[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3434 Introduced in Senate (IS)]







110th CONGRESS
  2d Session
                                S. 3434

 To combat organized crime involving the illegal acquisition of retail 
goods for the purpose of selling those illegally obtained goods through 
                physical and online retail marketplaces.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             August 1, 2008

  Mr. Durbin introduced the following bill; which was read twice and 
               referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
 To combat organized crime involving the illegal acquisition of retail 
goods for the purpose of selling those illegally obtained goods through 
                physical and online retail marketplaces.

    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 ``Combating Organized Retail Crime Act 
of 2008''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Organized retail crime involves the coordinated 
        acquisition of large volumes of retail merchandise by theft, 
        embezzlement, fraud, false pretenses, or other illegal means 
        from commercial entities engaged in interstate commerce, for 
        the purpose of selling or distributing such illegally obtained 
        items in the stream of commerce. Organized retail crime is a 
        growing problem nationwide that costs American companies and 
        consumers billions of dollars annually and that has a 
        substantial and direct effect upon interstate commerce.
            (2) The illegal acquisition and black-market sale of 
        merchandise by persons engaged in organized retail crime result 
        in an estimated annual loss of hundreds of millions of dollars 
        in sales and income tax revenues to State and local 
        governments.
            (3) The illegal acquisition, unsafe tampering and storage, 
        and unregulated redistribution of consumer products such as 
        baby formula, over-the-counter drugs, and other items by 
        persons engaged in organized retail crime pose a health and 
        safety hazard to consumers nationwide.
            (4) Investigations into organized retail crime have 
        revealed that the illegal income resulting from such crime 
        often benefits persons and organizations engaged in other forms 
        of criminal activity, such as drug trafficking and gang 
        activity.
            (5) Items obtained through organized retail crime are 
        resold in a variety of different marketplaces, including flea 
        markets, swap meets, open-air markets, and Internet auction 
        websites. Increasingly, persons engaged in organized retail 
        crime use Internet auction websites to resell illegally 
        obtained items. The Internet offers such sellers a worldwide 
        market and a degree of anonymity that physical marketplace 
        settings do not offer.

SEC. 3. OFFENSES RELATED TO ORGANIZED RETAIL CRIME.

    (a) Transportation of Stolen Goods.--The first undesignated 
paragraph of section 2314 of title 18, United States Code, is amended 
by inserting after ``more,'' the following: ``or, during any 12-month 
period, of an aggregate value of $5,000 or more during that period,''.
    (b) Sale or Receipt of Stolen Goods.--The first undesignated 
paragraph of section 2315 of title 18, United States Code, is amended 
by inserting after ``$5,000 or more,'' the following: ``or, during any 
12-month period, of an aggregate value of $5,000 or more during that 
period,''.
    (c) Fraud in Connection With Access Devices.--Section 1029(e)(1) of 
title 18, United States Code, is amended by inserting ``Universal 
Product Code label,'' after ``code,''.
    (d) Review and Amendment of Federal Sentencing Guidelines for 
Offenses Related to Organized Retail Crime.--
            (1) Review and amendment.--
                    (A) In general.--The United States Sentencing 
                Commission, pursuant to its authority under section 994 
                of title 28, United States Code, and in accordance with 
                this subsection, shall review and, if appropriate, 
                amend the Federal sentencing guidelines (including its 
                policy statements) applicable to persons convicted of 
                offenses involving organized retail crime, which is the 
                coordinated acquisition of large volumes of retail 
                merchandise by theft, embezzlement, fraud, false 
                pretenses, or other illegal means from commercial 
                entities engaged in interstate commerce for the purpose 
                of selling or distributing such illegally obtained 
                items in the stream of commerce.
                    (B) Offenses.--Offenses referred to in subparagraph 
                (A) may include offenses contained in--
                            (i) sections 1029, 2314, and 2315 of title 
                        18, United States Code; or
                            (ii) any other relevant provision of the 
                        United States Code.
            (2) Requirements.--In carrying out the requirements of this 
        subsection, the United States Sentencing Commission shall--
                    (A) ensure that the Federal sentencing guidelines 
                (including its policy statements) reflect--
                            (i) the serious nature and magnitude of 
                        organized retail crime; and
                            (ii) the need to deter, prevent, and punish 
                        offenses involving organized retail crime;
                    (B) consider the extent to which the Federal 
                sentencing guidelines (including its policy statements) 
                adequately address offenses involving organized retail 
                crime to sufficiently deter and punish such offenses;
                    (C) maintain reasonable consistency with other 
                relevant directives and sentencing guidelines;
                    (D) account for any additional aggravating or 
                mitigating circumstances that might justify exceptions 
                to the generally applicable sentencing ranges; and
                    (E) consider whether to provide a sentencing 
                enhancement for those convicted of conduct involving 
                organized retail crime, where such conduct involves--
                            (i) a threat to public health and safety, 
                        including alteration of an expiration date or 
                        of product ingredients;
                            (ii) theft, conversion, alteration, or 
                        removal of a product label;
                            (iii) a second or subsequent offense; or
                            (iv) the use of advanced technology to 
                        acquire retail merchandise by means of theft, 
                        embezzlement, fraud, false pretenses, or other 
                        illegal means.

SEC. 4. SALES OF ILLEGALLY OBTAINED ITEMS IN PHYSICAL OR ONLINE RETAIL 
              MARKETPLACES.

    (a) In General.--Chapter 113 of title 18, United States Code, is 
amended by adding at the end the following:

``SEC. 2323. ONLINE RETAIL MARKETPLACES.

    ``(a) Definitions.--As used in this section, the following 
definitions shall apply:
            ``(1) High volume seller.--The term `high volume seller' 
        means a user of an online retail marketplace who, in any 
        continuous 12-month period during the previous 24 months, has 
        entered into--
                    ``(A) multiple discrete sales or transactions 
                resulting in the accumulation of an aggregate total of 
                $20,000 or more in gross revenues; or
                    ``(B) 200 or more discrete sales or transactions 
                resulting in the accumulation of an aggregate total of 
                $10,000 or more in gross revenues.
            ``(2) Internet site.--The term `Internet site' means a 
        location on the Internet that is accessible at a specific 
        Internet domain name or address under the Internet Protocol (or 
        any successor protocol), or that is identified by a uniform 
        resource locator.
            ``(3) Online retail marketplace.--The term `online retail 
        marketplace' means an Internet site where users other than the 
        operator of the Internet site can enter into transactions with 
        each other for the sale or distribution of goods or services, 
        and in which--
                    ``(A) such goods or services are promoted through 
                inclusion in search results displayed within the 
                Internet site;
                    ``(B) the operator of the Internet site--
                            ``(i) has the contractual right to 
                        supervise the activities of users with respect 
                        to such goods or services; or
                            ``(ii) has a financial interest in the sale 
                        of such goods or services; and
                    ``(C) in any continuous 12-month period during the 
                previous 24 months, users other than the operator of 
                the Internet site collectively have entered into--
                            ``(i) multiple discrete transactions for 
                        the sale of goods or services aggregating a 
                        total of $500,000 or more in gross revenues; or
                            ``(ii) 1,000 or more discrete transactions 
                        for the sale of goods or services aggregating a 
                        total of $250,000 or more in gross revenues.
            ``(4) Operator of an online retail marketplace.--The term 
        `operator of an online retail marketplace' means a person or 
        entity that--
                    ``(A) operates or controls an online retail 
                marketplace; and
                    ``(B) makes the online retail marketplace available 
                for users to enter into transactions with each other on 
                that marketplace for the sale or distribution of goods 
                or services.
            ``(5) Operator of a physical retail marketplace.--The term 
        `operator of a physical retail marketplace' means a person or 
        entity that rents or otherwise makes available a physical 
        retail marketplace to transient vendors to conduct business for 
        the sale of goods, or services related to such goods.
            ``(6) Physical retail marketplace.--The term `physical 
        retail marketplace' may include a flea market, indoor or 
        outdoor swap meet, open air market, or other similar 
        environment, and means a venue or event in which physical space 
        is made available not more than 4 days per week by an operator 
        of a physical retail marketplace as a temporary place of 
        business for transient vendors to conduct business for the sale 
        of goods, or services related to such goods; and
                    ``(A) in which in any continuous 12-month period 
                during the preceding 24 months, there have been 10 or 
                more days on which 5 or more transient vendors have 
                conducted business at the venue or event; and
                    ``(B) does not mean and shall not apply to an event 
                which is organized and conducted for the exclusive 
                benefit of any community chest, fund, foundation, 
                association, or corporation organized and operated for 
                religious, educational, or charitable purposes, 
                provided that no part of any admission fee or parking 
                fee charged vendors or prospective purchasers, and no 
                part of the gross receipts or net earnings from the 
                sale or exchange of goods or services, whether in the 
                form of a percentage of the receipts or earnings, 
                salary, or otherwise, inures to the benefit of any 
                private shareholder or person participating in the 
                organization or conduct of the event.
            ``(7) Structuring.--The term `structuring' means to 
        knowingly conduct, or attempt to conduct, alone, or in 
        conjunction with or on behalf of 1 or more other persons, 1 or 
        more transactions in currency, in any amount, in any manner, 
        with the purpose of evading categorization as a physical retail 
        marketplace, an online retail marketplace, or a high volume 
        seller.
            ``(8) Temporary place of business.--The term `temporary 
        place of business' means any physical space made open to the 
        public, including but not limited to a building, part of a 
        building, tent or vacant lot, which is temporarily occupied by 
        1 or more persons or entities for the purpose of making sales 
        of goods, or services related to those goods, to the public. A 
        place of business is not temporary with respect to a person or 
        entity if that person or entity conducts business at the place 
        and stores unsold goods there when it is not open for business.
            ``(9) Transient vendor.--The term `transient vendor' means 
        any person or entity that, in the usual course of business, 
        transports inventory, stocks of goods, or similar tangible 
        personal property to a temporary place of business for the 
        purpose of entering into transactions for the sale of such 
        property.
            ``(10) User.--The term `user' means a person or entity that 
        accesses an online retail marketplace for the purpose of 
        entering into transactions for the sale or distribution of 
        goods or services.
            ``(11) Valid physical postal address.--The term `valid 
        physical postal address' means--
                    ``(A) a current street address, including the city, 
                State, and Zip code;
                    ``(B) a Post Office box that has been registered 
                with the United States Postal Service; or
                    ``(C) a private mailbox that has been registered 
                with a commercial mail receiving agency that is 
                established pursuant to United States Postal Service 
                regulations.
    ``(b) Safeguards Against Sales of Illegally-Obtained Items.--
            ``(1) Duties of operators of physical retail marketplaces 
        and online retail marketplaces to conduct account reviews and 
        file suspicious activity reports.--In the event that an 
        operator of a physical or online retail marketplace is 
        presented with documentary evidence showing that a transient 
        vendor of the physical retail marketplace, a user of the online 
        retail marketplace, or a director, officer, employee, or agent 
        of such transient vendor or user, has used or is using the 
        retail marketplace to sell or distribute items that were 
        stolen, embezzled, or obtained by fraud, false pretenses or 
        other illegal means, or has engaged in or is engaging in 
        structuring, the operator shall--
                    ``(A) not later than 15 days after receiving such 
                evidence--
                            ``(i) file a suspicious activity report 
                        with the Attorney General of the United States; 
                        and
                            ``(ii) not later than 5 days after filing 
                        the report, notify any person or entity that 
                        presented the documentary evidence that the 
                        operator filed the report; and
                    ``(B)(i) initiate a review of the account of such 
                transient vendor or user for evidence of illegal 
                activity; and
                    ``(ii) as soon as possible, but not later than 45 
                days after receiving such evidence--
                            ``(I) complete this review; and
                            ``(II) submit the results of such account 
                        review to the Attorney General.
            ``(2) Duties of operators of physical retail marketplaces 
        and online retail marketplaces to terminate sales activity.--
                    ``(A) In general.--If an operator of a physical 
                retail marketplace or an online retail marketplace 
                reasonably determines that, based on the documentary 
                evidence presented to it or the account review 
                conducted by it under paragraph (1), there is clear and 
                convincing evidence that a transient vendor of the 
                physical retail marketplace, a user of the online 
                retail marketplace, or a director, officer, employee or 
                agent of such transient vendor or user, has used or is 
                using the retail marketplace to sell or distribute 
                items that were stolen, embezzled, or obtained by 
                fraud, false pretenses, or other illegal means, or has 
                engaged in or is engaging in structuring, the operator 
                shall, not sooner than 21 days and not later than 45 
                days after submitting the results of the account review 
                to the Attorney General pursuant to paragraph (1), 
                either--
                            ``(i) terminate the ability of the 
                        transient vendor to conduct business at the 
                        physical retail marketplace or terminate the 
                        ability of the user to conduct transactions on 
                        the online retail marketplace, and notify the 
                        Attorney General of such action; or
                            ``(ii)(I) request that the transient vendor 
                        or user present documentary evidence that the 
                        operator reasonably determines to be clear and 
                        convincing showing that the transient vendor or 
                        user has not used the retail marketplace to 
                        sell or distribute items that were stolen, 
                        embezzled, or obtained by fraud, false 
                        pretenses, or other illegal means, or has not 
                        engaged in or is not engaging in structuring; 
                        and
                            ``(II)(aa) if the transient vendor or user 
                        fails to present such information within 45 
                        days of such request, terminate the ability of 
                        the transient vendor to conduct business at the 
                        physical retail marketplace or terminate the 
                        ability of the user to conduct transactions on 
                        the online retail marketplace, and notify the 
                        Attorney General of such action; or
                            ``(bb) if the transient vendor or user 
                        presents such information within 45 days, then 
                        the operator shall report such information to 
                        the Attorney General and notify the transient 
                        vendor or user that the operator will not 
                        terminate the activities of the transient 
                        vendor or user.
                    ``(B) Attorney general authorization.--The Attorney 
                General or a designee may, with respect to the timing 
                of the operator's actions pursuant to this paragraph, 
                authorize the operator in writing to take such action 
                prior to 21 days after submitting the results of the 
                account review to the Attorney General or direct the 
                operator in writing and for good cause to delay such 
                action to a date later than 45 days after submitting 
                the results of the account review.
            ``(3) Documentary evidence.--The documentary evidence 
        referenced in paragraphs (1) or (2)--
                    ``(A) shall refer to 1 or more specific items, 
                individuals, entities or transactions allegedly 
                involved in theft, embezzlement, fraud, false 
                pretenses, or other illegal activity; and
                    ``(B) shall be--
                            ``(i) video recordings;
                            ``(ii) audio recordings;
                            ``(iii) sworn affidavits;
                            ``(iv) financial, accounting, business, or 
                        sales records;
                            ``(v) records or transcripts of phone 
                        conversations;
                            ``(vi) documents that have been filed in a 
                        Federal or State court proceeding; or
                            ``(vii) signed reports to or from a law 
                        enforcement agency.
            ``(4) Retention of records.--
                    ``(A) Retail marketplaces.--Each operator of a 
                physical retail marketplace and each operator of an 
                online retail marketplace shall maintain--
                            ``(i) a record of all documentary evidence 
                        presented to it pursuant to paragraph (1) for 3 
                        years from the date the operator received the 
                        evidence;
                            ``(ii) a record of the results of all 
                        account reviews conducted pursuant to paragraph 
                        (1), and any supporting documentation, for 3 
                        years from the date of the review; and
                            ``(iii) a copy of any suspicious activity 
                        report filed with the Attorney General pursuant 
                        to this subsection, and the original supporting 
                        documentation concerning any report that it 
                        files, for 3 years from the date of the filing.
                    ``(B) Online retail marketplace.--Each operator of 
                an online retail marketplace shall maintain, for 3 
                years after the date a user becomes a high volume 
                seller, the name, telephone number, e-mail address, 
                valid physical postal address, and any other 
                identification information that the operator receives 
                about the high volume seller.
            ``(5) Confidentiality of reports.--No operator of a 
        physical retail marketplace or online retail marketplace, and 
        no director, officer, employee or agent of such operator, may 
        notify any individual or entity that is the subject of a 
        suspicious activity report filed pursuant to paragraph (1), or 
        of an account review performed pursuant to paragraph (1), of 
        the fact that the operator filed such a report or performed 
        such an account review, or of any information contained in the 
        report or account review.
            ``(6) High volume sellers.--
                    ``(A) Valid postal address.--An operator of an 
                online retail marketplace shall require each high 
                volume seller to display a valid physical postal 
                address whenever other information about the items or 
                services being sold by the high volume seller is 
                displayed on the online retail marketplace. Such valid 
                physical postal address must be displayed in a format 
                clearly visible to the average consumer.
                    ``(B) Failure to provide.--In the event that a high 
                volume seller has failed to display a valid physical 
                postal address as required in this paragraph, the 
                operator of the online retail marketplace shall--
                            ``(i) within 15 days notify the user of its 
                        duty to display a valid physical postal 
                        address; and
                            ``(ii) if 45 days after providing this 
                        initial notification the user still has not 
                        displayed a valid physical postal address, 
                        shall--
                                    ``(I) terminate the ability of the 
                                user to conduct transactions on 
                                marketplace; and
                                    ``(II) file within 15 days a 
                                suspicious activity report with the 
                                Attorney General of the United States.
            ``(7) Contents of suspicious activity reports.--A 
        suspicious activity report submitted by an operator to the 
        Attorney General pursuant to paragraph (1) or (6) shall contain 
        the following information:
                    ``(A) The name, address, telephone number, and e-
                mail address of the individual or entity that is the 
                subject of the report, to the extent known.
                    ``(B) Any other information that is in the 
                possession of the operator filing the report regarding 
                the identification of the individual or entity that is 
                the subject of the report.
                    ``(C) A copy of the documentary evidence and other 
                information that led to the filing of the report 
                pursuant to paragraph (1) or (6).
                    ``(D) A detailed description of the results of the 
                account review conducted pursuant to paragraph (1).
                    ``(E) Such other information as the Attorney 
                General may by regulation prescribe.
    ``(c) Voluntary Reports.--Nothing in this section prevents an 
operator of a physical retail marketplace or online retail marketplace 
from voluntarily reporting to a Federal, State, or local government 
agency any suspicious activity that such operator believes is relevant 
to the possible violation of any law or regulation, provided that the 
operator also complies with the requirements of this section.
    ``(d) Structuring.--No individual or entity shall engage in 
structuring as defined in this section.
    ``(e) Enforcement by Attorney General.--
            ``(1) In general.--Any individual or entity who knowingly 
        commits a violation of, or knowingly fails to comply with the 
        requirements specified in, paragraph (1), (2), (4), (5), (6), 
        or (7) of subsection (b), or subsection (d), shall be liable to 
        the United States Government for a civil penalty of not more 
        than $10,000 per violation.
            ``(2) False statements.--
                    ``(A) Intent to influence an operator.--Any person 
                who knowingly makes any material false or fictitious 
                statement or representation with the intent to 
                influence an operator of a physical retail marketplace 
                or an operator of an online retail marketplace to file 
                a suspicious activity report under subsection (b) shall 
                be liable to the United States Government for a civil 
                penalty of not more than $10,000 per violation.
                    ``(B) Suspicious activity report.--Any person who 
                knowingly and willfully makes any material false or 
                fictitious statement or representation in any 
                suspicious activity report required under subsection 
                (b) may, upon conviction thereof, be subject to 
                liability under section 1001.
    ``(f) Enforcement by States.--
            ``(1) Civil action.--In any case in which the attorney 
        general of a State has reason to believe that an interest of 
        the residents of that State has been or is threatened or 
        adversely affected by any person or entity who has committed or 
        is committing a violation of this section, the attorney 
        general, official, or agency of the State, as parens patriae, 
        may bring a civil action on behalf of the residents of the 
        State in a district court of the United States of appropriate 
        jurisdiction--
                    ``(A) to enjoin further violation of this section 
                by the defendant;
                    ``(B) to obtain damages on behalf of the residents 
                of the State in an amount equal to the actual monetary 
                loss suffered by such residents; or
                    ``(C) to impose civil penalties in the amounts 
                specified in subsection (e).
            ``(2) Written notice.--
                    ``(A) In general.--The State shall serve prior 
                written notice of any civil action under paragraph (1) 
                upon the Attorney General of the United States, 
                including a copy of its complaint, except that if it is 
                not feasible for the State to provide such prior 
                notice, the State shall serve such notice immediately 
                upon instituting such action.
                    ``(B) Attorney general action.--Upon receiving a 
                notice respecting a civil action under subparagraph 
                (A), the Attorney General of the United States shall 
                have the right--
                            ``(i) to intervene in such action;
                            ``(ii) upon so intervening, to be heard on 
                        all matters arising therein; and
                            ``(iii) to file petitions for appeal.
            ``(3) State powers preserved.--For purposes of bringing any 
        civil action under this subsection, nothing in this chapter 
        shall prevent an attorney general of a State from exercising 
        the powers conferred on the attorney general by the laws of 
        such State to conduct investigations or to administer oaths or 
        affirmations or to compel the attendance of witnesses or the 
        production of documentary and other evidence.
            ``(4) Pending federal action.--Whenever a civil action has 
        been instituted by the Attorney General of the United States 
        for violation of any rule prescribed under subsection (e), no 
        State may, during the pendency of such action instituted by the 
        Attorney General of the United States, institute a civil action 
        under this subsection against any defendant named in the 
        complaint in such action for any violation alleged in such 
        complaint.
            ``(5) Jurisdiction.--
                    ``(A) In general.--Any civil action brought under 
                this subsection in a district court of the United 
                States may be brought in the district in which the 
                defendant is found, is an inhabitant, or transacts 
                business or wherever venue is proper under section 1391 
                of title 28.
                    ``(B) Process.--Process in an action under this 
                subsection may be served in any district in which the 
                defendant is an inhabitant or in which the defendant 
                may be found.
    ``(g) No Private Right of Action.--Nothing in this section shall be 
interpreted to authorize a private right of action for a violation of 
any provision of this section, or a private right of action under any 
other provision of Federal or State law to enforce a violation of this 
section.''.
    (b) Chapter Analysis.--The chapter analysis for chapter 113 of 
title 18, United States Code, is amended by inserting after the item 
for section 2322 the following:

``2323. Online retail marketplaces.''.

SEC. 5. NO PREEMPTION OF STATE LAW.

    No provision of this Act, including any amendment made by this Act, 
shall be construed as indicating an intent on the part of Congress to 
occupy the field in which that provision or amendment operates, 
including criminal penalties, to the exclusion of any State law on the 
same subject matter that would otherwise be within the authority of the 
State, unless there is a positive conflict between that provision or 
amendment and that State law so that the 2 cannot consistently stand 
together.

SEC. 6. EFFECTIVE DATE.

    The amendments made by this Act take effect 120 days after the date 
of the enactment of this Act.
                                 <all>