[Congressional Record Volume 143, Number 158 (Monday, November 10, 1997)]
[Senate]
[Pages S12484-S12487]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
WIRELESS TELEPHONE PROTECTION ACT
Mr. LOTT. Mr. President, I ask unanimous consent that the Senate now
proceed to the consideration of Calendar No. 167, which is S. 493.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
A bill (S. 493) to amend section 1029 of title 18, United
States Code, with respect to cellular telephone cloning
paraphernalia.
[[Page S12485]]
The PRESIDING OFFICER. Is there objection to the immediate
consideration of the bill?
There being no objection, the Senate proceeded to consider the
bill, which had been reported from the Committee on the Judiciary, with
an amendment to strike all after the enacting clause and inserting in
lieu thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Wireless Telephone
Protection Act''.
SEC. 2. FRAUD AND RELATED ACTIVITY IN CONNECTION WITH
COUNTERFEIT ACCESS DEVICES.
(a) Unlawful Acts.--Section 1029(a) of title 18, United
States Code, is amended--
(1) by redesignating paragraph (9) as paragraph (10); and
(2) by striking paragraph (8) and inserting the following:
``(8) knowingly and with intent to defraud uses, produces,
traffics in, has control or custody of, or possesses a
scanning receiver;
``(9) knowingly uses, produces, traffics in, has control or
custody of, or possesses hardware or software, knowing it has
been configured for altering or modifying a
telecommunications instrument so that such instrument may be
used to obtain unauthorized access to telecommunications
services; or''.
(b) Penalties.--
(1) Generally.--Section 1029(c) of title 18, United States
Code, is amended to read as follows:
``(c) Penalties.--The punishment for an offense under
subsection (a) section is--
``(1) in the case of an offense that does not occur after a
conviction for another offense under this section that has
become final and that was committed on a separate prior
occasion.
``(A) if the offense is under paragraph (2), (3), (6), (7),
or (10) of subsection (a), a fine under this title or
imprisonment for not more than 10 years, or both; and
``(B) if the offense is under paragraph (1), (4), (5), (8),
or (9), of subsection (a), a fine under this title or
imprisonment for not more than 15 years, or both; and
``(2) in the case of an offense that occurs after a
conviction for another offense under this section, that has
become final and that was committed on a separate prior
occasion, that has a fine under this title or imprisonment
for not more than 20 years, or both.''.
(2) Attempts.--Section 1029(b)(1) of title 18, United
States Code, is amended by striking ``punished as provided in
subsection (c) of this section'' and inserting ``subject to
the same penalties as those prescribed for the offense
attempted''.
(c) Definition of Scanning Receiver.--Section 1029(e) of
title 18, United States Code, is amended--
(1) in paragraph (6), by striking ``and'' at the end;
(2) in paragraph (7)--
(A) by striking ``The'' and inserting ``the''; and
(B) by striking the period at the end and inserting a
semicolon; and
(3) in paragraph (8), by striking the period at the end and
inserting ``or to intercept an electronic serial number,
mobile identification number, or other identifier of any
telecommunications service, equipment, or instrument; and''.
(d) Applicability of New Section 1029(a)(9).--
(1) In general.--Section 1029 of title 18, United States
Code, is amended by adding at the end the following:
``(g) It is not a violation of subsection (a)(9) for an
officer, employee, or agent of, or a person under contract
with, a facilities-based carrier, for the purpose of
protecting the property or legal rights of that carrier, to
use, produce, have custody or control of, or possess hardware
or software configured as described in that subsection
(a)(9).''.
(2) Definition of facilities-based carrier.--Section
1029(e) of title 18, United States Code, as amended by
subsection (c) of this section, is amended by adding at the
end the following:
``(9) the term `facilities-based carrier' means an entity
that owns communications transmission facilities, is
responsible for the operation and maintenance of those
facilities, and holds an operating license issued by the
Federal Communications Commission under the authority of
title III of the Communications Act of 1934.''.
(e) Amendment of Federal Sentencing Guidelines for Wireless
Telephone Cloning.--
(1) In general.--Pursuant to its authority under section
994 of title 28, United States Code, the United States
Sentencing Commission shall review and amend the Federal
sentencing guidelines and the policy statements of the
Commission, if appropriate, to provide an appropriate penalty
for offenses involving the cloning of wireless telephones
(including offenses involving an attempt or conspiracy to
clone a wireless telephone).
(2) Factors for consideration.--In carrying out this
section, the Commission shall consider, with respect to the
offenses described in paragraph (1)--
(A) the range of conduct covered by the offenses;
(B) the existing sentence for the offenses;
(C) the extent to which the value of the loss caused by the
offenses (as defined in the Federal sentencing guidelines) is
an adequate measure for establishing penalties under the
Federal sentencing guidelines;
(D) the extent to which sentencing enhancements within the
Federal sentencing guidelines and the court's authority to
impose a sentence in excess of the applicable guideline range
are adequate to ensure punishment at or near the maximum
penalty for the most egregious conduct covered by the
offenses;
(E) the extent to which the Federal sentencing guideline
sentences for the offenses have been constrained by statutory
maximum penalties;
(F) the extent to which Federal sentencing guildlines for
the offenses adequately achieve the purposes of sentencing
set forth in section 3553(a)(2) of title 18, United States
Code;
(G) the relationship of Federal sentencing guidelines for
the offenses to the Federal sentencing guidelines for other
offenses of comparable seriousness; and
(H) any other factor that the Commission considereds to be
appropriate.
Amendment No. 1634
(Purpose: To make an amendment relating to forfeiture to the United
States of any real or personal property used or intended to be used to
commit, facilitate, or promote the commission of certain offense.)
Mr. LOTT. Senator Hatch has an amendment at the desk. I ask for its
consideration.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from Mississippi [Mr. Lott], for Mr. Hatch,
proposes an amendment numbered 1634.
The amendment is as follows:
On page 6, line 1, strike ``The punishment'' and insert the
following:
``(1) In general.--The punishment''.
On page 6, line 2, strike ``section''.
On page 6, line 3, strike ``(1)'' and insert ``(A)'' and
indent accordingly.
On page 6, line 7, strike ``(A)'' and insert ``(i)'' and
indent accordingly.
On page 6, line 11, strike ``(B)'' and insert ``(ii)'' and
indent accordingly.
On page 6, line 14, strike ``and''.
On page 6, line 15, strike ``(2)'' and insert ``(B)'' and
indent accordingly.
On page 6, line 19, strike the punctuation at the end and
insert ``; and''.
On page 6, between lines 19 and 20, insert the following:
``(C) in any case, in addition to any other punishment
imposed or any other forfeiture required by law, forfeiture
to the United States of any personal property used or
intended to be used to commit, facilitate, or promote the
commission of the offense.
``(2) Applicable Procedure.--The criminal forfeiture of
personal property subject to forfeiture under paragraph
(1)(C), any seizure and disposition thereof, and any
administrative or judicial proceeding in relation thereto,
shall be governed by subsections (c) and (e) through (p) of
section 413 of the Controlled Substances Act (21 U.S.C.
853).''.
Mr. HATCH. Mr. President, I rise to urge my colleagues to support S.
493, the Wireless Telephone Protection Act. This important bill will
close a glaring gap in the protection afforded by federal law to
cellular telephone communications.
Law enforcement is alarmed by the increasingly prevalent practice of
``cloning'' cellular phones. Essentially, criminals operating scanners
from the roadside or from buildings near urban freeways, copy
identifying numbers for cellular phones. Using the data they obtain,
these criminals alter other phones to access the accounts tied to the
phone whose data was scanned, thus creating so-called ``clone phones''.
They then either sell these phones, or use the clone phones themselves
for criminal purposes. These phones are used for several weeks or
months, until the legitimate customer notices the fraud when he or she
gets the bill for phone service accessed by the clone phone.
The effects of these criminal schemes are twofold. First, this crime
steals cellular service from the phone companies, which typically
credit legitimate customers' accounts when alerted to the fraud.
Second, the use of clone phones masks other criminal conduct by making
criminal's calls difficult, if not impossible, to trace. S. 493,
sponsored by Senator Kyl, helps close this gap in the law by making it
a federal crime to own or use the software or hardware needed to clone
cell phones.
I also urge my colleagues to support an amendment to this bill, to
ensure the confiscation of the equipment used to violate this law, and
commit other frauds related to access devices. Presently, persons
convicted of committing access device fraud under section 1029 of title
18 forfeit to the government the proceeds of their crime. However,
there is no provision ensuring that the computers, hardware, software,
and other equipment used to commit the crime is forfeited, as well. My
amendment to this bill corrects this.
My amendment includes in the penalties for a violation of 18 U.S.C.
1029, the forfeiture of any personal property
[[Page S12486]]
used to commit, facilitate, or promote the commission of the violation.
I note for my colleagues that my amendment only addresses criminal
forfeiture, so there must be a conviction for the assets to be seized.
Second, my amendment only permits the forfeiture of personal property
used to commit the offense--mainly, equipment. Houses, other buildings,
or land could not be subject to forfeiture under this provision.
Mr. President, it is important that we close the gaps in the law that
permit criminals to brazenly sell and use equipment to steal cellular
phone service and evade law enforcement. It is equally important to get
this equipment off the streets. I urge my colleagues to support my
amendment and the underlying bill.
Mr. LOTT. I ask consent that the amendment be considered as read and
agreed to.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment (No. 1634) was agreed to.
Amendment No. 1635
(Purpose: To make technical amendments)
Mr. LOTT. I understand Senator Kyl has an amendment at the desk. I
ask for its consideration.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from Mississippi [Mr. Lott], for Mr. Kyl,
proposes an amendment numbered 1635.
The amendment is as follows:
On page 6, line 5, strike ``that has become final and that
was committed on a separate prior occasion,'' and inert ``,
which conviction has become final--''.
On page 6, line 7, strike ``(2),''.
On page 6, line 11, strike ``(1),'' and insert ``(1),
(2),''.
On page 6, beginning on line 16, strike ``that has become
final and that was committed on a separate prior occasion,
that has'' and insert ``which conviction has become final,''.
On page 7, line 24, after ``subsection (a)(9)'' insert ``,
provided that if such hardware or software is used to obtain
access to telecommunications service provided by another
facilities-based carrier, such access is authorized''.
Mr. LOTT. I ask unanimous consent the amendment be considered as read
and agreed to.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment (No. 1635) was agreed to.
Mr. LOTT. I ask unanimous consent the committee amendment, as
amended, be agreed to, the bill be considered read a third time and
passed as amended, the motion to reconsider be laid upon the table, and
that any statements relating to the bill be printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
The committee amendment, as amended, was agreed to.
The bill (S. 493), as amended, was considered read the third time and
passed, as follows:
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
S. 493
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Wireless Telephone
Protection Act''.
SEC. 2. FRAUD AND RELATED ACTIVITY IN CONNECTION WITH
COUNTERFEIT ACCESS DEVICES.
(a) Unlawful Acts.--Section 1029(a) of title 18, United
States Code, is amended--
(1) by redesignating paragraph (9) as paragraph (10); and
(2) by striking paragraph (8) and inserting the following:
``(8) knowingly and with intent to defraud uses, produces,
traffics in, has control or custody of, or possesses a
scanning receiver;
``(9) knowingly uses, produces, traffics in, has control or
custody of, or possesses hardware or software, knowing it has
been configured for altering or modifying a
telecommunications instrument so that such instrument may be
used to obtain unauthorized access to telecommunications
services; or''.
(b) Penalties.--
(1) Generally.--Section 1029(c) of title 18, United States
Code, is amended to read as follows:
``(c) Penalties.--(1) In general.--The punishment for an
offense under subsection (a) is--
``(A) in the case of an offense that does not occur after a
conviction for another offense under this section, which
conviction has become final--
``(i) if the offense is under paragraph (3), (6), (7), or
(10) of subsection (a), a fine under this title or
imprisonment for not more than 10 years, or both; and
``(ii) if the offense is under paragraph (1), (2), (4),
(5), (8), or (9), of subsection (a), a fine under this title
or imprisonment for not more than 15 years, or both;
``(B) in the case of an offense that occurs after a
conviction for another offense under this section, which
conviction has become final, a fine under this title or
imprisonment for not more than 20 years, or both; and
``(C) in any case, in addition to any other punishment
imposed or any other forfeiture required by law, forfeiture
to the United States of any personal property used or
intended to be used to commit, facilitate, or promote the
commission of the offense.
``(2) Applicable Procedure.--The criminal forfeiture of
personal property subject to forfeiture under paragraph
(1)(C), any seizure and disposition thereof, and any
administrative or judicial proceeding in relation thereto,
shall be governed by subsections (c) and (e) through (p) of
section 413 of the Controlled Substances Act (21 U.S.C.
853).''.
(2) Attempts.--Section 1029(b)(1) of title 18, United
States Code, is amended by striking ``punished as provided in
subsection (c) of this section'' and inserting ``subject to
the same penalties as those prescribed for the offense
attempted''.
(c) Definition of Scanning Receiver.--Section 1029(e) of
title 18, United States Code, is amended--
(1) in paragraph (6), by striking ``and'' at the end;
(2) in paragraph (7)--
(A) by striking ``The'' and inserting ``the''; and
(B) by striking the period at the end and inserting a
semicolon; and
(3) in paragraph (8), by striking the period at the end and
inserting ``or to intercept an electronic serial number,
mobile identification number, or other identifier of any
telecommunications service, equipment, or instrument; and''.
(d) Applicability of New Section 1029(a)(9).--
(1) In general.--Section 1029 of title 18, United States
Code, is amended by adding at the end the following:
``(g) It is not a violation of subsection (a)(9) for an
officer, employee, or agent of, or a person under contract
with, a facilities-based carrier, for the purpose of
protecting the property or legal rights of that carrier, to
use, produce, have custody or control of, or possess hardware
or software configured as described in that subsection
(a)(9): Provided, That if such hardware or software is used
to obtain access to telecommunications service provided by
another facilities-based carrier, such access is
authorized.''.
(2) Definition of facilities-based carrier.--Section
1029(e) of title 18, United States Code, as amended by
subsection (c) of this section, is amended by adding at the
end the following:
``(9) the term `facilities-based carrier' means an entity
that owns communications transmission facilities, is
responsible for the operation and maintenance of those
facilities, and holds an operating license issued by the
Federal Communications Commission under the authority of
title III of the Communications Act of 1934.''.
(e) Amendment of Federal Sentencing Guidelines for Wireless
Telephone Cloning.--
(1) In general.--Pursuant to its authority under section
994 of title 28, United States Code, the United States
Sentencing Commission shall review and amend the Federal
sentencing guidelines and the policy statements of the
Commission, if appropriate, to provide an appropriate penalty
for offenses involving the cloning of wireless telephones
(including offenses involving an attempt or conspiracy to
clone a wireless telephone).
(2) Factors for consideration.--In carrying out this
subsection, the Commission shall consider, with respect to
the offenses described in paragraph (1)--
(A) the range of conduct covered by the offenses;
(B) the existing sentences for the offenses;
(C) the extent to which the value of the loss caused by the
offenses (as defined in the Federal sentencing guidelines) is
an adequate measure for establishing penalties under the
Federal sentencing guidelines;
(D) the extent to which sentencing enhancements within the
Federal sentencing guidelines and the court's authority to
impose a sentence in excess of the applicable guideline range
are adequate to ensure punishment at or near the maximum
penalty for the most egregious conduct covered by the
offenses;
(E) the extent to which the Federal sentencing guideline
sentences for the offenses have been constrained by statutory
maximum penalties;
(F) the extent to which Federal sentencing guidelines for
the offenses adequately achieve the purposes of sentencing
set forth in section 3553(a)(2) of title 18, United States
Code;
(G) the relationship of Federal sentencing guidelines for
the offenses to the Federal sentencing guidelines for other
offenses of comparable seriousness; and
(H) any other factors that the Commission considers to be
appropriate.
Mr. KYL. Mr. President, I am gratified that S. 493, the Cellular
Telephone Protection Act, which would make it easier for Federal law
enforcement to stop cell phone cloning, has unanimously been approved
by the Senate. I expect that the bill will soon pass the House of
Representatives, and be
[[Page S12487]]
signed into law by the President. S. 493 is the first in a series of
anticrime initiatives I introduced that are aimed at modernizing U.S.
law to reflect changes in technology.
It is estimated that the cellular telecommunications industry lost
$650 million due to fraud in 1995, much of it as a result of cloning.
Cloned phones are popular among the most vicious criminal element. The
feature story from the July/August edition of Time Digital, ``Lethal
Weapon: How Your Cell Phone Became Gangland's Favorite Gadget'' quotes
James Kallstrom, head of the FBI's New York office as describing
cloners as ``hard-core criminals, child pornographers and pedophiles *
* * violent criminals who use technology to avoid the law.''
On September 11, Representative Bill McCollum, chairman of the House
Judiciary Crime Subcommittee, held a very useful hearing on cellular
phone cloning. The hearing discussed legislative proposals to combat
cellular phone fraud. Representatives of the Secret Service, FBI, and
DEA all testified that legislation resembling S. 493 would be helpful
in thwarting cell phone cloning.
The hearing revealed that cloned phones have become a staple of the
major drug trafficking organizations. Anthony R. Bocchichio, of the DEA
stated that, ``[International drug trafficking organizations] utilize
their virtually unlimited wealth to purchase the most sophisticated
electronic equipment available on the market to facilitate their
illegal activities. We have begun to see that this includes widespread
use of cloned cellular telephones.''
The Secret Service--the Federal agency charged with investigating
cloning offenses--has doubled the number of arrests in the area of
wireless telecommunications fraud every year since 1991, with 800
individuals charged for their part in the cloning of cellular phones
last year. While the cell phone law (18 U.S.C. 1029) has been useful in
prosecuting some cloners, the statute has not functioned well in
stopping those who manufacture and distribute cloning devices.
In testimony before Mr. McCollum's Crime Subcommittee, Michael C.
Stenger of the U.S. Secret Service stressed the need to revise our
current cell phone statute:
Due to the fact that the statute presently requires the
proof of ``intent to defraud'' to charge the violation, the
distributors of the cloning equipment have become elusive
targets. These distributors utilize disclaimers in their
advertising mechanisms aimed at avoiding a finding of
fraudulent intent. This allows for the continued distribution
of the equipment permitting all elements of the criminal
arena to equip themselves with free, anonymous phone service.
Consistent with Mr. Stenger's recommendation, the Cellular Telephone
Protection Act provides that--except for law enforcement and
telecommunications carriers--there is no lawful purpose for which to
possess, produce, or sell the ``copycat boxes'' for cloning a wireless
telephone or its electronic serial number.
For S. 493 to apply, a prosecutor would need to prove that an
individual ``knowingly uses, produces, traffics in, has control or
custody of, or possesses hardware or software, knowing it has been
configured for altering or modifying a telecommunications instrument so
that such instrument may be used to obtain unauthorized access to
telecommunications services.'' Someone who does not know that a
telecommunications device has been altered to modify a
telecommunications instrument would not be criminally liable under this
section.
To be clear, except for law enforcement and telecommunication
carriers, there is no legitimate purpose for which to possess equipment
used to modify cellular phones. Representatives from the Secret
Service, DEA, and FBI testified to this point at the cellular fraud
hearing. As Special Agent Stenger put it, ``There is no legitimate use
for the equipment such as that designed to alter the electronic serial
numbers in wireless telephones.''
The removal of the ``intent to defraud'' language in 18 U.S.C. 1029
only applies to the possession and use of the hardware and software
configured to alter telecommunications instruments. This narrowly
targeted proposal does not apply to those who are in the possession of
cloned phones. Nor does it apply to those in the possession of scanning
receivers, which do have some legitimate uses.
The Senate bill enjoys broad bipartisan support. Senators Cleland,
DeWine, Dorgan, Durbin, Gorton, Helms, Lott, Mikulski, and Thurmond
have cosponsored S. 493. And a bipartisan House companion bill (H.R.
2460) has been introduced by Representatives Sam Johnson, Bill
McCollum, and Charles Schumer.
I am hopeful that my colleagues will join in supporting this
important piece of legislation.
____________________