[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 386 Introduced in Senate (IS)]
111th CONGRESS
1st Session
S. 386
To improve enforcement of mortgage fraud, securities fraud, financial
institution fraud, and other frauds related to federal assistance and
relief programs, for the recovery of funds lost to these frauds, and
for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 5, 2009
Mr. Leahy (for himself, Mr. Grassley, and Mr. Kaufman) introduced the
following bill; which was read twice and referred to the Committee on
the Judiciary
_______________________________________________________________________
A BILL
To improve enforcement of mortgage fraud, securities fraud, financial
institution fraud, and other frauds related to federal assistance and
relief programs, for the recovery of funds lost to these frauds, 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 ``Fraud Enforcement and Recovery Act
of 2009'' or ``FERA''.
SEC. 2. AMENDMENTS TO IMPROVE MORTGAGE, SECURITIES, AND FINANCIAL FRAUD
RECOVERY AND ENFORCEMENT.
(a) Definition of Financial Institution Amended To Include Mortgage
Lending Business.--Section 20 of title 18, United States Code, is
amended--
(1) in paragraph (8), by striking ``or'' after the
semicolon;
(2) in paragraph (9), by striking the period and inserting
``; or''; and
(3) by inserting at the end the following:
``(10) a mortgage lending business (as defined in section
27 of this title) or any person or entity that makes in whole
or in part a federally-related mortgage loan as defined in 12
U.S.C. 2602(1).''.
(b) Mortgage Lending Business Defined.--
(1) In general.--Chapter 1 of title 18, United States Code,
is amended by inserting after section 26 the following:
``Sec. 27. Mortgage lending business defined
``In this title, the term `mortgage lending business' means an
organization which finances or refinances any debt secured by an
interest in real estate, including private mortgage companies and any
subsidiaries of such organizations, and whose activities affect
interstate or foreign commerce.''.
(2) Chapter analysis.--The chapter analysis for chapter 1
of title 18, United States Code, is amended by adding at the
end the following:
``27. Mortgage lending business defined.''.
(c) False Statements in Mortgage Applications Amended To Include
False Statements by Mortgage Brokers and Agents of Mortgage Lending
Businesses.--Section 1014 of title 18, United States Code, is amended
by--
(1) striking ``or'' after ``the International Banking Act
of 1978),''; and
(2) inserting after ``section 25(a) of the Federal Reserve
Act'' the following: ``or a mortgage lending business whose
activities affect interstate or foreign commerce, or any person
or entity that makes in whole or in part a federally-related
mortgage loan as defined in 12 U.S.C. 2602(1)''.
(d) Major Fraud Against the Government Amended To Include Economic
Relief and Troubled Asset Relief Program Funds.--Section 1031(a) of
title 18, United States Code, is amended by--
(1) inserting after ``or promises, in'' the following:
``any grant, contract, subcontract, subsidy, loan, guarantee,
insurance or other form of Federal assistance, including
through the Troubled Assets Relief Program, an economic
stimulus, recovery or rescue plan provided by the Government,
or the Government's purchase of any preferred stock in a
company, or''; and
(2) striking ``the contract, subcontract'' and inserting
``such grant, contract, subcontract, subsidy, loan, guarantee,
insurance or other form of Federal assistance,''.
(e) Securities Fraud Amended To Include Fraud Involving Options and
Futures in Commodities.--
(1) In general.--Section 1348 of title 18, United States
Code, is amended--
(A) in the caption, by inserting ``and
commodities'' after ``Securities'';
(B) by inserting ``any commodity for future
delivery, or any option on a commodity or a commodity
for future delivery, or'' after ``any person in
connection with'' ; and
(C) by inserting ``any commodity for future
delivery, or any option on a commodity or a commodity
for future delivery, or'' after ``in connection with
the purchase or sale of''.
(2) Chapter analysis.--The item for section 1348 in the
chapter analysis for chapter 63 of title 18, United States
Code, is amended by inserting ``and commodities'' after
``Securities''.
(f) Money Laundering Amended To Define Proceeds of Specified
Unlawful Activity.--Section 1956(c) of title 18, United States Code, is
amended--
(1) in paragraph (8), by striking the period and inserting
``; and''; and
(2) by inserting at the end the following:
``(9) the term `proceeds' means any property derived from
or obtained or retained, directly or indirectly, through the
commission of a specified unlawful activity, including the
gross receipts of such specified unlawful activity.''.
(g) Making the International Money Laundering Statute Apply to Tax
Evasion.--Section 1956(a)(2)(A) of title 18, United States Code, is
amended by--
(1) inserting ``(i)'' before ``with the intent to
promote''; and
(2) adding at the end the following:
``(ii) with the intent to engage in conduct
constituting a violation of section 7201 or
7206 of the Internal Revenue Code of 1986;
or''.
SEC. 3. ADDITIONAL FUNDING FOR INVESTIGATORS AND PROSECUTORS FOR
MORTGAGE FRAUD, SECURITIES FRAUD, AND OTHER CASES
INVOLVING FEDERAL ECONOMIC ASSISTANCE.
(a) In General.--
(1) Authorization.--There is authorized to be appropriated
to the Attorney General, to remain available until expended,
$155,000,000 for each of the fiscal years 2010 and 2011, for
the purposes of investigations, prosecutions, and civil
proceedings involving federal assistance programs and financial
institutions, including financial institutions to which this
Act and amendments made by this Act apply.
(2) Allocations.--With respect to fiscal years 2010 and
2011, the amount authorized to be appropriated under paragraph
(1) shall be allocated as follows:
(A) Federal Bureau of Investigation: $65,000,000.
(B) The offices of the United States Attorneys:
$50,000,000.
(C) The criminal division of the Department of
Justice: $20,000,000.
(D) The civil division of the Department of
Justice: $15,000,000.
(E) The tax division of the Department of Justice:
$5,000,000.
(b) Additional Appropriations for the Postal Inspection Service.--
There is authorized to be appropriated to the Postal Inspection Service
of the United States Postal Service, $30,000,000 for each of the fiscal
years 2010 and 2011 for investigations involving federal assistance
programs and financial institutions, including financial institutions
to which this Act and amendments made by this Act apply.
(c) Additional Appropriations for the Inspector General for the
Housing and Urban Development Department.--There is authorized to be
appropriated to the Inspector General of the Department of Housing and
Urban Development, $30,000,000 for each of the fiscal years 2010 and
2011 for investigations involving Federal assistance programs and
financial institutions, including financial institutions to which this
Act and amendments made by this Act apply.
(d) Use of Funds.--The funds authorized to be appropriated under
subsections (a), (b), and (c), shall be limited to cover the costs of
each listed agency or department for investigating possible criminal,
civil, or administrative violations and for prosecuting criminal,
civil, or administrative proceedings involving financial crimes and
crimes against Federal assistance programs, including mortgage fraud,
securities fraud, financial institution fraud, and other frauds related
to Federal assistance and relief programs
(e) Report to Congress.--Following the final expenditure of all
funds appropriated under this section that were authorized by
subsections (a), (b), and (c), the Attorney General, in consultation
with the United States Postal Inspection Service and the Inspector
General for the Department of Housing and Urban Development, shall
submit a joint report to Congress identifying--
(1) the amounts expended under subsections (a), (b), and
(c) and a certification of compliance with the requirements
listed in subsection (d); and
(2) the amounts recovered as a result of criminal or civil
restitution, fines, penalties, and other monetary recoveries
resulting from criminal, civil, or administrative proceedings
and settlements undertaken with funds authorized by this Act.
SEC. 4. CLARIFICATIONS TO THE FALSE CLAIMS ACT TO REFLECT THE ORIGINAL
INTENT OF THE LAW.
(a) Clarification of the False Claims Act.--Section 3729 of title
31, United States Code, is amended--
(1) by striking subsection (a) and inserting the following:
``(a) Liability for Certain Acts.--
``(1) In general.--Subject to paragraph (2), any person
who--
``(A) knowingly presents, or causes to be
presented, a false or fraudulent claim for payment or
approval;
``(B) knowingly makes, uses, or causes to be made
or used, a false record or statement to get a false or
fraudulent claim paid or approved;
``(C) conspires to commit a violation of
subparagraph (A), (B), (D), (E), (F), or (G) or
otherwise to get a false or fraudulent claim paid or
approved;
``(D) has possession, custody, or control of
property or money used, or to be used, by the
Government and knowingly delivers, or causes to be
delivered, less than all of that money or property;
``(E) is authorized to make or deliver a document
certifying receipt of property used, or to be used, by
the Government and, intending to defraud the
Government, makes or delivers the receipt without
completely knowing that the information on the receipt
is true;
``(F) knowingly buys, or receives as a pledge of an
obligation or debt, public property from an officer or
employee of the Government, or a member of the Armed
Forces, who lawfully may not sell or pledge property;
or
``(G) knowingly makes, uses, or causes to be made
or used, a false record or statement to conceal, avoid,
or decrease an obligation to pay or transmit money or
property to the Government, or knowingly conceals,
avoids, or decreases an obligation to pay or transmit
money or property to the Government,
is liable to the United States Government for a civil penalty
of not less than $5,000 and not more than $10,000, as adjusted
by the Federal Civil Penalties Inflation Adjustment Act of 1990
(28 U.S.C. 2461 note; Public Law 104-410), plus 3 times the
amount of damages which the Government sustains because of the
act of that person.
``(2) Reduced damages.--If the court finds that--
``(A) the person committing the violation of this
subsection furnished officials of the United States
responsible for investigating false claims violations
with all information known to such person about the
violation within 30 days after the date on which the
defendant first obtained the information;
``(B) such person fully cooperated with any
Government investigation of such violation; and
``(C) at the time such person furnished the United
States with the information about the violation, no
criminal prosecution, civil action, or administrative
action had commenced under this title with respect to
such violation, and the person did not have actual
knowledge of the existence of an investigation into
such violation,
the court may assess not less than 2 times the amount of
damages which the Government sustains because of the act of
that person.
``(3) Costs of civil actions.--A person violating this
subsection shall also be liable to the United States Government
for the costs of a civil action brought to recover any such
penalty or damages.'';
(2) by striking subsections (b) and (c) and inserting the
following:
``(b) Definitions.--For purposes of this section--
``(1) the terms `knowing' and `knowingly' mean that a
person, with respect to information--
``(A) has actual knowledge of the information;
``(B) acts in deliberate ignorance of the truth or
falsity of the information; or
``(C) acts in reckless disregard of the truth or
falsity of the information, and no proof of specific
intent to defraud is required;
``(2) the term `claim'--
``(A) means any request or demand, whether under a
contract or otherwise, for money or property and
whether or not the United States has title to the money
or property, that--
``(i) is presented to an officer, employee,
or agent of the United States; or
``(ii) is made to a contractor, grantee, or
other recipient if the United States
Government--
``(I) provides or has provided any
portion of the money or property
requested or demanded; or
``(II) will reimburse such
contractor, grantee, or other recipient
for any portion of the money or
property which is requested or
demanded; and
``(B) does not include requests or demands for
money or property that the Government has paid to an
individual as compensation for Federal employment or as
an income subsidy with no restrictions on that
individual's use of the money or property; and
``(3) the term `obligation' means a fixed duty, or a
contingent duty arising from an express or implied contractual,
quasi-contractual, grantor-grantee, licensor-licensee, fee-
based, or similar relationship, and the retention of any
overpayment.'';
(3) by redesignating subsections (d) and (e) as subsections
(c) and (d), respectively; and
(4) in subsection (c), as redesignated, by striking
``subparagraphs (A) through (C) of subsection (a)'' and
inserting ``subsection (a)(2)''.
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