[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 1816 Introduced in Senate (IS)]

103d CONGRESS
  2d Session
                                S. 1816

To amend the Child Nutrition Act of 1966 to protect against trafficking 
  in food instruments and other frauds in connection with the special 
 supplemental food program for women, infants, and children (WIC), and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

             February 1 (legislative day, January 25), 1994

   Mr. Leahy introduced the following bill; which was read twice and 
   referred to the Committee on Agriculture, Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL


 
To amend the Child Nutrition Act of 1966 to protect against trafficking 
  in food instruments and other frauds in connection with the special 
 supplemental food program for women, infants, and children (WIC), and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``WIC Fraud Prosecution Act of 1994''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) the special supplemental food program for women, 
        infants, and children (WIC) established under section 17 of the 
        Child Nutrition Act of 1966 (42 U.S.C. 1786) provides vital and 
        nutritious foods to vulnerable Americans;
            (2) the improper diversion of WIC benefits by stores and 
        other food vendors authorized to accept WIC food instruments 
        harms the entire WIC program; and
            (3) severe penalties should be imposed on store owners and 
        managers and WIC clinic employees engaged in trafficking in WIC 
        food instruments.

SEC. 3. DISQUALIFICATION AND CIVIL MONEY PENALTIES FOR WIC FOOD 
              VENDORS; CRIMINAL PENALTIES.

    Section 17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786) is 
amended by adding at the end the following new subsection:
    ``(q)(1) Except as provided in paragraph (2), any food vendor 
authorized to participate in the program authorized under subsection 
(c)(1) (referred to in this subsection as the `program') shall be 
permanently disqualified from further participation in the program, on 
a finding, made in accordance with regulations issued by the Secretary, 
that any owner, officer, supervisor, or manager of the vendor 
intentionally--
            ``(A) trafficked in program food instruments or otherwise 
        obtained program food instruments by buying the instruments at 
        a discount in an unlawful manner;
            ``(B) obtained benefits purchased at a discount through the 
        improper use of a program access device; or
            ``(C) sold or purchased firearms, ammunition, explosives, 
        or controlled substances (as defined in section 102(6) of the 
        Controlled Substances Act (21 U.S.C. 802(6))) in exchange for, 
        or with, program food instruments.
    ``(2) If the Secretary determines that disqualification of a food 
vendor would cause hardship to persons participating in the program, in 
lieu of disqualification under paragraph (1), the Secretary may impose 
on the vendor a civil money penalty of up to $20,000 for each violation 
described in paragraph (1).
    ``(3) Any owner, officer, supervisor, or manager of a program food 
vendor or any employee of a program clinic who intentionally traffics 
in program food instruments or otherwise obtains program food 
instruments by buying the instruments at a discount in a manner not 
permitted by law shall be guilty of a felony and shall be fined not 
more than $100,000 or imprisoned not more than 10 years, or both.
    ``(4)(A) At any time after imposing a money penalty under this 
subsection, the Secretary may request the Attorney General to institute 
a civil action to collect the penalty against a person subject to the 
penalty in a district court of the United States for any district in 
which the person is found, resides, or transacts business.
    ``(B) The court shall have jurisdiction to hear and decide the 
action.
    ``(C) In the action, the validity and amount of the penalty shall 
not be subject to review.
    ``(5)(A) The Secretary may impose a fine against any person not 
approved by the Secretary to accept program food instruments who 
violates this subsection or a regulation issued under this subsection, 
including a violation concerning the acceptance of program food 
instruments and including such violations by employees of program 
clinics.
    ``(B) The amount of the fine shall be established by the Secretary 
and may be assessed and collected in accordance with regulations issued 
under this subsection separately or in combination with any fiscal 
claim established by the Secretary.
    ``(C) The Attorney General may institute judicial action in any 
court of competent jurisdiction against the person to collect the fine.
    ``(6) Whoever presents, or causes to be presented, a program food 
instrument, or who uses a program access device, knowing that the 
instrument or device to have been received, transferred, or used in 
violation of this subsection or the regulations issued under this 
subsection shall be guilty of a felony and--
            ``(A) on the first conviction of the felony, shall be fined 
        not more than $20,000 or imprisoned for not more than 5 years, 
        or both; and
            ``(B) on the second and any subsequent conviction of the 
        felony, shall be imprisoned for not less than 1 year and not 
        more than 5 years and may also be fined not more than $30,000.
    ``(7) In addition to other penalties imposed under this subsection, 
any person convicted of a violation of this subsection may be suspended 
by a court from participation in the program for a period of up to 2 
years.
    ``(8)(A) The Secretary may subject to forfeiture and denial of 
property rights any nonfood item, money, negotiable instrument, 
security, vendor property (including a building), or other item of 
value that is furnished or intended to be furnished by any person in 
exchange for a program food instrument or program access device, or 
anything of value obtained by use of an access device or program food 
instruments, or which item or property is used in facilitating such 
trafficking, in any manner that violates this subsection or a 
regulation issued under this subsection.
    ``(B) Any forfeiture and disposal of property forfeited under this 
subsection for a violation described in subparagraph (A) shall be 
conducted in accordance with procedures specified in regulations issued 
by the Secretary.''.

SEC. 4. DETECTION OF TRAFFICKING IN WIC FOOD INSTRUMENTS OR ACCESS 
              DEVICES.

    Section 17(f)(1) of the Child Nutrition Act of 1966 (42 U.S.C. 
1786(f)(1)) is amended--
            (1) in subparagraph (C)--
                    (A) by striking ``and'' at the end of clause (xii);
                    (B) by redesignating clause (xiii) as clause (xiv); 
                and
                    (C) by inserting after clause (xii) the following 
                new clause:
            ``(xiii) a detailed plan for the detection and punishment 
        of store owners or program food vendors for trafficking in food 
        instruments or access devices used in connection with the 
        program authorized subsection (c)(1), subject to subparagraph 
        (F); and''; and
            (2) by adding at the end the following new subparagraph:
    ``(F)(i) The plan described in subparagraph (C)(xiii) shall target 
higher risk stores or vendors.
    ``(ii) The State agency shall set aside funds for carrying out 
subparagraph (C)(xiii).
    ``(iii) The State agency shall fully cooperate with the attorney 
general of a State, county attorneys, law enforcement officers, and 
Federal prosecutors or law enforcement personnel in any investigation 
of trafficking in food instruments or access devices used in connection 
with the program authorized under subsection (c)(1).''.

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