[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1492 Introduced in Senate (IS)]







104th CONGRESS
  1st Session
                                S. 1492

     To amend the Robert T. Stafford Disaster Relief and Emergency 
     Assistance Act to combat fraud and price-gouging committed in 
 connection with the provision of consumer goods and services for the 
  cleanup, repair, and recovery from the effects of a major disaster 
           declared by the President, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 21, 1995

  Mr. Akaka  (for himself, Mr. Glenn, and Mr. Inouye) introduced the 
 following bill; which was read twice and referred to the Committee on 
                      Environment and Public Works

_______________________________________________________________________

                                 A BILL


 
     To amend the Robert T. Stafford Disaster Relief and Emergency 
     Assistance Act to combat fraud and price-gouging committed in 
 connection with the provision of consumer goods and services for the 
  cleanup, repair, and recovery from the effects of a major disaster 
           declared by the President, 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 ``Disaster Victims Crime Prevention 
Act of 1995''.

SEC. 2. PREVENTION OF FRAUD FOLLOWING MAJOR DISASTERS.

    (a) In General.--Title III of the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act (42 U.S.C. 5141 et seq.) is 
amended--
            (1) by redesignating sections 315 through 321 as sections 
        316 through 322, respectively; and
            (2) by inserting after section 314 the following:

``SEC. 315. PREVENTION OF FRAUD FOLLOWING MAJOR DISASTERS.

    ``(a) Definitions.--In this section:
            ``(1) Agreement.--The term `agreement', with respect to the 
        provision of a consumer good or service, includes an offer or 
        undertaking to provide or arrange for the provision of the 
        consumer good or service without regard to whether an 
        enforceable contract is entered into.
            ``(2) Consumer good or service.--The term `consumer good or 
        service' means a good, piece of equipment, or service provided 
        primarily for personal, family, or household purposes, 
        including food, water, ice, a chemical, a building supply, a 
        tool, a petroleum product, a residential lease property, a 
        residential construction, reconstruction, or repair service, or 
        a service for the removal of debris (including a damaged tree) 
        and garbage.
            ``(3) Provide.--The term `provide', with respect to a 
        consumer good or service, means to sell, lease, or otherwise 
        provide in exchange for consideration, the good or service.
            ``(4) Supplier.--The term `supplier' includes a seller, 
        reseller, wholesaler, distributor, retailer, lessor, provider, 
        or licensed or unlicensed contractor, subcontractor, or 
        laborer, involved in the provision or distribution of a 
        consumer good or service.
    ``(b) Establishment of Anti-Fraud Strike Forces.--Following the 
declaration of the existence of a major disaster by the President, the 
Attorney General shall--
            ``(1) consult with the United States Attorney for the 
        district in which the disaster occurred and with State and 
        local law enforcement officials to determine the extent to 
        which victims of the disaster are being further victimized by 
        fraudulent or otherwise unscrupulous activities of suppliers 
        offering consumer goods and services for the cleanup, repair, 
        and other recovery from the effects of the disaster; and
            ``(2) if it appears that the extent of the activities 
        referred to in paragraph (1) is such that the resources of the 
        officials are not sufficient to quickly and adequately 
        investigate and prosecute the activities, establish an anti-
        fraud task force of investigators and prosecutors to combat the 
        activities in the area affected by the disaster.
    ``(c) Fraud Involving Disaster Victims.--
            ``(1) Suppliers of consumer goods and services.--
                    ``(A) Offense.--During the period beginning on the 
                date the existence of a major disaster is declared by 
                the President and ending 180 days after that date, and 
                within the area to which the declaration applies, a 
                supplier who by false pretenses, by the making of a 
                representation that the supplier knows, or has reason 
                to know, is false or misleading, or through fraudulent 
                conduct, obtains money or any other thing of value in 
                connection with an agreement to provide a consumer good 
                or service for the cleanup, repair, or other recovery 
                from the effects of a major disaster shall be punished 
                as provided in subparagraph (B).
                    ``(B) Penalty.--A supplier who commits an offense 
                described in subparagraph (A) shall be imprisoned not 
                more than 10 years or fined under title 18, United 
                States Code, or both.
                    ``(C) Presumptions.--For the purposes of 
                subparagraph (A), a supplier shall be considered to 
                obtain money or another thing of value by false 
                pretenses if--
                            ``(i)(I) the supplier uses the money or 
                        other thing of value for any purpose other than 
                        to--
                                    ``(aa) purchase materials to be 
                                used in carrying out the agreement;
                                    ``(bb) pay for work performed or 
                                other expenses incurred in connection 
                                with the agreement; or
                                    ``(cc) pay for a proportionate 
                                share of the overhead and profit of the 
                                supplier; and
                            ``(II) the person with whom the agreement 
                        was made has not authorized, in writing, the 
                        use of the money or other thing of value for a 
                        purpose other than a purpose described in item 
                        (aa), (bb), or (cc) of subclause (I); or
                            ``(ii) in the case of an agreement to 
                        provide or arrange for the provision of a 
                        residential construction, reconstruction, or 
                        repair service, or a service for the removal of 
                        debris (including a damaged tree) and garbage--
                                    ``(I) the supplier receives more 
                                than 10 percent of the money or other 
                                thing of value under the agreement for 
                                the service and fails to--
                                            ``(aa) apply for each 
                                        permit necessary to carry out 
                                        the agreement by the date that 
                                        is 30 days after the date of 
                                        the receipt of the money or 
                                        thing of value; or
                                            ``(bb) start carrying out 
                                        the construction, 
                                        reconstruction, repair, or 
                                        removal by the date that is 90 
                                        days after the last necessary 
                                        permit is obtained; and
                                    ``(II) the person with whom the 
                                agreement was made has not authorized, 
                                in writing, a longer time period than 
                                the applicable period described in 
                                subclause (I).
            ``(2) Beneficiaries of federal assistance.--
                    ``(A) Offense.--A person who by false pretenses, by 
                the making of a representation that the supplier knows, 
                or has reason to know, is false or misleading, or 
                through fraudulent conduct, obtains a grant or loan of 
                money, a consumer good or service, or any other form of 
                assistance, directly or indirectly, from the Federal 
                Government for use in connection with the cleanup, 
                repair, or other recovery from the effects of a major 
                disaster shall be punished as provided in subparagraph 
                (B).
                    ``(B) Penalty.--A person who commits an offense 
                described in subparagraph (A) shall be imprisoned not 
                more than 10 years or fined under title 18, United 
                States Code, or both.
    ``(d) Price-Gouging of Disaster Victims.--
            ``(1) Offense.--
                    ``(A) In general.--During the period beginning on 
                the date the existence of a major disaster is declared 
                by the President and ending 180 days after that date, 
                and within the area to which the declaration applies, 
                it shall be unlawful for a supplier to provide, or to 
                offer to provide, any consumer good or service at an 
                unconscionably excessive price (as determined under 
                subparagraph (B)).
                    ``(B) Determination of unconscionably excessive 
                price.--
                            ``(i) In general.--For the purpose of 
                        subparagraph (A), whether a price is 
                        unconscionably excessive shall be a question of 
                        law for a court to determine. There shall be 
                        considered to be prima facie evidence that a 
                        price is unconscionably excessive if--
                                    ``(I)(aa) the amount charged 
                                represents a gross disparity between 
                                the price of the consumer good or 
                                service that is the subject of the 
                                transaction and the average price at 
                                which the consumer good or service was 
                                provided, or offered to be provided, by 
                                the supplier in the ordinary course of 
                                business during the 30-day period 
                                immediately prior to the declaration of 
                                the existence of the disaster; or
                                    ``(bb) the amount charged grossly 
                                exceeds the average price at which the 
                                same or similar consumer goods or 
                                services were readily obtainable by 
                                consumers in the trade area during 
the 30-day period immediately prior to the declaration of the existence 
of the disaster; and
                                    ``(II) subject to clause (ii), the 
                                amount by which the amount charged 
                                exceeds the average price referred to 
                                in subclause (I) is not attributable to 
                                increased costs incurred by the 
                                supplier in connection with the 
                                provision of the consumer good or 
                                service.
                            ``(ii) Determination of increased costs of 
                        supplier.--In determining the increased costs 
                        incurred by a supplier under clause (i)(II), an 
                        increase in the replacement cost to the 
                        supplier of a good may not be taken into 
                        account unless the supplier has no reasonable 
                        assurance of recouping the increased 
                        replacement cost in a subsequent sale involving 
                        the good.
            ``(2) Enforcement.--
                    ``(A) Penalty.--A supplier who knowingly violates 
                paragraph (1) shall be imprisoned not more than 1 year 
                or fined not more than $10,000, or both. In addition, a 
                court may require disgorgement of any gain unlawfully 
                acquired and restitution to any injured party.
                    ``(B) Actions by victims.--A person, Federal 
                agency, State, or local government that suffers loss or 
                damage as a result of a violation of paragraph (1) may 
                bring an action against a supplier in a district court 
                of the United States for treble damages, disgorgement, 
                special or punitive damages, reasonable attorney's 
                fees, costs and expenses of suit, and any other 
                appropriate legal or equitable relief, including 
                injunctive relief.
                    ``(C) Actions by state attorneys general.--An 
                attorney general of a State, or other authorized State 
                official, may bring a civil action in the name of the 
                State, on behalf of persons residing in the State, in a 
                district court of the United States that has 
                jurisdiction over the defendant for treble damages, 
                disgorgement, special or punitive damages, reasonable 
                attorney's fees, costs and expenses of suit, and any 
                other appropriate legal or equitable relief, including 
                injunctive relief.
            ``(3) No preemption.--Nothing in this subsection preempts 
        State law.
    ``(e) Provision of Fraud Prevention Information.--The Director of 
the Federal Emergency Management Agency shall--
            ``(1) in consultation with the Attorney General, the 
        Administrator of the Small Business Administration, State 
        attorneys general, and other State officials with 
        responsibility for fraud prevention, develop public information 
        materials to assist victims of major disasters in detecting and 
        avoiding suppliers who attempt to obtain money or other things 
        of value from the victims in exchange for fraudulent or 
        otherwise unscrupulous offers of consumer goods or services for 
        the cleanup, repair, and other recovery from the effects of the 
        disasters; and
            ``(2) provide for the distribution of the materials 
        developed under paragraph (1) to the victims of each major 
        disaster as soon as practicable after the declaration of the 
        existence of the disaster by the President.''.
    (b) Commission of Offense Following a Major Disaster To Be 
Considered an Aggravating Factor.--The United States Sentencing 
Commission, in the exercise of the authority of the Commission under 
section 994 of title 28, United States Code, shall review and, if 
necessary, amend the sentencing guidelines promulgated under the 
section to provide that the commission of an offense under section 
1341, 1343, or 2314 of title 18, United States Code, in connection with 
the provision of a consumer good or service (as defined in section 
315(a)(2) of the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act (as amended by subsection (a)(2))) for the cleanup, 
repair, or other recovery from the effects of a major disaster declared 
by the President under the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act (42 U.S.C. 5121 et seq.) shall be an 
aggravating factor that may result in the imposition of a sentence that 
is twice as great as a sentence that would otherwise be imposed.
                                 <all>