[Congressional Record Volume 140, Number 30 (Thursday, March 17, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 17, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
               STRONG EFFORTS NEEDED TO COMBAT MAIL FRAUD

  (Miss COLLINS of Michigan asked and was given permission to address 
the House for 1 minute and to revise and extend her remarks.)
  Miss COLLINS of Michigan. Mr. Speaker, the FBI has estimated that 
mail and telemarketing fraud costs the American consumer up to $40 
billion per year. Every year millions of consumers are victimized by 
fraud or deception through the U.S. mail system. Con artists typically 
play on the fears or dreams of the public by promoting products that 
will, for example, improve one's health or promise instant credit 
cards. A recent study commissioned by the National Consumers League, 
showed that more than 92 percent of adult Americans have received 
postcards announcing that they are grand winners in a contest that 
usually proves deceptive.
  Congress must take the lead in getting serious about mail fraud and 
put in place solid enforcement tools to prevent it and protect 
consumers. Today, I am introducing three bills to combat mail fraud.


                      civil investigative demands

  The first bill would authorize the U.S. Postal Service to issue 
subpoenas for the production of documents relevant to the investigation 
of mail fraud. With this tool the U.S. Postal Service could gain access 
to documents that substantiate or do not substantiate a particular 
product's claim, such as the claim that a particular dietary product 
will boost energy or grow hair.
  Currently, the Postal Service has no subpoena authority under its 
civil mail fraud statute which, in some cases, prevents or delays their 
investigations. This authority could be used, for example, to obtain 
copies of bank agreements for credit cards, obtain copies of scientific 
studies validating diet claims, obtain copies of financial reports for 
charities, require sweepstakes to identify the prizes, and identify 
assets of fraudulent promoters for forfeiture.


                         mail fraud forfeitures

  The second bill I am introducing has a two-fold purpose. First, it 
would authorize the seizure and forfeiture of property constituting or 
derived from proceeds of mail or wire fraud violations. Second, it 
would enable and require the Postal Service to place in the Postal 
Service the proceeds of all forfeitures which result from its mail 
fraud investigations.
  Currently, forfeiture is authorized in these types of cases only if 
the defendant is also violating the money laundering statutes which are 
complex and time consuming.
  Under the Postal Reorganization Act, the operations of the Postal 
Service are funded by postal revenues rather than appropriated funds. 
Currently, the law only allows the Postal Service to deposit proceeds 
from civil forfeitures, conducted by them, in its fund. The proposed 
legislation would also allow and require the Postal Service to deposit 
in its Postal Service Fund, proceeds from criminal forfeitures, 
investigated and conducted by the Postal Service. These proceeds are 
presently deposited into a Department of Justice fund.
  Without my bill, the costs incurred by the Postal Service in 
investigating offenses which result in forfeitures is recovered by 
diverting already limited postal revenue.
  In addition, the bill would provide specific authority for the Postal 
Service to share the proceeds it receives from forfeitures with State 
or Federal law enforcement agencies that have provided assistance in 
the investigation which resulted in the forfeiture. Asset sharing among 
cooperating law enforcement agencies is a common practice, it 
encourages cooperation and leverages resources among law enforcement 
agencies.


          inclusion of private carriers in mail fraud statute

  The third bill would expand the provisions of the mail fraud statute 
to include private carriers. The U.S. postal inspectors recently 
testified that fraudulent promoters were circumventing the mail fraud 
statute by using the services of private carriers like Federal Express 
or UPS instead of the U.S. mail to avoid prosecution under the mail 
fraud statute. This creates a double standard and puts the U.S. Postal 
Service at a disadvantage.
  My bill would simply extend current prohibitions against mail fraud 
to include fraudulent material sent by private interstate carriers.
  As chairwomen of the Subcommittee on Postal Operations and Services, 
I have held several hearings on mail fraud and believe that these 
measures will greatly deter many problems that have been given 
inadequate attention for too long. In addition these initiatives could 
be instrumental in saving consumers billions of dollars.
  Mr. Speaker, the time is now to respond to the call by our 
constituents for help and we can begin by ensuring that those agencies 
responsible for law enforcement have the necessary tools to rid the 
marketplace of questionable products and dubious schemes.

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