[Congressional Record Volume 142, Number 134 (Wednesday, September 25, 1996)]
[House]
[Pages H11129-H11130]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       TELEMARKETING FRAUD PUNISHMENT AND PREVENTION ACT OF 1996

  Mr. McCOLLUM. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 1499) to improve the criminal law relating to fraud against 
consumers, as amended.
  The Clerk read as follows:

                               H.R. 1499

       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 ``Telemarketing Fraud 
     Punishment and Prevention Act of 1996''.

     SEC. 2. FORFEITURE OF FRAUD PROCEEDS.

       Section 982(a) of title 18, United States Code, is amended 
     by adding at the end the following:
       ``(6) The Court, in sentencing a defendant for an offense 
     under section 2326, shall order that the defendant forfeit to 
     the United States any real or personal property--
       ``(A) used or intended to be used to commit or to promote 
     the commission of such offense, if the court in its 
     discretion so determines, taking into consideration the 
     nature, scope, and proportionality of the use of the property 
     in the offense; and
       ``(B) constituting, derived from, or traceable to the gross 
     receipts that the defendant obtained directly or indirectly 
     as a result of the offense,''.

     SEC. 3. SENTENCING GUIDELINES CHANGES.

       Pursuant to its authority under section 994(p) of title 28, 
     United States Code, the United States Sentencing Commission 
     shall review and amend the sentencing guidelines to provide a 
     sentencing enhancement for any offense listed in section 2326 
     of title 18, United States Code--
       (1) by at least 4 levels if the circumstances authorizing 
     an additional term of imprisonment under section 2326(1) are 
     present; and
       (2) by at least 8 levels if the circumstances authorizing 
     an additional term of imprisonment under section 2326(2) are 
     present.

     SEC. 4. INCREASED PUNISHMENT FOR USE OF FOREIGN LOCATION TO 
                   EVADE PROSECUTION.

       Pursuant to its authority under section 994(p) of title 28, 
     United States Code, the United States Sentencing Commission 
     shall amend the sentencing guidelines to increase the offense 
     level for any fraud offense by at least 2 levels if the 
     defendant conducted activities to further the fraud from a 
     foreign country.

     SEC. 5. CLARIFICATION OF ENHANCEMENT OF PENALTIES.

       Section 2327(a) of title 18, United States Code, is amended 
     by striking ``under this chapter'' and inserting ``for which 
     an enhanced penalty is provided under section 2326 of this 
     title''.

     SEC. 6. ADDITION OF CONSPIRACY OFFENSES TO SECTION 2326 
                   ENHANCEMENT.

       Section 2326 of title 18, United States Code, is amended by 
     inserting ``, or a conspiracy to commit such an offense,'' 
     after ``or 1344''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Florida [Mr. McCollum] and the gentlewoman from California [Ms. 
Lofgren] each will control 20 minutes.
  The Chair recognizes the gentleman from Florida [Mr. McCollum].


                             general leave

  Mr. McCOLLUM. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Florida?
  There was no objection.
  Mr. McCOLLUM. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, older Americans have rapidly become the preferred 
targets of fraudulent telemarketers. Some of them are lonely, and 
appreciate having someone to talk to during the day. Many of them are 
just trusting, and they simply cannot tell a legitimate telephone sales 
pitch from an illegitimate one.
  These elderly victims are tricked into giving money to phony 
charities, applying for bogus credit cards or paying for unnecessary 
repairs for their homes. Worst of all, many of them are further scammed 
when they receive phone calls from people claiming to be private 
investigators or attorneys who want to help them get their lost money 
back. Organizers of these so-called ``recovery-room scams'' convince 
the elderly person that almost all of the already spent money can be 
recovered--this is, provided that a few thousands dollars are mailed up 
front first. The cost to consumers for these and other reprehensible 
telemarketing schemes is currently estimated to be about $40 billion a 
year.
  This past April, the Subcommittee on Crime, which I Chair, held a 
hearing on telemarketing fraud and victimization of the elderly. 
Subcommittee members heard from an elderly woman who was swindled by 
crooked telemarketers, and lost nearly $75,000--practically hear life's 
savings. Mr. Speaker, this woman was asked at the hearing why she let 
the phone calls go on for so long. Why didn't she tell her family that 
she was being targeted? This poor woman responded that she was too 
ashamed and embarrassed to tell her children. She had lost all the 
money that she and her late husband had so carefully saved, and she was 
too humiliated to admit it to anyone. Tragically, that woman's story is 
not an uncommon one.
  Embarrassment is a weapon for these telefrauds, and they freely 
exploit it. Some even threaten their older victims that control over 
their credit cards and bank accounts will be taken away from them by 
their children if they tell anyone how they have lost their money. 
Humiliation, and the fear of losing of independence, keeps these 
elderly victims as easy prey for scam artists.
  In response to this heartless activity, Mr. Heineman introduced H.R. 
1499. Unfortunately he cannot be here with us today because he is at 
home in this district recovering from surgery, and I know we all wish 
him a speedy recovery.
  Chief Heineman's bill strikes back at those who would take advantage 
of trusting or vulnerable members of our society. The bill amends 
Sec. 982(a) of title 18, United States Code, by requiring a defendant 
convicted of fraud involving a telemarketing scam to forfeit property 
used in the commission of the offense or any proceeds received as a 
result of the offense. The bill also directs the U.S. Sentencing 
Commission to amend the sentencing guidelines to increase sentences for 
telemarketing fraud offenses as defined in section 2326 of title 18, 
United States Code. The increase shall be at least 4 levels for general 
telemarketing fraud, and at least 8 levels if the defendant is found to 
have targeted persons over the age of 55.

  Under current law, telemarketers are supposed to be getting up to 10 
years in prison for seeking out and victimizing persons over the age of 
55. But the sentencing guidelines have never been amended regarding 
telemarketing fraud, even though Congress encouraged the Commission to 
do so in 1994. Crooked telemarketers are spending an average of only 1 
year in jail. It is undeniable that criminal telemarketers are getting 
off easy, and this bill will ensure that their sentences are more than 
doubled.
  The bill also adds conspiracy language to section 2336. This addition 
allows Federal prosecutors to seek out the masterminds behind the 
boiler rooms--the places where the telemarketers conduct their illegal 
activities. This conspiracy language will aid prosecutors by allowing 
them to go after the organizers of these fraudulent activities. This 
provision was added at the behest of the Department of Justice.
  Finally, this bill makes a small, technical clarification to section 
2337(a) of title 18. Currently, section 2337 directs the court to order 
restitution for any offense under this chapter. The bill makes it clear 
that section 2336 of the telemarketing fraud chapter of title 18 is 
merely a penalty enhancement section, and not a new Federal offense. 
The Department of Justice was concerned about this ambiguity, so this 
language makes clear that there is no new offense under chapter 113A.
  Mr. Speaker, I would like to commend my good friend from North 
Carolina, Mr. Heineman, for his commitment to this issue, and his 
efforts to combat this serious problem. He introduced H.R. 1499 more 
than a year ago,

[[Page H11130]]

and his dedication to protecting the elderly who are being preyed upon 
by greedy, heartless crooks is truly admirable. I am very sorry that he 
is unable to be here to see the fruits of all his efforts, and I urge 
my colleagues to support the bill.
  Ms. LOFGREN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of the bill. This bill strikes at one 
of the most cynical crimes in America, fraud against older Americans. 
The unscrupulous crooks who run the schemes that this bill aims at has 
stolen the life savings of scores of honest, hard-working older 
Americans. They have driven thousands of others deep into debt. These 
con artists have turned years that ought to be spent in well-earned 
hours of enjoyment into hellish nightmares. Unfortunately, many of 
these schemes operate not only across State lines, but even across 
international boundaries. Often only the Federal Government has the 
resources and the jurisdictions to stop a given fraud scheme and punish 
its perpetrators.
  This bill gives the Federal Government a few additional tools to go 
after those who prey on our parents, grandparents and other older 
Americans. It allows for criminal forfeiture of property used in such 
schemes, enhances penalties in cases of telemarketing fraud aimed at 
persons over 55 years of age, and directs the Sentencing Commission to 
increase sentencing in cases where criminals operate from foreign 
countries to evade prosecution.
  Mr. Speaker, this is a modest bill, but an important bipartisan blow 
against crime. I congratulate the chairman for working with us on this 
measure, and I urge my colleagues to vote for it.
  Mr. Speaker, I yield such time as she may consume to the gentlewoman 
from Texas [Ms. Jackson-Lee], a distinguished member of the committee.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I wanted to add to the impact 
of this legislation as I rise to support H.R. 1499. Not only does it 
respond to the humiliation that occurs through our senior citizens in 
their sunset years of which they may be active in community life, but 
yet somewhat intimidated by those who might prey upon them through 
telephone fraud. It also impacts the mentally retarded or physically or 
mentally challenged and other vulnerable consumers.
  If there is anything that we hear as we travel about our districts, 
it is some of the tragic stories that occur from some of the overly 
aggressive telemarketing efforts to prey upon those individuals that 
will be easily vulnerable to say a quick ``yes,'' and I think that this 
legislation helps give a minimal amount of support to those individuals 
who might clearly have lost their way, well-intended, wanting to be 
kind, generous in spirit, and yet being preyed upon by those with 
sinister ideas.
  I do not want to see any more of our citizens and their life savings, 
those individuals who are mentally regarded or mentally challenged and 
other vulnerable consumers fall prey to these kinds of devastating 
acts.
  So I rise to support this, and I ask my colleagues to support H.R. 
1499.

                              {time}  1915

  Ms. LOFGREN. I again urge passage of this bill. Mr. Speaker, I have 
no further requests for time, and I yield back the balance of my time.
  Mr. McCOLLUM. Mr. Speaker, I urge passage of the bill, and I yield 
back the balance of my time.
  The SPEAKER pro tempore (Mr. Dickey). The question is on the motion 
offered by the gentleman from Florida [Mr. McCollum] that the House 
suspend the rules and pass the bill, H.R. 1499, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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