Graeme Sloan/Sipa USA via AP Images
As the keeper of the Crime Victims Fund, the Department of Justice has direct control over how much money is in the coffers.
The incoming Trump administration has vowed to slash federal spending by trillions of dollars, a dark moment for those who depend on public services. But even before the election, rape crisis centers, shelters for domestic violence victims, and child abuse treatment programs were grappling with a potentially life-threatening drop in federal funds.
It has nothing to do with the federal budget. The Crime Victims Fund, created by the 1984 Victims of Crime Act (VOCA), is fed by fines and penalties from federal criminal prosecutions against defendants. The fund lends a hand to millions of survivors of violent crime, through direct compensation and financial assistance for organizations that support those survivors.
But the fund’s balance has dropped from $13 billion in fiscal year 2017 to under $3 billion today. Recent cuts have “forc[ed] victim service programs to reduce or eliminate services, lay off staff, and in some cases, close their doors,” Stephanie Love-Patterson, president and CEO of the National Network to End Domestic Violence, told the Prospect.
Francine Garland Stark, executive director of the Maine Coalition to End Domestic Violence, said cuts have already had a chilling effect on the coalition’s regional domestic violence resource centers, despite the state chipping in $6 million in one-time funding for crime victims earlier this year. “When people leave voluntarily from organizations, the most graceful way to anticipate the possibility of a cut is to leave a vacancy open.”
The fund’s balance has dropped from $13 billion in fiscal year 2017 to under $3 billion today.
Garland Stark said there has already been a reduction of services in Maine. In the future, her group’s 24/7 helpline could see a reduction in hours, or the number of court advocates who help survivors navigate the process of seeking a protection from abuse (PFA) order could be lowered. “Judges really do rely on the advocates for the domestic violence resource centers to act as negotiators between the survivor and the person against whom they have the order,” Garland Stark said.
As the keeper of the Crime Victims Fund (CVF), the Department of Justice has direct control over how much money is in the coffers. The more aggressively the agency pursues corporate bad actors and wins monetary restitution, the more money there is for survivors. But an uptick in the agency’s use of deferred and non-prosecution agreements, which until recently did not feed the CVF, has left the fund at critically low levels. There has also been an overall decline in corporate prosecutions brought by the agency since 2000. The low funds—despite efforts by the Biden administration to shore it up—have drawn questions from members of Congress and two new probes into the Justice Department’s stewardship of the fund.
But another risk for domestic violence and other crimes comes in the form of three high-stakes courtroom battles involving another group of crime victims, who are demanding their share of two recent criminal settlements. The unclear outcome has enormous stakes for people struggling to put their lives back together.
FISCAL YEAR 2024 WAS not an auspicious one for the CVF.
In an effort to stabilize the fund, Congress capped the amount that can be disbursed annually. In fiscal year 2024, because of lack of monetary fines replenishing the fund, the cap was set at a near-record low of $1.35 billion. Speaking in October, Garland Stark described the impact of the drop from when the cap was set at $4.4 billion eight years ago to now as “catastrophic.”
In fiscal year 2025, the CVF expects to receive $1.43 billion through a criminal fine TD Bank owes the U.S. government stemming from a guilty plea announced last month, according to a mid-November update from outgoing Office for Victims of Crime Director Kristina Rose. The CVF could also receive up to $380 million from a recent settlement with Raytheon. With the current unencumbered fund balance at around $298 million, according to Rose, those two contributions would put the total balance at just above $2.1 billion, a far cry from the $13 billion in fiscal year 2017, but not as bad as was feared.
Congress signaled it would set a higher cap eventually, though passage of the FY2025 budget has been kicked down the road with a continuing resolution. A deadline for a new budget hits at the end of December, but the dispute could drag into next year.
CVF recipients had another reason to be hopeful, though: They were expecting an additional $1.9 billion deposit into the fund, thanks to settlements that the United States extracted from cryptocurrency giant Binance and cigarette manufacturer British American Tobacco. That would nearly double the outstanding balance.
But then there was a curveball. A different group of victims—Americans who have sued and obtained money judgments against U.S.-deemed state sponsors of terrorism, a list that includes Iran, North Korea, Cuba, and Syria—filed multiple lawsuits against the Justice Department, arguing that in fact they were entitled to the nearly $5 billion in penalties that British American Tobacco and Binance collectively owe the United States, including what was originally set to go to the CVF. These terrorism victims have their own fund, the United States Victims of State Sponsored Terrorism Fund, which is administered by a DOJ-appointed special master.
The terrorism fund has paid out over $6 billion to victims of state-sponsored terrorism and their families. As of July 2024, the fund had nearly 19,000 total eligible claimants, according to the fund’s website.
“It obviously comes as a surprise and a shock, because we were relying on that for our next fiscal year,” said Jaime Yahner, the head of National Association of VOCA Assistance Administrators, which works with the state agencies that administer CVF money to community organizations.
For two lawyers working for the terrorism victim plaintiffs, the Binance and British American Tobacco cases are examples of the DOJ unlawfully shifting around money.
“If you read the statute, it’s crystal clear that the Binance money should go to the [terrorism] victims fund. It’s just crystal clear,” said Robert Tolchin, one of the plaintiff’s lawyers.
The plaintiffs seeking distributions into the state sponsors of terrorism fund include individuals or relatives of individuals who were harmed by Hamas or Hezbollah.
According to federal statute, criminal penalties, fines, and forfeitures arising from a violation of the International Emergency Economic Powers Act (IEEPA) or the Trading With the Enemy Act, “or any related criminal conspiracy, scheme, or other Federal offense arising from the actions of, or doing business with or acting on behalf of, a state sponsor of terrorism,” are meant to be routed into the terrorism fund. About three-quarters of all forfeited civil funds and property related to violations of these two laws also must go into the terrorism fund.
Usually, according to the Justice Department, criminal fines and penalties go into the Crime Victims Fund and asset forfeitures are generally deposited into DOJ’s Assets Forfeiture Fund or the Treasury Forfeiture Fund, where they are used to counter crime and compensate victims of crime.
“It is not up to DOJ to just blithely disregard the statute because they want to have an unfettered slush fund,” said Ryan Sparacino, whose firm has filed an intervenor complaint in the case focused on the British American Tobacco settlement.
Binance pleaded guilty to charges of conspiring to run an unlicensed money transmitting business and violating banking and sanctions laws, including the IEEPA, in November 2023. The company allowed customers from Iran and other U.S. state sponsors of terrorism and assorted “illicit actors” to use its platform and execute transactions. According to DOJ, as part of its guilty plea, Binance agreed to a forfeiture of $898 million related to its IEEPA violation, forfeiture of $1.6 billion related to its failure to register as a money transmitting business, and a criminal fine of $1.8 billion (all together, $4.3 billion). The $898 million has already been deposited into the terrorism fund.
In March 2024, Tolchin sent an email to the terrorism fund, asking why all of the penalties hadn’t been deposited into the terrorism fund.
“As to the Binance case that you referenced, the USVSST Fund staff cannot provide additional information at this time,” the fund responded.
Tolchin filed a complaint in July on behalf of five plaintiffs arguing that multiple defendants—including the DOJ and the terrorism fund’s special master—unlawfully withheld the total $4.3 billion Binance owes the United States, along with a separate charge related to catch-up payments owed to some claimants covered by the fund. In September, another group of plaintiffs sued the Justice Department, also arguing the $4.3 billion should go into the terrorism fund. A U.S. district court judge for the District of Columbia recently consolidated the cases.
In a separate lawsuit filed in June, terrorism victims sued to obtain all the proceeds the U.S. obtained in its case against British American Tobacco. British American Tobacco and one of its subsidiaries agreed to pay $629 million in criminal fines and forfeitures, which, according to the complaint, the plaintiffs are entitled to because the company was charged with conspiracy to commit bank fraud and to violate the IEEPA in connection with a scheme to do business in North Korea, a U.S. state sponsor of terrorism.
The DOJ has countered that North Korea was only listed as a U.S. state sponsor of terrorism for a portion of the time British American Tobacco’s bank fraud scheme was going on, and not at all during the IEEPA conspiracy, so the terrorism fund victims are only entitled to a portion of the fines—$10.9 million, to be exact.
“A junior tennis player’s defeat to a ten-year-old Rafael Nadal did not ‘arise from’ the superior play of a Grand Slam champion, even though Nadal eventually became that champion. Yet these chronology distorting outcomes are precisely what Plaintiffs advocate here,” DOJ lawyers wrote in August.
The plaintiffs say there is no requirement that IEEPA violations or related conspiracies be tied to the actions of a designated state sponsor of terrorism, and the timing of when a state is listed as a state sponsor is irrelevant. The two parties have also sparred over the grammar and sentence structure of the statute.
The DOJ argues that the terrorism fund statute is meant to have a narrow focus, and allowing the plaintiff’s broader reading “would transform the Act’s remedial mechanisms into a redistributive scheme in favor of the Fund—and away from other resources supporting victims of crime more generally.”
The plaintiffs argue that this thinking seems based on “some presumed congressional policy to give heightened protection to one group of victims over another.” They say that getting the Justice Department to comply with the statute is not an effort to redirect funds away from the Crime Victims Fund or any other fund.
The plaintiffs seeking distributions into the state sponsors of terrorism fund include individuals or relatives of individuals who were harmed by Hamas or Hezbollah. U.S. courts have ruled that Iran’s support for these groups makes the country liable for their actions.
For example, Diana Campuzano was injured during a Hamas attack on a mall in Jerusalem in 1997. She sued Iran thanks to a 1996 amendment to the Foreign Sovereign Immunities Act and obtained a money judgment of $18 million. Other plaintiffs have smaller money judgments, and many have yet to receive any money from the terrorism fund, according to plaintiff filings.
According to Tolchin, the fact that Hamas has been routinely in the news for the past year doesn’t have anything to do with why these suits were filed. But he does believe that the Justice Department gives short shrift to the terrorism victims.
“Here’s where I’m going to be a little cynical … Big picture, there has been an animosity towards the terrorism fund [at the Justice Department],” he said. As an example, Tolchin pointed to a recent Government Accountability Office report which noted, among other conclusions, that guidance from the terrorism fund may have dissuaded over 200 claimants from applying for money they were eligible for through the fund.
The Justice Department did not respond to a request for comment regarding the lawsuits or Tolchin’s allegation that there is animosity toward the terrorism victims fund.
CVF RECIPIENTS AND THOSE WHO WORK with them are careful not to speak ill of the rival fund’s legal crusade, even though it has thrown their fiscal year into confusion.
“Nobody wants to be in opposition to another victims group. And we want the money to go where it was meant to go. So if the law says that it should have gone to them, then it should go to them … We really believe that,” said Yahner, from the National Association of VOCA Assistance Administrators.
When asked whether she thought it was appropriate for the smaller, 19,000-person terrorism fund to receive less from the combined Binance and British American Tobacco settlements than the Crime Victims Fund, which serves a much wider network of millions, Stephanie Love-Patterson, head of the National Network to End Domestic Violence, demurred. “I don’t want to get into that, you know, comparison, other than to say that both issues should be fully funded so that we can do the work that we need to do,” she said.
Similarly, Garland Stark of the Maine Coalition to End Domestic Violence said that “it’s inappropriate to frame our questions around which set of people is more deserving than another” and that the country has enough resources to support everyone who needs them.
But the nature of the funding sources for both funds, coming from outside monetary awards, builds in artificial scarcity—and in a time of looming fiscal austerity, it’s doubtful that the Republicans controlling Congress will step in to top off the funds.
Sparacino, the lawyer in the British American Tobacco case, was willing to compare the two victim funds, pointing out that many in the terrorism fund are the families of U.S. military personnel or U.S. civilian officials who “serv[ed] America overseas.”
“Our Nation owes every American—and their family—who makes this unspeakable sacrifice for all of us a unique debt that distinguishes them—as a class—from every other type of victim of crime,” he wrote in an email.
