[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,
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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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