handling of faulty ignition switches.
Q: Who gets the $1.2 billion? Consumers? Victims? The government?
A: The government, and probably some of the victims. It's expected the money will go to the Justice Department's Assets Forfeiture Fund.
Q: What's that used for?
A: Money in the fund can cover expenses associated with forfeiture operations such as property seizure, detention and disposal. The Justice Department uses forfeiture to deprive drug traffickers, racketeers and other criminals of ill-gotten gains and thereby disrupt criminal activity. Money in the fund can also be used to cover general investigative expenses.
Q: Who controls the fund?
A: Attorney General Eric Holder is authorized to use the fund to pay necessary expenses associated with forfeiture operations or to finance investigative expenses.
Q: How soon does Toyota have to pay up? Will the penalty be paid in increments or as a lump sum?
A: Toyota has already paid it as a lump sum, according to Justice Department spokeswoman Jerika Richardson.
As of last week, the money was in the Marshals Seized Asset Deposit Fund pending forfeiture. The payment is the subject of a civil forfeiture action, and Any money forfeited in that action will be deposited in the Assets Forfeiture Fund.
Q: Can victims of unintended acceleration get any of the money?
A: Those who suffered losses as a result of the offenses at issue — namely, problems with floor mats and sticky accelerator pedals — can file petitions for remission with the Department of Justice.
Q: How big of a boost is this to the Asset Forfeiture Fund?
A: Substantial. Financial statements for the Asset Forfeiture Fund and the Seized Asset Deposit Fund show they received a total of $2 billion in revenue for the fiscal year that ended Sept. 30, 2013.
Of that, about $1.1 billion was forfeiture income from 10 major fraud cases. That included $551 million from two big bank-fraud cases and $300 million from two Internet gambling cases.
For the previous fiscal year — ending Sept. 30, 2012 — the funds had an unusually large amount of forfeiture income, nearly $4.2 billion. The big reason for the bonanza? More than $2.2 billion in forfeitures associated with the Bernard Madoff case.
During the fiscal year that ended Sept. 30, 2013, about $450 million was disbursed to fraud victims.
Of the $1.82 billion that could be spent during the most recent fiscal year, $1.28 billion went to for-profit contractors and a little more than $500,000 went to government agencies.