Criminal Debt

Oversight and Actions Needed to Address Deficiencies in Collection Processes Gao ID: GAO-01-664 July 16, 2001

The collection of outstanding criminal debt has been a long-standing problem for the federal government. Since October 1985, as reported in the U.S. Attorney's statistical reports, the balance of outstanding criminal debt has grown from $260 million to more than $13 billion. Currently, the receipting of collections and recordkeeping for criminal debt is primarily the responsibility of the U.S. Courts, while the Department of Justice is responsible for collecting criminal debt. This report reviews (1) the key reasons for the growth in reported uncollected criminal debt; (2) whether adequate processes exist to collect criminal debt; and (3) what role, if any, the Office of Management and Budget (OMB) and the Department of the Treasury play in monitoring the government's collection of criminal debt. GAO found that four key factors have contributed to the significant growth of uncollected criminal debt. These factors are (1) the nature of the debt, in that it involves criminals who may be incarcerated or deported or who have minimal earning capacity; (2) the assessment of mandatory restitution regardless of the criminal's ability to pay, as required by the Mandatory Victims Restitution Act of 1996; (3) interpretation by the Financial Litigation Units of payment schedules set by judges which limit collection activities; and (4) state laws that may limit the type of property that can be seized and the amount of wages that can be garnished. Financial Litigation Units do not always follow their policies and procedures to ensure that collection actions are prompt and adequate. The present management practices and processes do not ensure that offenders are deprived of their ill-gotten gains and that innocent victims are compensated for their losses to the fullest extent possible. Collection responsibilities continue to be divided between Justice and the courts, with neither having a central management oversight role. Neither OMB nor Treasury has identified the need to take an active oversight role in the collection of the growing balance of outstanding criminal debt.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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