DOJ Amends and Clarifies the Temporary Suspension of Affirmative Civil Collection and Enforcement Activities During the COVID-19 Pandemic Regarding Affirmative Civil Enforcement Matters | Nelson Mullins Riley & Scarborough LLP
Dated by memorandum April 13, 2020, Corey F. Ellis, acting director of the US Department of Justice’s Executive Office (“DOJ”), has issued a memorandum to all United States Attorneys (USAOs) clarifying an earlier memorandum March 31, 2020 (entitled “Temporary Suspension of Affirmative Civil Collection and Enforcement Activities During the COVID-19 Pandemic”), which specifically addresses affirmative civil enforcement (ACE) issues. See attached March 31 and April 13th memos for more details. ACE matters as defined in the April 13 memo include: “False Claims Act, FIRREA, and other actions for damages, civil penalties, and / or fair remedies. “ACE Litigation” does not include lawsuits for claims for a specific amount referred by agencies, such as: See April 13th note on page 2, FN 1. Note that the provisions do not apply in criminal matters. the March 31 Memo should also not be construed as a weakening of other enforcement measures.
the March 31 memo announced a temporary suspension of affirmative debt collection and enforcement, which has been extended to include the deposit of liens. However, in the April 13th note To clarify, the DOJ states: “The placement of foreclosure liens on the debtor’s property directly protects the interests of the government and does not require any response from the debtor. Therefore, the temporary suspension – as it only relates to the deposit of liens – is lifted with immediate effect. ” See April 13th note on pages 1-2.
The April 13 memo also clarifies a number of questions that arose from the March 31 memo, including:
- There is no suspension of the U.S. Attorney’s (USAO) ability to act on ongoing ACE matters – pending litigation, appeals, or non-subject cases to final, non-appealable judgment.
- There is no limit to the collection of settlement payments by the USAO under a voluntary settlement agreement. This includes collecting settlement payments that would become due over time, including paying amounts that are due during the suspension period. These payments are not considered debts from “active payment plans with FLUs” within the meaning of the March 31st memo. April 13th note at 2 o’clock.
- There is no limit to redress, including default judgments, provided to the United States under the terms of a settlement agreement if the settlement agreement is in any way violated.
- In the event of a default judgment, the USAO cannot enforce the judgment until May 31, 2020 April 13th note provides that this will not affect accrued interest or any other amount that may become due due to payment delays and will not prevent USAO from obtaining a lien, determining the availability of assets for forfeiture, or taking any other action necessary in the interests of the Protect government. The USAO should take whatever action it deems necessary to prevent a defendant from attempting to squander or fraudulently transfer assets.
the April 13th note Reminds enforcement officers that while suspension language does not apply to ACE matters prior to the judgment, the intent of the memorandum is to “provide financial respite during the crisis” and that such relief may be appropriate in appropriate cases to consider. UASOs are “encouraged to act at their own discretion in negotiating suitable solutions in their ACE cases”. April 13th note on page 3. UASOs are reminded that they should make every effort to protect the interests of the government and that if it appears that an ACE defendant may file for bankruptcy, the USAOs should act to do so Protect the interests of the government as best we can, including consulting a bankruptcy advisor.
These memos should be carefully considered in seeking protection from the matters raised.