[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 386 Reported in Senate (RS)]

                                                        Calendar No. 28
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, Mr. Kaufman, Ms. Klobuchar, and 
 Mr. Schumer) introduced the following bill; which was read twice and 
               referred to the Committee on the Judiciary

                             March 5, 2009

                Reported by Mr. Leahy, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 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,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Fraud Enforcement and 
Recovery Act of 2009'' or ``FERA''.</DELETED>

<DELETED>SEC. 2. AMENDMENTS TO IMPROVE MORTGAGE, SECURITIES, AND 
              FINANCIAL FRAUD RECOVERY AND ENFORCEMENT.</DELETED>

<DELETED>    (a) Definition of Financial Institution Amended To Include 
Mortgage Lending Business.--Section 20 of title 18, United States Code, 
is amended--</DELETED>
        <DELETED>    (1) in paragraph (8), by striking ``or'' after the 
        semicolon;</DELETED>
        <DELETED>    (2) in paragraph (9), by striking the period and 
        inserting ``; or''; and</DELETED>
        <DELETED>    (3) by inserting at the end the 
        following:</DELETED>
        <DELETED>    ``(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).''.</DELETED>
<DELETED>    (b) Mortgage Lending Business Defined.--</DELETED>
        <DELETED>    (1) In general.--Chapter 1 of title 18, United 
        States Code, is amended by inserting after section 26 the 
        following:</DELETED>
<DELETED>``Sec. 27. Mortgage lending business defined</DELETED>
<DELETED>    ``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.''.</DELETED>
        <DELETED>    (2) Chapter analysis.--The chapter analysis for 
        chapter 1 of title 18, United States Code, is amended by adding 
        at the end the following:</DELETED>

<DELETED>``27. Mortgage lending business defined.''.
<DELETED>    (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--</DELETED>
        <DELETED>    (1) striking ``or'' after ``the International 
        Banking Act of 1978),''; and</DELETED>
        <DELETED>    (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)''.</DELETED>
<DELETED>    (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--</DELETED>
        <DELETED>    (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</DELETED>
        <DELETED>    (2) striking ``the contract, subcontract'' and 
        inserting ``such grant, contract, subcontract, subsidy, loan, 
        guarantee, insurance or other form of Federal 
        assistance,''.</DELETED>
<DELETED>    (e) Securities Fraud Amended To Include Fraud Involving 
Options and Futures in Commodities.--</DELETED>
        <DELETED>    (1) In general.--Section 1348 of title 18, United 
        States Code, is amended--</DELETED>
                <DELETED>    (A) in the caption, by inserting ``and 
                commodities'' after ``Securities'';</DELETED>
                <DELETED>    (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</DELETED>
                <DELETED>    (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''.</DELETED>
        <DELETED>    (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''.</DELETED>
<DELETED>    (f) Money Laundering Amended To Define Proceeds of 
Specified Unlawful Activity.--Section 1956(c) of title 18, United 
States Code, is amended--</DELETED>
        <DELETED>    (1) in paragraph (8), by striking the period and 
        inserting ``; and''; and</DELETED>
        <DELETED>    (2) by inserting at the end the 
        following:</DELETED>
        <DELETED>    ``(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.''.</DELETED>
<DELETED>    (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--</DELETED>
        <DELETED>    (1) inserting ``(i)'' before ``with the intent to 
        promote''; and</DELETED>
        <DELETED>    (2) adding at the end the following:</DELETED>
                        <DELETED>    ``(ii) with the intent to engage 
                        in conduct constituting a violation of section 
                        7201 or 7206 of the Internal Revenue Code of 
                        1986; or''.</DELETED>

<DELETED>SEC. 3. ADDITIONAL FUNDING FOR INVESTIGATORS AND PROSECUTORS 
              FOR MORTGAGE FRAUD, SECURITIES FRAUD, AND OTHER CASES 
              INVOLVING FEDERAL ECONOMIC ASSISTANCE.</DELETED>

<DELETED>    (a) In General.--</DELETED>
        <DELETED>    (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.</DELETED>
        <DELETED>    (2) Allocations.--With respect to fiscal years 
        2010 and 2011, the amount authorized to be appropriated under 
        paragraph (1) shall be allocated as follows:</DELETED>
                <DELETED>    (A) Federal Bureau of Investigation: 
                $65,000,000.</DELETED>
                <DELETED>    (B) The offices of the United States 
                Attorneys: $50,000,000.</DELETED>
                <DELETED>    (C) The criminal division of the 
                Department of Justice: $20,000,000.</DELETED>
                <DELETED>    (D) The civil division of the Department 
                of Justice: $15,000,000.</DELETED>
                <DELETED>    (E) The tax division of the Department of 
                Justice: $5,000,000.</DELETED>
<DELETED>    (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.</DELETED>
<DELETED>    (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.</DELETED>
<DELETED>    (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</DELETED>
<DELETED>    (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--</DELETED>
        <DELETED>    (1) the amounts expended under subsections (a), 
        (b), and (c) and a certification of compliance with the 
        requirements listed in subsection (d); and</DELETED>
        <DELETED>    (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.</DELETED>

<DELETED>SEC. 4. CLARIFICATIONS TO THE FALSE CLAIMS ACT TO REFLECT THE 
              ORIGINAL INTENT OF THE LAW.</DELETED>

<DELETED>    (a) Clarification of the False Claims Act.--Section 3729 
of title 31, United States Code, is amended--</DELETED>
        <DELETED>    (1) by striking subsection (a) and inserting the 
        following:</DELETED>
<DELETED>    ``(a) Liability for Certain Acts.--</DELETED>
        <DELETED>    ``(1) In general.--Subject to paragraph (2), any 
        person who--</DELETED>
                <DELETED>    ``(A) knowingly presents, or causes to be 
                presented, a false or fraudulent claim for payment or 
                approval;</DELETED>
                <DELETED>    ``(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;</DELETED>
                <DELETED>    ``(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;</DELETED>
                <DELETED>    ``(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;</DELETED>
                <DELETED>    ``(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;</DELETED>
                <DELETED>    ``(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</DELETED>
                <DELETED>    ``(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,</DELETED>
        <DELETED>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.</DELETED>
        <DELETED>    ``(2) Reduced damages.--If the court finds that--
        </DELETED>
                <DELETED>    ``(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;</DELETED>
                <DELETED>    ``(B) such person fully cooperated with 
                any Government investigation of such violation; 
                and</DELETED>
                <DELETED>    ``(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,</DELETED>
        <DELETED>the court may assess not less than 2 times the amount 
        of damages which the Government sustains because of the act of 
        that person.</DELETED>
        <DELETED>    ``(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.'';</DELETED>
        <DELETED>    (2) by striking subsections (b) and (c) and 
        inserting the following:</DELETED>
<DELETED>    ``(b) Definitions.--For purposes of this section--
</DELETED>
        <DELETED>    ``(1) the terms `knowing' and `knowingly' mean 
        that a person, with respect to information--</DELETED>
                <DELETED>    ``(A) has actual knowledge of the 
                information;</DELETED>
                <DELETED>    ``(B) acts in deliberate ignorance of the 
                truth or falsity of the information; or</DELETED>
                <DELETED>    ``(C) acts in reckless disregard of the 
                truth or falsity of the information, and no proof of 
                specific intent to defraud is required;</DELETED>
        <DELETED>    ``(2) the term `claim'--</DELETED>
                <DELETED>    ``(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--</DELETED>
                        <DELETED>    ``(i) is presented to an officer, 
                        employee, or agent of the United States; 
                        or</DELETED>
                        <DELETED>    ``(ii) is made to a contractor, 
                        grantee, or other recipient if the United 
                        States Government--</DELETED>
                                <DELETED>    ``(I) provides or has 
                                provided any portion of the money or 
                                property requested or demanded; 
                                or</DELETED>
                                <DELETED>    ``(II) will reimburse such 
                                contractor, grantee, or other recipient 
                                for any portion of the money or 
                                property which is requested or 
                                demanded; and</DELETED>
                <DELETED>    ``(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</DELETED>
        <DELETED>    ``(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.'';</DELETED>
        <DELETED>    (3) by redesignating subsections (d) and (e) as 
        subsections (c) and (d), respectively; and</DELETED>
        <DELETED>    (4) in subsection (c), as redesignated, by 
        striking ``subparagraphs (A) through (C) of subsection (a)'' 
        and inserting ``subsection (a)(2)''.</DELETED>

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 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 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.--
            (1) Money laundering.--Section 1956(c) of title 18, United 
        States Code, is amended--
                    (A) in paragraph (8), by striking the period and 
                inserting ``; and''; and
                    (B) by inserting at the end the following:
            ``(9) the term `proceeds' means any property derived from 
        or obtained or retained, directly or indirectly, through some 
        form of unlawful activity, including the gross receipts of such 
        activity.''.
            (2) Monetary transactions.--Section 1957(f) of title 18, 
        United States Code, is amended by striking paragraph (3) and 
        inserting the following:
            ``(3) the terms `specified unlawful activity' and 
        `proceeds' shall have the meaning given those terms in section 
        1956 of this title.''.
    (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, 
        $165,000,000 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: $75,000,000 
                for fiscal year 2010 and $65,000,000 for fiscal year 
                2011.
                    (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 
Department of Housing and Urban Development.--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) Additional Appropriations for the United States Secret 
Service.--There is authorized to be appropriated to the United States 
Secret Service of the Department of Homeland Security, $20,000,000 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.
    (e) Use of Funds.--The funds authorized to be appropriated under 
subsections (a), (b), (c), and (d) 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
    (f) Report to Congress.--Following the final expenditure of all 
funds appropriated under this section that were authorized by 
subsections (a), (b), (c), and (d) the Attorney General, in 
consultation with the United States Postal Inspection Service, the 
Inspector General for the Department of Housing and Urban Development, 
and the Secretary of Homeland Security, shall submit a joint report to 
Congress identifying--
            (1) the amounts expended under subsections (a), (b), (c), 
        and (d) and a certification of compliance with the requirements 
        listed in subsection (e); 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 material to a 
                false or fraudulent claim;
                    ``(C) conspires to commit a violation of 
                subparagraph (A), (B), (D), (E), (F), or (G);
                    ``(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 material to an 
                obligation to pay or transmit money or property to the 
                Government, or knowingly conceals or knowingly and 
                improperly 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'--
                    ``(A) mean that a person, with respect to 
                information--
                            ``(i) has actual knowledge of the 
                        information;
                            ``(ii) acts in deliberate ignorance of the 
                        truth or falsity of the information; or
                            ``(iii) acts in reckless disregard of the 
                        truth or falsity of the information; and
                    ``(B) require no proof of specific intent to 
                defraud;
            ``(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 money or property is to 
                        be spent or used on the Government's behalf or 
                        to advance a Government program or interest, 
                        and 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;
            ``(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, 
        statutory, fee-based, or similar relationship, and the 
        retention of any overpayment; and
            ``(4) the term `material' means having a natural tendency 
        to influence, or be capable of influencing, the payment or 
        receipt of money or property.'';
            (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)''.
    (b) Effective Date and Application.--The amendments made by this 
section shall take effect on the date of enactment of this Act and 
shall apply to conduct on or after the date of enactment, except that 
subparagraph (B) of section 3729(a)(1) of title 31, United States Code, 
as added by subsection (a)(1), shall take effect as if enacted on June 
7, 2008, and apply to all claims under the False Claims Act (31 U.S.C. 
3729 et seq.) that are pending on or after that date.
                                                        Calendar No. 28

111th CONGRESS

  1st Session

                                 S. 386

_______________________________________________________________________

                                 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.

_______________________________________________________________________

                             March 5, 2009

                       Reported with an amendment