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March 7, 2012

ATTORNEY GENERAL MADIGAN COLLECTS MORE THAN $900 MILLION IN STATE REVENUE IN 2011

Attorney Generalís office generated nearly $30 for every tax dollar spent

Chicago — Attorney General Lisa Madigan today announced that her office collected more than $900 million on behalf of the State of Illinois in 2011, bringing total collections since 2003 to more than $7.9 billion. Through a combination of litigation and collection efforts, Madiganís office generated almost $30 for every tax dollar spent.

ďWith the stateís budget deficit at an all time high, my office has continued to reduce our reliance on taxpayer dollars while seeking to maximize our ability to generate desperately needed revenue for the state,Ē Attorney General Madigan said.

In 2011, Madiganís office collected more than $908 million on behalf of the state. The Attorney Generalís office collected over $533 million of this amount through litigation, an increase of over $131 million in litigation revenues from 2010. In addition, the Attorney Generalís office collected over $268 million through tobacco litigation and nearly $107 million in estate tax revenues.

Madiganís office operated in 2011 with an appropriation from the stateís general revenue fund of $30,705,700 Ė the lowest level of funding from the stateís general revenue fund since 1997. Nonetheless, Attorney General Madiganís office generated $29.59 for every state general revenue tax dollar the office received in 2011.

The $908 million generated in 2011 does not include tens of millions of dollars that Madiganís office successfully recovered through mediation and litigation, which then is distributed directly to Illinois residents, businesses and organizations often as restitution.

For instance, Attorney General Madiganís Consumer Fraud Bureau recovered and saved more than $43 million on behalf of defrauded Illinois residents and businesses in 2011, including $20 million recovered in a settlement with Countrywide, a subsidiary of Bank of America, over allegations that the former mortgage giant steered African-American and Latino borrowers into risky subprime loans more often than similarly situated white borrowers and charged them more for their loans during the height of the nationís housing boom. Madigan is the only Attorney General in the country to pursue fair lending lawsuits against national banks, including another lawsuit against Wells Fargo, which she continues to litigate.

Attorney General Madiganís office also successfully concluded efforts to recover money lost due to the misuse of taxpayer funds and companies defrauding the state. Among the most notable is a $25 million settlement with Blue Cross Blue Shield of Illinois. Madiganís settlement, reached in conjunction with the U.S. Attorneyís office of the Northern District, resolved a lengthy investigation of allegations that Blue Cross Blue Shield denied insurance coverage for nursing care for sick children and other vulnerable patients and, instead, fraudulently shifted these expenses to state and federal Medicaid programs, costing those programs nearly $12 million. As a result of the settlement, Illinois received $14.25 million and the U.S. Treasury received $9.5 million.

Madiganís office also secured $21 million for the state in November 2011 through a settlement agreement with AstraZeneca Pharmaceuticals, resolving allegations that the drug company defrauded the state by inflating the wholesale prices used in setting the rates for Medicaid reimbursements. This settlement is part of Madiganís ongoing investigation of drug companies defrauding the Medicaid program by inflating wholesale prices, and it brings the total amount recovered for the state through these investigations to more than $52 million.

In addition, Madiganís office has worked to secure more than $62 million in unpaid gasoline sales taxes in a joint initiative with the stateís revenue department that began in late 2010. This ongoing investigation is aimed at cracking down on gas station owners who have evaded paying sales taxes by falsely reporting gasoline sales figures and caused the loss of millions of dollars in state tax revenue.

The Attorney Generalís Antitrust Bureau also recovered $9.375 million last year for Illinois governmental entities, educational institutions and nonprofits from five national banks for engaging in a bid rigging scheme for municipal derivatives. This scheme raised the prices for bond derivatives purchased by Illinois governments, schools and nonprofits.

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