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Make fraudsters fund services for crime victims

Crime continues to tumble to record lows. That means fewer victims and survivors, and, ideally, a greater level of services for those harmed by crime.  

But there is a problem. The federal Crime Victims Fund is shrinking even faster than the crime rate. From 2017 to 2024, the fund’s value fell by 90 percent while the violent crime rate dropped by only 6.2 percent, from 382.9 offenses per 100,000 people to 359.1.

Fortunately, a solution for this shortfall has passed the U.S. House and awaits action in the Senate.

The Crime Victims Fund, created under the Victims of Crime Act signed by President Ronald Reagan in 1984, helps more than 6 million crime victims and survivors each year. Its funds are a lifeline, supporting domestic violence shelters, child advocacy centers, counseling for sexual assault survivors and compensation for families affected by violent offenses.

The Victims of Crime Act does not rely on taxpayer dollars — its funding comes entirely from fines and penalties paid by people convicted in federal courts. This structure has its advantages, including immunity from the periodic curse of government shutdowns.

But sadly, the Crime Victims Fund is in free fall. At the end of fiscal 2024, the fund’s balance had dropped to just $1.2 billion — a far cry from the $13.1 billion it held in 2017. The result: a $600 million cut to victims’ programs.  

Why has the fund been losing steam? Surprisingly, this isn’t a case of partisan gridlock. Rather, the shortfall occurred organically because of its dependence on fines imposed in white-collar crime cases involving large corporate defendants. From 1996 to 2024, fines collected in just 12 federal cases accounted for 45 percent of all deposits into the Crime Victims Fund.

But such jackpot cases are increasingly infrequent, which leaves the fund vulnerable to depletion.

Although the current administration has been clear about its reduced emphasis on white-collar prosecutions, data indicate that it’s part of a trend, with many fewer such cases brought under President Joe Biden than during the Obama administration. State prosecutors may be filling part of the gap, but this doesn’t help the fund. 

As a result, Congress was forced to slash crime victim assistance grants by roughly 40 percent. A handful of states, including Wisconsin and Oregon, are scrambling to backfill some share of the federal cuts, but a large gap in program assistance remains.

For example, Washington state projects a 55 percent reduction in victim services without new funding. On the chopping block are programs that provide a wide range of support. In South Dakota, victims of sex crimes and domestic violence are among those most affected by the shortfall. 

Despite the laudable efforts by states, this piecemeal response leaves too many survivors behind. However, one major source of federal revenue remains untapped: fraud recoveries under the False Claims Act.

By our count, over the last two fiscal years, settlements and judgments under this act have totaled nearly $5 billion. In the fiscal year that ended in September, the Justice Department recovered in excess of $6.8 billion from such settlements, involving matters such as health care fraud, pandemic relief abuse and defense contracting misconduct.

After defrauded agencies and whistleblowers are paid, as required by law, the remaining funds sit in the U.S. Treasury. The Crime Victims Fund Stabilization Act would fix this. The bill, authored by Rep. Ann Wagner (R-Mo.) would temporarily redirect unobligated False Claim Act funds into the Crime Victims Fund through 2029, stabilizing victim services without raising taxes. Backed by 174 Democratic and 153 Republican co-sponsors, and supported by a range of organizations, the bill passed the House by voice vote on Jan. 12.

In the Senate, Judiciary Chair Dick Durbin (D-Ill.) and Sen. Lisa Murkowski (R-Alaska) reintroduced a similar measure with bipartisan backing. A coalition of 42 state attorneys general has already urged Congress to enact some sort of Victims of Crime Act bridge funding to avert further harm.

No lawmaker has voiced opposition to replenishing the Crime Victims Fund, but the prospect of tapping into proceeds of False Claims Act judgments and settlements has triggered concerns about undermining compensation for whistleblowers, who provide the government with much of the information needed to root out instances where companies have defrauded taxpayers. 

But these concerns are unfounded. Under the legislation, the proceeds from False Claims Act cases would flow into the fund only after whistleblower payments are deducted. Such payments are statutorily pegged at between 15 and 30 percent of the recovery. The existing criteria and process for determining where whistleblower payments should fall within that range would remain in place.  

At a time when the federal government is clawing back billions in fraud penalties, failure to reinvest a portion into victim services isn’t just fiscally shortsighted. It also undermines the principle that justice should repair harm. 

The Victim of Crime Act’s founding principle was simple: Those who break the law should help repair the harms caused by crime. Tapping into proceeds from False Claims Act cases will allow Congress to stay true to that principle. 

Marc A. Levin, Esq. and Khalil Cumberbatch co-lead the Centering Justice Initiative at the Council on Criminal Justice, where Levin is chief policy counsel and Cumberbatch is director of engagement and partnerships.

Copyright 2026 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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