Wednesday, February 17, 2016

Report: AMAC Can Improve Restitution Process

The National Credit Union Administration's Office of the Inspector General (IG) earlier this month released a report critical of the restitution process of the Asset Management and Assistance Center (AMAC). The report points out that AMAC management was not maximizing restitution recovery opportunities.

As of December 11, 2014, AMAC accounted for 117 restitution orders totaling approximately $334 million.

The IG determined that "AMAC management could improve the restitution orders process by following up and assisting the Department of Justice (DOJ) to potentially improve collections and confirm accuracy when accounting for restitution orders owed to liquidation estates."

The report noted that AMAC management does not assist the DOJ through systematic follow-up regarding the status of offenders and receipt of payments. For example, AMAC does not take advantage of an available federal resource for assistance with the collection of restitution orders or conduct periodic reconciliations with the DOJ on the number of restitutions ordered and the amount of restitution owed to liquidation estates.

AMAC management offered numerous explanations as to why they do not regularly assist the DOJ in restitution collection efforts, including lack of resources at AMAC, uncertain earnings of most criminals after release from prison, and little or no return on investment.

However, the IG disagreed with AMAC management's excuses. The IG found that AMAC does very little to proactively pursue monies owed to the NCUA, but rather relies on the DOJ to forward additional restitution payments.

The report benchmarked AMAC's restitution process to the practices of the Federal Deposit Insurance Corporation (FDIC). The report states that FDIC has a robust restitution program and found that FDIC with the assistance of the Financial Litigation Unit at DOJ actually collect more restitution after the completion of an offender’s prison term. According to the report, FDIC monitors an offender throughout the life of the restitution and regularly conducts asset searches, searches for property, and any fraudulent conveyances, particularly after the offender is released, not just before sentencing during the prosecution phase.

In addition, the report recommends that AMAC explore working with the Treasury Offset Program, which has resulted in an additional $35.6 million in collections for FDIC between 2009 and 2013.

Read the report.

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