[Congressional Record Volume 153, Number 195 (Wednesday, December 19, 2007)]
[House]
[Pages H16864-H16866]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




EMERGENCY AND DISASTER ASSISTANCE FRAUD PENALTY ENHANCEMENT ACT OF 2007

  Mr. CONYERS. Madam Speaker, I move to suspend the rules and pass the 
Senate bill (S. 863) to amend title 18, United States Code, with 
respect to fraud in connection with major disaster or emergency funds.
  The Clerk read the title of the Senate bill.
  The text of the Senate bill is as follows:

                                 S. 863

       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 ``Emergency and Disaster 
     Assistance Fraud Penalty Enhancement Act of 2007''.

     SEC. 2. FRAUD IN CONNECTION WITH MAJOR DISASTER OR EMERGENCY 
                   BENEFITS.

       (a) In General.--Chapter 47 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 1040. Fraud in connection with major disaster or 
       emergency benefits

       ``(a) Whoever, in a circumstance described in subsection 
     (b) of this section, knowingly--
       ``(1) falsifies, conceals, or covers up by any trick, 
     scheme, or device any material fact; or
       ``(2) makes any materially false, fictitious, or fraudulent 
     statement or representation, or makes or uses any false 
     writing or document knowing the same to contain any 
     materially false, fictitious, or fraudulent statement or 
     representation,
     in any matter involving any benefit authorized, transported, 
     transmitted, transferred, disbursed, or paid in connection 
     with a major disaster declaration under section 401 of the 
     Robert T. Stafford Disaster Relief and Emergency Assistance 
     Act (42 U.S.C. 5170) or an emergency declaration under 
     section 501 of the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act (42 U.S.C. 5191), or in connection 
     with any procurement of property or services related to any 
     emergency or major disaster declaration as a prime contractor 
     with the United States or as a subcontractor or supplier on a 
     contract in which there is a prime contract with the United 
     States, shall be fined under this title, imprisoned not more 
     than 30 years, or both.
       ``(b) A circumstance described in this subsection is any 
     instance where--
       ``(1) the authorization, transportation, transmission, 
     transfer, disbursement, or payment of the benefit is in or 
     affects interstate or foreign commerce;
       ``(2) the benefit is transported in the mail at any point 
     in the authorization, transportation, transmission, transfer, 
     disbursement, or payment of that benefit; or
       ``(3) the benefit is a record, voucher, payment, money, or 
     thing of value of the United States, or of any department or 
     agency thereof.
       ``(c) In this section, the term `benefit' means any record, 
     voucher, payment, money or thing of value, good, service, 
     right, or privilege provided by the United States, a State or 
     local government, or other entity.''.
       (b) Clerical Amendment.--The table of sections for chapter 
     47 of title 18, United States Code, is amended by adding at 
     the end the following new item:

``1040. Fraud in connection with major disaster or emergency 
              benefits.''.

     SEC. 3. INCREASED CRIMINAL PENALTIES FOR ENGAGING IN WIRE, 
                   RADIO, AND TELEVISION FRAUD DURING AND RELATION 
                   TO A PRESIDENTIALLY DECLARED MAJOR DISASTER OR 
                   EMERGENCY.

       Section 1343 of title 18, United States Code, is amended by 
     inserting: ``occurs in relation to, or involving any benefit 
     authorized,

[[Page H16865]]

     transported, transmitted, transferred, disbursed, or paid in 
     connection with, a presidentially declared major disaster or 
     emergency (as those terms are defined in section 102 of the 
     Robert T. Stafford Disaster Relief and Emergency Assistance 
     Act (42 U.S.C. 5122)), or'' after ``If the violation''.

     SEC. 4. INCREASED CRIMINAL PENALTIES FOR ENGAGING IN MAIL 
                   FRAUD DURING AND RELATION TO A PRESIDENTIALLY 
                   DECLARED MAJOR DISASTER OR EMERGENCY.

       Section 1341 of title 18, United States Code, is amended by 
     inserting: ``occurs in relation to, or involving any benefit 
     authorized, transported, transmitted, transferred, disbursed, 
     or paid in connection with, a presidentially declared major 
     disaster or emergency (as those terms are defined in section 
     102 of the Robert T. Stafford Disaster Relief and Emergency 
     Assistance Act (42 U.S.C. 5122)), or'' after ``If the 
     violation''.

     SEC. 5. DIRECTIVE TO SENTENCING COMMISSION.

       (a) In General.--Pursuant to its authority under section 
     994(p) of title 28, United States Code, and in accordance 
     with this section, the United States Sentencing Commission 
     forthwith shall--
       (1) promulgate sentencing guidelines or amend existing 
     sentencing guidelines to provide for increased penalties for 
     persons convicted of fraud or theft offenses in connection 
     with a major disaster declaration under section 401 of the 
     Robert T. Stafford Disaster Relief and Emergency Assistance 
     Act (42 U.S.C. 5170) or an emergency declaration under 
     section 501 of the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act (42 U.S.C. 5191); and
       (2) submit to the Committee on the Judiciary of the Senate 
     and the Committee on the Judiciary of the House of 
     Representatives an explanation of actions taken by the 
     Commission pursuant to paragraph (1) and any additional 
     policy recommendations the Commission may have for combating 
     offenses described in that paragraph.
       (b) Requirements.--In carrying out this section, the 
     Sentencing Commission shall--
       (1) ensure that the sentencing guidelines and policy 
     statements reflect the serious nature of the offenses 
     described in subsection (a) and the need for aggressive and 
     appropriate law enforcement action to prevent such offenses;
       (2) assure reasonable consistency with other relevant 
     directives and with other guidelines;
       (3) account for any aggravating or mitigating circumstances 
     that might justify exceptions, including circumstances for 
     which the sentencing guidelines currently provide sentencing 
     enhancements;
       (4) make any necessary conforming changes to the sentencing 
     guidelines; and
       (5) assure that the guidelines adequately meet the purposes 
     of sentencing as set forth in section 3553(a)(2) of title 18, 
     United States Code.
       (c) Emergency Authority and Deadline for Commission 
     Action.--The Commission shall promulgate the guidelines or 
     amendments provided for under this section as soon as 
     practicable, and in any event not later than the 30 days 
     after the date of enactment of this Act, in accordance with 
     the procedures set forth in section 21(a) of the Sentencing 
     Reform Act of 1987, as though the authority under that Act 
     had not expired.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Michigan (Mr. Conyers) and the gentleman from Ohio (Mr. Chabot) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Michigan.


                             General Leave

  Mr. CONYERS. Madam Speaker, I ask unanimous consent that all Members 
may have 5 legislative days to revise and extend their remarks and 
include extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Michigan?
  There was no objection.
  Mr. CONYERS. Madam Speaker, I yield myself such time as I may 
consume.
  Members of the Congress, this important legislation strengthens 
Federal criminal prohibitions against fraudulent misuse of emergency 
and disaster relief funds. It passed the Senate earlier this month 
without opposition. It is a good bill, and one that the House should 
support.
  Reports of fraud surfaced almost immediately after the Federal 
Emergency Management Agency began distributing funds Congress had 
appropriated for disaster aid to victims of Hurricane Katrina, 
Hurricane Rita, and Hurricane Wilma. These reports included allegations 
that funds had been misused to purchase luxury goods, that noneligible 
persons had applied for and received benefits, and that criminals had 
established phony Katrina-related Web sites to swindle those who wished 
to contribute to legitimate disaster assistance efforts.
  Last year, the GAO reported that it had identified numerous instances 
of fraud in connection with Katrina and Rita disaster relief. Although 
the total amount of cost of these fraud schemes is not yet known, the 
GAO estimates that it will certainly be in the amounts of billions of 
dollars.
  Despite diligent efforts by Federal law enforcement agencies to 
prosecute these schemes, current criminal laws are not adequate to the 
task. The Emergency and Disaster Assistance Fraud Penalty Enhancement 
Act addresses that shortcoming in several respects.
  The bill creates a new Federal crime that specifically prohibits 
fraud in connection with any emergency or disaster relief benefit as to 
both Federal assistance and private charitable giving, with fines up to 
$250,000 for an individual, and up to $500,000 for an organization, and 
prison terms up to 30 years. The bill also increases prison terms for 
engaging in mail or wire fraud in connection with emergency or disaster 
relief to the same levels as currently apply in cases involving bank 
fraud.
  The bill also directs the Sentencing Commission to revise its 
sentencing guidelines for fraud or theft in connection with a major 
disaster emergency declaration in light of the new statutory changes.
  It is a bipartisan measure, and will help ensure that disaster 
assistance funds are received by their intended recipients and used for 
their intended purposes. I am proud of the work that the Judiciary 
Committee has done on both sides of the aisle in this matter, and 
particularly commend the gentleman from Ohio (Mr. Chabot) in his 
management of this legislation.
  I reserve the balance of my time.
  Mr. CHABOT. Madam Speaker, I yield myself such time as I may consume.
  I rise in strong support of S. 863, the Emergency and Disaster 
Assistance Fraud Penalty Enhancement Act of 2007, and I want to thank 
and commend the gentleman from Michigan (Mr. Conyers) for his 
leadership on this bill as well.
  In January of this year, I introduced a companion bill, H.R. 846, 
that would create a new criminal offense and enhance current Federal 
penalties for fraud associated with major disasters and emergency 
benefits.
  Madam Speaker, August 29, 2005 was a day that this country will never 
forget. The images of destroyed homes, neighborhoods, communities, 
displaced families and friends, and lives literally torn apart by 
Hurricane Katrina especially will not easily fade from our memories.
  The devastation in the gulf coast region reminds us of a tragedy that 
we would expect to see in Third World countries, not in our country, 
and particularly not in regions known for their history and their 
character.
  Since Hurricanes Katrina, Rita, and Wilma devastated the gulf coast 
more than 2 years ago, Congress has provided more than $117 billion in 
relief to the region, including reconstruction efforts, medical 
services, human services, including funds for unemployment and housing 
assistance, crisis counseling, and various other needs of the victims. 
In addition, charities like the Red Cross and Salvation Army have 
contributed several billion dollars more to the effort, and many, many 
volunteers contributed their time.

                              {time}  1300

  To no one's surprise, almost immediately after FEMA and private 
charities began administering funds to victims, reports of fraud began 
to surface, such as noneligible persons filing false claims for 
benefits, and the creation of phony Katrina-related Web sites designed 
to exploit those who wished to make legitimate disaster relief 
contributions.
  More elaborate and organized schemes have also come to light, 
including a group in Bakersfield, California, which conspired with 
employees of a Red Cross call center to defraud the charity by 
obtaining false claims information in order to collect assistance 
payments through Western Union. These scams don't just affect disaster 
victims, but the charities, donors and taxpayers who provide this 
assistance.
  Federal law enforcement officials, including the Department of 
Justice, responded to the problem. In September 2005, the Hurricane 
Katrina Fraud Task Force was formed to mobilize the resources of the 
Federal Government, including Department of Justice, Homeland Security, 
Treasury, the FBI, FDC

[[Page H16866]]

and other Federal partners, as well as representatives of State and 
local law enforcement.
  Since its formation in 2005, the task force has assisted 41 United 
States Attorneys to prosecute more than 768 people to date. In 
addition, the Task Force Joint Command Center in Baton Rouge, 
Louisiana, continues to receive more than 700 calls each month through 
its nationwide hotline and has screened and referred more than 14,000 
leads to law enforcement agencies and field offices across the country.
  Yet, despite these efforts, it is clear that current criminal 
penalties are insufficient to deter disaster fraud. For example, in the 
U.S. Attorneys Office for the Middle District of Louisiana alone, 128 
individuals have been charged with hurricane-related fraud.
  S. 863 would strengthen Federal law enforcement's ability to combat 
and deter those who would otherwise attempt to exploit another's 
tragedy, preventing assistance from going to those who truly need it. 
How? Well, first this legislation creates a new specific criminal 
penalty to prohibit fraud in connection with any emergency or disaster 
benefit, including Federal assistance or private charitable 
contributions, as long as the benefit was authorized or paid in 
interstate commerce, transported through the mails, or is something of 
value. The penalty for engaging in such fraud is a fine or imprisonment 
of up to 30 years.
  Second, the bill amends the Federal mail and wire fraud statutes to 
add emergency or disaster benefits fraud to the 30-year enhanced 
penalties in those statutes. Currently, the 30-year enhancement is 
reserved only for financial institutions fraud.
  Finally, the bill directs the United States Sentencing Commission to 
review existing penalties for disaster assistance fraud, amend the 
sentencing guidelines as necessary, and report back to the Judiciary 
Committee of both the House and the Senate.
  The Emergency and Disaster Assistance Fraud Penalty Enhancement Act 
unanimously passed the House back in the 109th Congress. Tough 
penalties for criminals who prey on innocent disaster victims are long 
overdue. I urge my colleagues to support S. 863.
  I once again thank the gentleman from Michigan (Mr. Conyers) for his 
leadership on this issue.
  Madam Speaker, I reserve the balance of my time.
  Mr. CONYERS. Madam Speaker, I am pleased to yield 2 minutes to the 
indefatigable member of the Judiciary Committee, the gentlewoman from 
Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. I thank the distinguished chairman of the 
full committee. Through his leadership, we have had a number, huge 
numbers of solutions being put forward, and I thank him so very much 
for serving the American people as he has done. Let me thank the 
gentleman from Ohio (Mr. Chabot) for his leadership and share some real 
life stories.
  Madam Speaker, I lived through Hurricane Katrina and Rita and spent a 
good number of my days in New Orleans visiting not only with the 
victims of Hurricane Katrina, but also subsequently in Texas visiting 
with those impacted by Hurricane Rita. I also engaged extensively with 
small contractors and workers who indicated that in addition to trying 
to put themselves forward to do the best work on behalf of the victims, 
they were victimized. And the victims were victimized over and over 
again: fraudulent work being done, contracts being signed, moneys being 
promised, and nothing happening.
  This bill will set the record straight. Not only does it send a 
message in times of disaster to those who come rushing in to try and 
provide, if you will, the saving flag or the saving grace, but 
hopefully it will send a message to local jurisdictions that they must 
have enormous oversight in ensuring that they are not subjected to 
criminal penalties.
  As a member of the Homeland Security Committee, let me also 
acknowledge Chairman Thompson. In the early days after Hurricane 
Katrina, we had oversight hearings over the abuses that were occurring, 
the lack of oversight by FEMA. I went into some of the sites, if you 
will, where individuals were being signed up for work or benefits. But 
the aftermath of it was what the shame was. How people were not given 
the benefits they were promised, how contractors did not fulfill their 
duties, and how local jurisdictions were made to pay enormous prices to 
large contractors, and yet local small businesses, minority-owned 
businesses and women-owned businesses could not get business and could 
not be paid. Even today, there are small contractors who are waiting 
still to be paid.
  I rise to support this legislation, the Emergency and Disaster 
Assistance Fraud Penalty Enhancement Act of 2007. It is long overdue.
  Mr. CHABOT. Madam Speaker, I yield back the balance of my time.
  Mr. CONYERS. Madam Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Ms. DeGette). The question is on the motion 
offered by the gentleman from Michigan (Mr. Conyers) that the House 
suspend the rules and pass the Senate bill, S. 863.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the Senate bill was passed.
  A motion to reconsider was laid on the table.

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