[Congressional Record Volume 153, Number 43 (Tuesday, March 13, 2007)]
[Senate]
[Pages S3072-S3073]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SESSIONS. (for himself, Ms. Landrieu, Mr. Vitter, Mr. 
        Cornyn, and Mr. Grassley):
  S. 863. A bill to amend title 18, United States Code, with respect to 
fraud in connection with major disaster or emergency funds; to the 
Committee on the Judiciary.
  Mr. SESSIONS. Mr. President, I am pleased to introduce today the 
Emergency and Disaster Assistance Fraud Penalty Enhancement Act of 
2007. The bill creates a specific crime of fraud in connection with 
major disasters or emergency benefits and increases the penalties 
currently available for such acts. I am happy my good friends and 
colleagues, Senators Landrieu, Vitter, Cornyn, and Grassley have joined 
me in this important effort. I commend them for their leadership on 
this issue and look forward to working with them to pass this important 
piece of legislation.
  As a former Federal prosecutor myself for 12 years on the gulf coast 
of Alabama, and one who has been involved in prosecuting fraud in the 
aftermath of hurricanes, I can tell you that it goes on, unfortunately, 
and there are some weaknesses in our laws that we can fix.
  The ideas in my bill have received strong congressional support. In 
fact, the House of Representatives passed this same bill last Congress, 
H.R. 4356. Last March, the House Judiciary Committee approved the 
Emergency and Disaster Assistance Fraud Penalty Enhancement Act because 
both Democrats and Republicans wanted to move as quickly as possible 
against disaster assistance fraud. The committee submitted a report 
expressing its favor for the bill and recommended it be passed without 
amendment.
  Last June, the Department of Justice sent a letter to members of the 
Senate Judiciary Committee in strong support of the bill, noting that 
it would ``provide important prosecutorial tools in the government's 
efforts to combat fraud associated with natural disasters and other 
emergencies.''
  The goal of my bill is to protect the real victims of disasters such 
as Hurricane Katrina by specifically making it a crime, under the 
existing fraud chapter of title 18, USC chapter 47, to fraudulently 
obtain emergency disaster funds.
  After an emergency or disaster, such as the recent tornadoes that 
devastated the city of Enterprise in my home State, we should do 
everything we can to make sure 100 percent of the relief funds gets 
into the hands of real victims. Taxpayers should not sustain a 
financial loss at the hands of scam artists, and these wrongdoers 
should not profit from exploiting the victims of horrific events. 
Common sense requires that those who deceive the government and obtain 
emergency disaster funds by fraud be subject to criminal punishment.
  I want to share some thoughts about the scope of the problem. 
Hurricane Katrina produced one of the most extraordinary displays of 
loss, pain, and suffering, and of scams and schemes that we have ever 
seen. The scope of the fraud and the audacity of the schemers was 
astonishing.
  One of the most heinous examples is a woman who tried to collect 
Federal benefits by claiming she watched her two daughters drown in the 
rising New Orleans waters. In truth, she did not even have children and 
she was living in Illinois at the time of the hurricane. Her outrageous 
claims are an affront to the many people who actually did lose loved 
ones in that terrible storm.
  Another example of blatant and widespread fraud after Katrina 
include, in Texas, a hotel owner who submitted bills for phantom 
victims who never stayed at his hotel. Across the gulf coast, roughly 
1,100 prison inmates collected more than $10 million in rental and 
disaster relief assistance by claiming they were displaced by the 
storm. People in jail were being sent checks.
  You say: How can that happen? Well, they are trying to get money out 
to people in a hurry. I think they could do a better job, frankly. I 
think FEMA could do a better job in analyzing these claims. But the 
truth is, in the rush to make sure that people who have lost everything 
have money to find a room to stay in so they are not out on the 
streets, it does require them to take more risk than normally would be 
the case. People who take advantage of that to defraud the taxpayers 
and to rip off the system ought to go to jail for it.
  In California, a couple posed as Red Cross workers and fraudulently 
obtained donations, saying they were working for the Red Cross. Also, 
in California, 75 workers at a Red Cross call center were charged in a 
scheme to steal hundreds of thousands of dollars from the Red Cross. 
One individual received 26 Federal disaster relief payments by using 13 
different Social Security numbers. In my home State of Alabama, FEMA, 
the Federal Emergency Management Agency, paid $2,748 to an individual 
who listed a P.O. box as his damaged property.
  As of January 3, the Hurricane Katrina Fraud Task Force has charged 
525 individuals in 445 indictments brought in 35 judicial districts 
around the country. These numbers continue to grow every day. The 
Justice Department is aggressively prosecuting these

[[Page S3073]]

crooks, but they have asked us for this additional tool. They have 
asked us to pass this legislation so that the Federal statute 
adequately addresses and deters fraud in connection with emergency 
disaster assistance.
  The fact is, some people think in a disaster they can run in and make 
any kind of bogus claim they desire--that money will be given to them 
and people will be too busy to check. And if they do, nothing is ever 
going to happen to them. We need to completely reverse that mentality. 
We need to create a mindset on the part of everybody that these 
disaster relief funds are sacred; that they are for the benefit of 
people who have suffered loss, and only people who have suffered loss 
should gain benefit of it. We need to make it clear that those who 
steal that money are going to be prosecuted more vigorously and 
punished more severely than somebody who commits some other kind of 
crime because I think it is worse to steal from the generosity of the 
American people who intended to help those in need.
  The total price tag for the fraud committed after Hurricanes Katrina 
and Rita is not yet known, but the Government Accountability Office 
investigators have testified that it will, at the very least, be in the 
billions of dollars. I am not talking about millions. This is the GAO 
saying it will be, at the very least, in the billions of dollars.
  Now I have seen people, I have been down to Bayou La Batre and Coden 
and areas in my home area of Alabama who were devastated by this storm, 
and it is heartbreaking to see people who have lost everything. The day 
after the storm, my wife and I were there. The Salvation Army showed up 
and it was the only group there providing meals. There was a long line, 
and we walked down the line and just talked to the people about what 
had happened to them. Repeatedly, we were told:

       Senator, all I have is what is on my back.

  Now we want to help people like that, but we don't want to help 
people who are somewhere unaffected in Illinois or somewhere in jail 
claiming they deserve displaced housing money.
  So it is an insult to the victims of these natural disasters and an 
insult to the ultimate victim in this fraud, the American taxpayer. 
Natural disasters and emergency situations often create an opportunity 
for unscrupulous individuals to take advantage of both the immediate 
victims of the disaster or emergency, as well as those who offer 
financial and other assistance to the victims. The American people are 
extremely generous in responding to disasters, but they should not be 
expected to tolerate the fraud of those who deceitfully exploit their 
generosity.
  In addition to creating a new Federal crime that specifically 
prohibits fraud in connection with any emergency or disaster benefit--
including Federal assistance or private charitable contributions--my 
bill would also update the current mail and wire fraud statutes found 
in chapter 63 of title 18--title 18 sections 1341, 1343. Those are the 
bread-and-butter criminal statutes for most frauds. My bill, though, 
changes the Federal mail and wire fraud statutes by adding emergency or 
disaster benefits fraud to the 30-year maximum penalties that are 
currently reserved for cases involving fraud against banks or financial 
institutions.
  My bill is timely. Just this month we have seen tornadoes that killed 
at least 20 people in the Southeast and Midwest and damaged or 
destroyed hundreds of homes from Minnesota to the gulf coast. I 
recently toured many of the areas hit by the storms, and I was shocked 
by the devastation. The loss of eight Alabama schoolchildren at 
Enterprise High School was especially heartbreaking.
  I had the opportunity to be with President Bush on the second day I 
was there. He came down and met with the families of those eight young 
people who were killed. He spent almost an hour with them--almost 10 
minutes a person. It was a moving experience to be a part of that. I 
talked with each one of those families and felt the pain and loss they 
suffered.
  Of course, money is not an answer to their pain. But I would say 
this: People do want to help. If people take advantage and steal from 
those who want to help families like that, who are in pain and loss, it 
is a despicable crime, to me.
  The President has declared Enterprise and several other Alabama 
localities Federal disaster areas, including Millers Ferry, AL, in my 
home county, where one individual was killed. I knew him and his 
family, and saw the people there who I knew who suffered a total loss 
of their homes, caused by this incredibly powerful tornado. Being 
declared a disaster area means victims will be eligible to receive 
Federal financial aid. It is my responsibility to make sure the money 
goes to the right people and is not scammed off by criminals posing as 
victims.
  I know my colleagues share my deep sympathy for the families who lost 
loved ones and suffered injuries last week, but it is simply not enough 
to have sympathy. We must ensure the full resources of the Federal 
Government are quickly deployed to the affected States, and we must 
ensure these resources are protected and distributed only to real 
victims, not individuals seeking to take advantage of the disaster.
  It is disheartening that there was so much fraud associated with the 
relief following Hurricanes Katrina and Rita, but it is not surprising. 
I have been there in the aftermath of hurricanes as a prosecutor. I 
have seen such fraud and abuse firsthand.
  Our resources are not unlimited, and it is critical that we ensure 
that every relief dollar goes to legitimate victims. It is important we 
give prosecutors the tools they need to protect legitimate victims and 
to protect American taxpayers.
  By passing this legislation, the Senate will send a strong signal 
that exploiting the kindness of the American people in times of crisis 
is a serious crime that will be treated with appropriate severity. We 
will not tolerate criminals stealing from the pockets of disaster 
victims. A vote for this bill is a vote to ensure that victims and the 
generous members of the American public are not preyed upon by 
criminals attempting to profit from these disasters and emergencies.
  I think it is a reasonable piece of legislation. We worked hard, on a 
bipartisan basis, with members of the Senate Judiciary Committee and 
the Department of Justice. Senator Leahy has indicated he will bring 
the bill up in the Judiciary Committee this week. We are looking 
forward to an analysis of it.
  We will be glad to listen to any suggestions for improvements that 
may be made, and I think it is a piece of legislation we should move 
forward with.
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