[Congressional Record Volume 155, Number 33 (Wednesday, February 25, 2009)]
[Senate]
[Pages S2475-S2479]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  By Mr. DURBIN (for himself and Ms. Klobuchar):
  S. 470. A bill to combat organized crime involving the illegal 
acquisition of retail goods for the purpose of selling those illegally 
obtained goods through physical and online retail marketplaces; to the 
Committee on the Judiciary.
  Mr. DURBIN. Mr. President, I rise to speak about legislation that I 
am introducing today, the Combating Organized Retail Crime Act of 2009. 
This legislation takes important steps to confront the growing problem 
of organized criminal activity involving stolen and resold retail 
goods. This organized retail crime costs retailers billions of dollars 
per year and creates significant health and safety risks for consumers. 
My legislation will toughen criminal laws and put in place effective 
regulatory and information-sharing measures to help retailers, 
secondary marketplaces, and law enforcement agencies work together to 
stop this crime. I am pleased that my colleague Senator Klobuchar is 
joining me in introducing this important legislation, and I look 
forward to working with her and all my colleagues to see it passed into 
law.
  I recently became Chairman of the Senate Crime and Drugs Subcommittee 
and I hope to hold a hearing in the Subcommittee on the problem of 
organized retail crime and the Combating Organized Retail Crime Act. I 
also want to acknowledge that Congressman Bobby Scott, the Chairman of 
the House Crime Subcommittee, and Congressman Brad Ellsworth are each 
introducing bills to crack down on organized retail crime. I look 
forward to working with them and all of my colleagues to enact 
legislation that will address this growing problem in a comprehensive 
and effective manner.
  Organized retail crime rings currently operate across the Nation and 
internationally. Their criminal activity begins with the coordinated 
theft of large amounts of items from retail stores with the intent to 
resell those items. The foot soldiers in these organized retail crime 
rings are professional shoplifters, called ``boosters,'' who steal from 
retail stores such items as over-the-counter drugs, baby formula, 
medical diagnostic tests, health and beauty aids, clothing, razor 
blades, and electronic devices. These boosters often use sophisticated 
means for evading retailer anti-theft safeguards, and occasionally 
dishonest retail employees are complicit in the theft. Each booster 
routinely steals thousands of dollars worth of items from multiple 
stores, and delivers the items to a ``fence,'' or a person who buys 
stolen products from boosters for a fee that is frequently paid in cash 
or drugs.
  Today, organized retail crime rings often enlist numerous fences to 
deliver stolen retail goods to processing and storage warehouses 
operated by the rings. At these warehouse locations, teams of workers 
sort the stolen items, disable anti-theft tracking devices, and remove 
labels that identify the items with a particular retailer. In some 
instances, they alter items' expiration dates, replace labels with 
those of more expensive products, or dilute products and repackage the 
modified contents in seemingly-authentic packaging. Often, the 
conditions in which these stolen goods are transported, handled and 
stored are substandard, leading to the deterioration or contamination 
of the goods.
  Organized retail crime rings typically resell their stolen 
merchandise in physical marketplaces, such as flea markets and swap-
meets, or on Internet auction sites. Internet sites are particularly 
tempting avenues for these sales, since the Internet reaches a 
worldwide market and allows sellers to operate anonymously and maximize 
return.
  Organized retail crime has a variety of harmful effects. Retailers 
and the FBI estimate that this crime costs retailers approximately $30 
billion per year and deprives states of hundreds of millions of dollars 
in lost sales tax revenues. The proceeds of organized retail crime can 
be used to finance other forms of criminal behavior, including gang 
activity, drug trafficking and international terrorism. Further, 
organized retail crime often involves the resale of consumable goods 
like baby formula or medical diagnostic tests like diabetic strips, 
which can cause significant harm to consumers when stored improperly or 
sold past their expiration date.

  Although the problem of organized retail crime predates the economic 
crisis facing our nation, the current recession has lent more urgency 
to the need to curb organized retail crime. In recent months theft and 
shoplifting from retailers has increased and retailers' revenues have 
decreased, thus enlarging the bite that organized retail crime has 
taken out of retailers' balance sheets. A December 2008 survey by the 
Retail Industry Leaders Association found that 80 percent of the 
retailers surveyed reported experiencing an increase in organized 
retail crime since the start of the current economic downturn. In a 
2008 survey of loss prevention executives performed by the National 
Retail Federation, 85 percent of the 114 retailers surveyed indicated 
that their company had been a victim of organized retail crime in the 
past 12 months. Many law enforcement officials predict that organized 
retail crime will continue to increase during these troubled economic 
times.
  After I introduced legislation on this subject last Congress, I 
listened to the views of stakeholders from law enforcement, the retail 
community, and the Internet marketplace community, and have made 
several revisions to my legislation in response to their suggestions. 
The legislation I am introducing today, the Combating Organized Retail 
Crime Act of 2009, would do the following:
  First, it would toughen the criminal code's treatment of organized 
retail crime. It would refine certain offenses, such as the crimes of 
interstate transport and sale of stolen goods, to capture conduct that 
is being committed by individuals engaged in organized retail crime. It 
would also require the U.S. Sentencing Commission to consider relevant 
sentencing guideline enhancements.
  Second, the bill would establish a reporting system through which 
evidence of organized retail crime can be effectively shared between 
the victimized retailers, the marketplaces where items are being 
resold, and the Justice Department. The bill would create a form that 
retailers could use to describe suspected illegal sales activity 
involving goods that were stolen from that retailer. The retailer would 
sign and submit this form to both the Justice Department and to the 
operator of a physical or online marketplace where

[[Page S2476]]

the stolen goods are suspected of being offered for resale. Upon 
receiving the form, the marketplace operator would be required to 
conduct an account review of the suspected sellers and provide the 
results of that account review to the Justice Department. This 
reporting system would ensure that the Justice Department receives 
information from both retailers and marketplaces in order to piece 
together organized retail crime investigations and prosecutions.
  Third, the bill would require that when a marketplace operator is 
presented with clear and convincing evidence that a seller on that 
marketplace is selling stolen goods, the operator must terminate that 
seller's activities unless the seller can produce exculpatory evidence. 
The bill would also require that when a marketplace operator is 
presented with evidence of criminal activity involving a seller who 
offers consumable goods or medical diagnostic tests on that 
marketplace, the operator must immediately suspend the ability of that 
seller to sell such goods because of the potentially imminent danger to 
public safety.
  Additionally, the bill would require high-volume sellers on Internet 
marketplace sites to provide a physical address to the marketplace 
operator. This address would be shared with the Justice Department and 
with retailers who attest and provide evidence that the high-volume 
seller is suspected of reselling goods stolen from that retailer. This 
address-sharing regime will permit appropriate inquiries to determine 
whether high-volume Internet sellers are legitimate operations, and is 
similar to address-sharing regimes that permit inquiries into possible 
copyright violations by online sellers.
  In sum, the Combating Organized Retail Crime Act of 2009 is targeted 
legislation that aims to deter organized retail crime and facilitate 
the identification and prosecution of those who participate in it. The 
bill heightens the penalties for organized retail crime, shuts down 
criminals who are selling stolen goods, and places valuable information 
about illegal activity into the hands of law enforcement. This 
legislation has broad support in the retail industry in my home state 
of Illinois and nationwide. It is supported by the Illinois Retail 
Merchants Association, the National Retail Federation, the Retail 
Industry Leaders Association, the Food Marketing Institute, the 
National Association of Chain Drug Stores, and the Coalition to Stop 
Organized Retail Crime, whose members include such retail chains as 
Walgreens, Home Depot, Target, Wal-Mart, Safeway, and Macy's.
  Organized retail crime is a growing problem nationwide. There is a 
pressing need to address it, particularly in light of the weakening 
economy and the risks such crime creates for unknowing consumers. I 
urge my colleagues to support this legislation so we can effectively 
combat this crime.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 470

       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 ``Combating Organized Retail 
     Crime Act of 2009''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) Organized retail crime involves the coordinated 
     acquisition of large volumes of retail merchandise by theft, 
     embezzlement, fraud, false pretenses, or other illegal means 
     from commercial entities engaged in interstate commerce, for 
     the purpose of selling or distributing such illegally 
     obtained items in the stream of commerce. Organized retail 
     crime is a growing problem nationwide that costs American 
     companies and consumers billions of dollars annually and that 
     has a substantial and direct effect upon interstate commerce.
       (2) The illegal acquisition and black-market sale of 
     merchandise by persons engaged in organized retail crime 
     result in an estimated annual loss of hundreds of millions of 
     dollars in sales and income tax revenues to State and local 
     governments.
       (3) The illegal acquisition, unsafe tampering and storage, 
     and unregulated redistribution of consumer products such as 
     baby formula, over-the-counter drugs, medical diagnostic 
     tests, and other items by persons engaged in organized retail 
     crime pose a health and safety hazard to consumers 
     nationwide.
       (4) Investigations into organized retail crime have 
     revealed that the illegal income resulting from such crime 
     often benefits persons and organizations engaged in other 
     forms of criminal activity, such as drug trafficking and gang 
     activity.
       (5) Items obtained through organized retail crime are 
     resold in a variety of different marketplaces, including flea 
     markets, swap meets, open-air markets, and Internet auction 
     websites. Increasingly, persons engaged in organized retail 
     crime use Internet auction websites to resell illegally 
     obtained items. The Internet offers such sellers a worldwide 
     market and a degree of anonymity that physical marketplace 
     settings do not offer.

     SEC. 3. OFFENSES RELATED TO ORGANIZED RETAIL CRIME.

       (a) Transportation of Stolen Goods.--The first undesignated 
     paragraph of section 2314 of title 18, United States Code, is 
     amended by inserting after ``more,'' the following: ``or, 
     during any 12-month period, of an aggregate value of $5,000 
     or more during that period,''.
       (b) Sale or Receipt of Stolen Goods.--The first 
     undesignated paragraph of section 2315 of title 18, United 
     States Code, is amended by inserting after ``$5,000 or 
     more,'' the following: ``or, during any 12-month period, of 
     an aggregate value of $5,000 or more during that period,''.
       (c) Fraud in Connection With Access Devices.--Section 
     1029(e)(1) of title 18, United States Code, is amended by 
     inserting ``Universal Product Code label or similar product 
     code label, gift card, stock keeping unit number, radio-
     frequency identification tag, electronic article surveillance 
     tag,'' after ``code,''.
       (d) Review and Amendment of Federal Sentencing Guidelines 
     for Offenses Related to Organized Retail Crime.--
       (1) Review and amendment.--
       (A) In general.--The United States Sentencing Commission, 
     pursuant to its authority under section 994 of title 28, 
     United States Code, and in accordance with this subsection, 
     shall review and, if appropriate, amend the Federal 
     sentencing guidelines (including its policy statements) 
     applicable to persons convicted of offenses involving 
     organized retail crime, which is the coordinated acquisition 
     of large volumes of retail merchandise by theft, 
     embezzlement, fraud, false pretenses, or other illegal means 
     from commercial entities engaged in interstate commerce for 
     the purpose of selling or distributing the illegally obtained 
     items in the stream of commerce.
       (B) Offenses.--Offenses referred to in subparagraph (A) may 
     include offenses contained in--
       (i) sections 1029, 2314, and 2315 of title 18, United 
     States Code; and
       (ii) any other relevant provision of the United States 
     Code.
       (2) Requirements.--In carrying out the requirements of this 
     subsection, the United States Sentencing Commission shall--
       (A) ensure that the Federal sentencing guidelines 
     (including its policy statements) reflect--
       (i) the serious nature and magnitude of organized retail 
     crime; and
       (ii) the need to deter, prevent, and punish offenses 
     involving organized retail crime;
       (B) consider the extent to which the Federal sentencing 
     guidelines (including its policy statements) adequately 
     address offenses involving organized retail crime to 
     sufficiently deter and punish such offenses;
       (C) maintain reasonable consistency with other relevant 
     directives and sentencing guidelines;
       (D) account for any additional aggravating or mitigating 
     circumstances that might justify exceptions to the generally 
     applicable sentencing ranges; and
       (E) consider whether to provide a sentencing enhancement 
     for those convicted of conduct involving organized retail 
     crime, where the conduct involves--
       (i) a threat to public health and safety, including 
     alteration of an expiration date or of product ingredients;
       (ii) theft, conversion, alteration, or removal of a product 
     label;
       (iii) a second or subsequent offense; or
       (iv) the use of advanced technology to acquire retail 
     merchandise by means of theft, embezzlement, fraud, false 
     pretenses, or other illegal means.

     SEC. 4. SALES OF ILLEGALLY OBTAINED ITEMS IN PHYSICAL OR 
                   ONLINE RETAIL MARKETPLACES.

       (a) In General.--Chapter 113 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 2324. Physical and online retail marketplaces

       ``(a) Definitions.--As used in this section, the following 
     definitions shall apply:
       ``(1) High volume seller.--The term `high volume seller' 
     means a user of an online retail marketplace who, in any 
     continuous 12-month period during the previous 24 months, has 
     entered into--
       ``(A) multiple discrete sales or transactions resulting in 
     the accumulation of an aggregate total of $12,000 or more in 
     gross revenues; or
       ``(B) 200 or more discrete sales or transactions resulting 
     in the accumulation of an aggregate total of $5,000 or more 
     in gross revenues.
       ``(2) Internet site.--The term `Internet site' means a 
     location on the Internet that is accessible at a specific 
     Internet domain name or address under the Internet Protocol

[[Page S2477]]

     (or any successor protocol), or that is identified by a 
     uniform resource locator.
       ``(3) Online retail marketplace.--The term `online retail 
     marketplace' means an Internet site where users other than 
     the operator of the Internet site can enter into transactions 
     with each other for the sale or distribution of goods or 
     services, and in which--
       ``(A) the goods or services are promoted through inclusion 
     in search results displayed within the Internet site;
       ``(B) the operator of the Internet site--
       ``(i) has the contractual right to supervise the activities 
     of users with respect to the goods or services; or
       ``(ii) has a financial interest in the sale of the goods or 
     services; and
       ``(C) in any continuous 12-month period during the previous 
     24 months, users other than the operator of the Internet site 
     collectively have entered into not fewer than 1,000 discrete 
     transactions for the sale of goods or services.
       ``(4) Operator of an online retail marketplace.--The term 
     `operator of an online retail marketplace' means a person or 
     entity that--
       ``(A) operates or controls an online retail marketplace; 
     and
       ``(B) makes the online retail marketplace available for 
     users to enter into transactions with each other on that 
     marketplace for the sale or distribution of goods or 
     services.
       ``(5) Operator of a physical retail marketplace.--The term 
     `operator of a physical retail marketplace' means a person or 
     entity that rents or otherwise makes available a physical 
     retail marketplace to transient vendors to conduct business 
     for the sale of goods, or services related to the goods.
       ``(6) Physical retail marketplace.--The term `physical 
     retail marketplace'--
       ``(A) may include a flea market, indoor or outdoor swap 
     meet, open air market, or other similar environment;
       ``(B) means a venue or event--
       ``(i) in which physical space is made available not more 
     than 4 days per week by an operator of a physical retail 
     marketplace as a temporary place of business for transient 
     vendors to conduct business for the sale of goods, or 
     services related to the goods; and
       ``(ii) in which in any continuous 12-month period during 
     the preceding 24 months, there have been 10 or more days on 
     which 5 or more transient vendors have conducted business at 
     the venue or event; and
       ``(C) does not mean and shall not apply to an event which 
     is organized and conducted for the exclusive benefit of any 
     community chest, fund, foundation, association, or 
     corporation organized and operated for religious, 
     educational, or charitable purposes, provided that no part of 
     any admission fee or parking fee charged vendors or 
     prospective purchasers, and no part of the gross receipts or 
     net earnings from the sale or exchange of goods or services, 
     whether in the form of a percentage of the receipts or 
     earnings, salary, or otherwise, inures to the benefit of any 
     private shareholder or person participating in the 
     organization or conduct of the event.
       ``(7) Structuring.--The term `structuring' means to 
     knowingly conduct, or attempt to conduct, alone, or in 
     conjunction with or on behalf of 1 or more other persons, 1 
     or more transactions in currency, in any amount, in any 
     manner, with the purpose of evading categorization as a 
     physical retail marketplace, an online retail marketplace, or 
     a high volume seller.
       ``(8) Temporary place of business.--The term `temporary 
     place of business' means any physical space made open to the 
     public, including but not limited to a building, part of a 
     building, tent or vacant lot, which is temporarily occupied 
     by 1 or more persons or entities for the purpose of making 
     sales of goods, or services related to those goods, to the 
     public. A place of business is not temporary with respect to 
     a person or entity if that person or entity conducts business 
     at the place and stores unsold goods there when it is not 
     open for business.
       ``(9) Transient vendor.--The term `transient vendor' means 
     any person or entity that, in the usual course of business, 
     transports inventory, stocks of goods, or similar tangible 
     personal property to a temporary place of business for the 
     purpose of entering into transactions for the sale of the 
     property.
       ``(10) User.--The term `user' means a person or entity that 
     accesses an online retail marketplace for the purpose of 
     entering into transactions for the sale or distribution of 
     goods or services.
       ``(11) Valid physical postal address.--The term `valid 
     physical postal address' means--
       ``(A) a current street address, including the city, State, 
     and zip code;
       ``(B) a Post Office box that has been registered with the 
     United States Postal Service; or
       ``(C) a private mailbox that has been registered with a 
     commercial mail receiving agency that is established pursuant 
     to United States Postal Service regulations.
       ``(b) Safeguards Against Sales of Illegally Obtained 
     Items.--
       ``(1) Suspected illegal sales activity forms.--
       ``(A) Regulations.--The Attorney General shall promulgate 
     regulations--
       ``(i) establishing a form, called a `suspected illegal 
     sales activity form', through which an authorized person may 
     present evidence showing that a transient vendor of a 
     physical retail marketplace, a user of an online retail 
     marketplace, or a director, officer, employee, or agent of 
     the transient vendor or user, has used or is using a physical 
     retail marketplace or an online retail marketplace to sell or 
     distribute items that were stolen, embezzled, or obtained by 
     fraud, false pretenses, or other illegal means from the 
     authorized person, or has engaged in or is engaging in 
     structuring;
       ``(ii) requiring that an authorized person who submits a 
     suspected illegal sales activity form shall, in a manner to 
     be specified by the Attorney General--

       ``(I) refer in the form to 1 or more specific items, 
     individuals, entities or transactions allegedly involved in 
     theft, embezzlement, fraud, false pretenses, structuring, or 
     other illegal activity;
       ``(II) refer in the form to 1 or more alleged violations of 
     Federal law;
       ``(III) provide along with the form documentary evidence 
     supporting the allegations of illegal activity, which may 
     include--

       ``(aa) video recordings;
       ``(bb) audio recordings;
       ``(cc) sworn affidavits;
       ``(dd) financial, accounting, business, or sales records;
       ``(ee) records or transcripts of phone conversations;
       ``(ff) documents that have been filed in a Federal or State 
     court proceeding; and
       ``(gg) signed reports to or from a law enforcement agency; 
     and

       ``(IV) sign the form;

       ``(iii) providing that an authorized person who completes a 
     suspected illegal sales activity form may submit the form and 
     accompanying documentary evidence to the operator of a 
     physical retail marketplace or the operator of an online 
     retail marketplace, and that if the authorized person submits 
     the form to the operator, the authorized person shall submit 
     the form and documentary evidence to the Attorney General; 
     and
       ``(iv) ensuring that a suspected illegal sales activity 
     form and accompanying documentary evidence are able to be 
     submitted by an authorized person to the operator of a 
     physical retail marketplace or online retail marketplace and 
     to the Attorney General by mail and by electronic means.
       ``(B) Authorized persons.--
       ``(i) In general.--For purposes of this section, an 
     authorized person is a person who--

       ``(I) offers goods or services for sale to the public as 
     part of a business operation;
       ``(II) has submitted to the Attorney General in writing, on 
     a form that shall be promulgated by the Attorney General and 
     made available on the Internet, a request to serve as an 
     authorized person; and
       ``(III) has been approved by the Attorney General to serve 
     as an authorized person.

       ``(ii) Approval.--The Attorney General shall approve a 
     request by a person to serve as an authorized person if the 
     person offers goods or services for sale to the public as 
     part of a business operation. An approval under this clause 
     shall remain in effect unless the authorized person requests 
     that the Attorney General terminate the approval.
       ``(iii) Fees.--The Attorney General may charge a processing 
     fee to a person solely to cover the cost of processing the 
     approval of the person as an authorized person.
       ``(iv) Agents.--An individual who serves as an officer, 
     employee, or agent for a person who offers goods or services 
     for sale to the public as part of a business operation may 
     serve as an authorized person on behalf of that person.
       ``(v) List.--The Attorney General shall maintain a list of 
     authorized persons, which shall be made available to the 
     public upon request.
       ``(C) Availability of forms.--The Attorney General shall 
     make suspected illegal sales activity forms available on the 
     Internet to authorized persons.
       ``(2) Duties of operators of physical retail marketplaces 
     and online retail marketplaces to conduct account reviews and 
     file suspicious activity reports; consumable goods.--If an 
     operator of a physical or online retail marketplace is 
     presented with a suspected illegal sales activity form and 
     accompanying documentary evidence from an authorized person 
     showing that a transient vendor of the physical retail 
     marketplace, a user of the online retail marketplace, or a 
     director, officer, employee, or agent of the transient vendor 
     or user, has used or is using the retail marketplace to sell 
     or distribute items that were stolen, embezzled, or obtained 
     by fraud, false pretenses or other illegal means, or has 
     engaged in or is engaging in structuring, the operator 
     shall--
       ``(A)(i) not later than 30 days after receiving the form--
       ``(I) conduct a review of the account of the transient 
     vendor or user for evidence of illegal activity; and
       ``(II) file a suspicious activity report with the Attorney 
     General of the United States; and
       ``(ii) not later than 24 hours after filing the report 
     described in clause (i)(II), notify the authorized person who 
     submitted the suspected illegal sales activity form that the 
     operator filed the report; and
       ``(B) with regard to any items referred to in the suspected 
     illegal sales activity form that are consumable or that are 
     medical diagnostic tests, immediately suspend the ability of 
     any transient vendor or user who is referred to in the form 
     as selling or distributing the items to conduct transactions 
     involving the items, and notify the Attorney

[[Page S2478]]

     General of such action in the suspicious activity report.
       ``(3) Duties of operators of physical retail marketplaces 
     and online retail marketplaces to terminate sales activity.--
       ``(A) In general.--If an operator of a physical retail 
     marketplace or an online retail marketplace is presented with 
     a suspected illegal sales activity form and accompanying 
     documentary evidence from an authorized person, the operator 
     shall determine, based on the form, the documentary evidence, 
     and the account review conducted by the operator, whether 
     there is clear and convincing evidence that the transient 
     vendor of the physical retail marketplace, a user of the 
     online retail marketplace, or a director, officer, employee, 
     or agent of the transient vendor or user, has used or is 
     using the retail marketplace to sell or distribute items that 
     were stolen, embezzled, or obtained by fraud, false 
     pretenses, or other illegal means, or has engaged in or is 
     engaging in structuring. The operator shall describe the 
     determination of the operator under this subparagraph in the 
     suspicious activity report.
       ``(B) Actions.--If the operator of a physical retail 
     marketplace or an online retail marketplace determines that 
     there is clear and convincing evidence of an activity 
     described in subparagraph (A), the operator shall, not later 
     than 5 days after submitting the suspicious activity report 
     to the Attorney General pursuant to paragraph (2), either--
       ``(i) terminate the ability of the transient vendor to 
     conduct business at the physical retail marketplace or 
     terminate the ability of the user to conduct transactions on 
     the online retail marketplace, and notify the Attorney 
     General of such action; or
       ``(ii)(I) request that the transient vendor or user present 
     documentary evidence that the operator reasonably determines 
     to be clear and convincing showing that the transient vendor 
     or user has not used the retail marketplace to sell or 
     distribute items that were stolen, embezzled, or obtained by 
     fraud, false pretenses, or other illegal means, or has not 
     engaged in or is not engaging in structuring; and
       ``(II)(aa) if the transient vendor or user fails to present 
     the information within 30 days of the request, terminate the 
     ability of the transient vendor to conduct business at the 
     physical retail marketplace or terminate the ability of the 
     user to conduct transactions on the online retail 
     marketplace, and notify the Attorney General of such action; 
     or
       ``(bb) if the transient vendor or user presents the 
     information within 30 days, then the operator shall report 
     the information to the Attorney General and notify the 
     transient vendor or user that the operator will not terminate 
     the activities of the transient vendor or user.
       ``(C) Attorney general authorization.--The Attorney General 
     or a designee may, with respect to the timing of the 
     operator's actions pursuant to this paragraph, direct the 
     operator in writing and for good cause to delay such action.
       ``(4) Retention of records.--
       ``(A) Retail marketplaces.--Each operator of a physical 
     retail marketplace and each operator of an online retail 
     marketplace shall maintain--
       ``(i) a record of all suspected illegal sales activity 
     forms and accompanying documentary evidence presented to it 
     pursuant to this subsection for 3 years from the date the 
     operator received the form and evidence;
       ``(ii) a record of the results of all account reviews 
     conducted pursuant to this subsection, and any supporting 
     documentation, for 3 years from the date of the review; and
       ``(iii) a copy of any suspicious activity report filed with 
     the Attorney General pursuant to this subsection, and the 
     original supporting documentation concerning any report that 
     it files, for 3 years from the date of the filing.
       ``(B) Online retail marketplace.--Each operator of an 
     online retail marketplace shall maintain, for 3 years after 
     the date a user becomes a high volume seller, the name, 
     telephone number, e-mail address, valid physical postal 
     address, and any other identification information that the 
     operator receives about the high volume seller.
       ``(5) Confidentiality of reports.--No operator of a 
     physical retail marketplace or online retail marketplace, and 
     no director, officer, employee or agent of the operator, may 
     notify any individual or entity that is the subject of a 
     suspicious activity report or of an account review under 
     paragraph (2) of the fact that the operator filed the report 
     or performed the account review, or of any information 
     contained in the report or account review.
       ``(6) High volume sellers.--
       ``(A) Valid postal address.--An operator of an online 
     retail marketplace shall require each high volume seller to 
     provide the operator with a valid physical postal address.
       ``(B) Failure to provide.--
       ``(i) In general.--If a high volume seller has failed to 
     provide a valid physical postal address as required in this 
     paragraph, the operator of the online retail marketplace 
     shall, not later than 5 days after the failure to provide the 
     address, notify the user of its duty to provide a valid 
     physical postal address.
       ``(ii) Continued failure.--If a high volume seller has 
     failed to provide a valid physical postal address 15 days 
     after the date on which the operator of an online retail 
     marketplace provides notice under clause (i), the operator 
     shall--

       ``(I) terminate the ability of the user to conduct 
     transactions on marketplace; and
       ``(II) not later than 15 days after that date, file a 
     suspicious activity report with the Attorney General of the 
     United States.

       ``(C) Postal address.--If an authorized person submits to 
     the operator of a physical retail marketplace or online 
     retail marketplace a suspected illegal sales activity form 
     that alleges illegal activity on the part of a specific 
     transient vendor or user that is a high volume seller, the 
     operator shall, not later than 15 days after receiving the 
     form, provide the valid physical postal address of the high 
     volume seller to the authorized person.
       ``(7) Contents of suspicious activity reports.--The 
     Attorney General shall promulgate regulations establishing a 
     suspicious activity report form. Such regulations shall 
     require that a suspicious activity report submitted by an 
     operator to the Attorney General pursuant to paragraph (2) or 
     (6) shall contain, in a form to be determined by the Attorney 
     General, the following information:
       ``(A) The name, address, telephone number, and e-mail 
     address of the individual or entity that is the subject of 
     the report, to the extent known.
       ``(B) Any other information that is in the possession of 
     the operator filing the report regarding the identification 
     of the individual or entity that is the subject of the 
     report.
       ``(C) A copy of the suspected illegal sales activity form 
     and documentary evidence that led to the filing of a report 
     pursuant to paragraph (2).
       ``(D) A detailed description of the results of an account 
     review conducted pursuant to paragraph (2).
       ``(E) A statement of the determination the operator made 
     pursuant to paragraph (3)(A).
       ``(F) If the suspicious activity report is filed pursuant 
     to paragraph (6), a summary of the events that led the 
     operator to terminate the ability of the user to conduct 
     transactions on marketplace.
       ``(G) The signature of the operator.
       ``(H) Such other information as the Attorney General may by 
     regulation prescribe.
       ``(c) Voluntary Reports.--Nothing in this section prevents 
     an operator of a physical retail marketplace or online retail 
     marketplace from voluntarily reporting to a Federal, State, 
     or local government agency any suspicious activity that the 
     operator believes is relevant to the possible violation of 
     any law or regulation, provided that the operator also 
     complies with the requirements of this section.
       ``(d) Structuring.--No individual or entity shall engage in 
     structuring as defined in this section.
       ``(e) Enforcement by Attorney General.--
       ``(1) In general.--Any individual or entity who knowingly 
     commits a violation of, or knowingly fails to comply with, 
     the requirements specified in paragraph (2), (3), (4), (5), 
     or (6) of subsection (b) or subsection (d) shall be liable to 
     the United States Government for a civil penalty of not more 
     than $10,000 per violation.
       ``(2) False statements.--
       ``(A) Suspected illegal sales activity forms.--Any person 
     who knowingly and willfully makes any material false or 
     fictitious statement or representation on a suspected illegal 
     sales activity form or accompanying documentary evidence may, 
     upon conviction thereof, be subject to liability under 
     section 1001.
       ``(B) Suspicious activity report.--Any person who knowingly 
     and willfully makes any material false or fictitious 
     statement or representation in any suspicious activity report 
     required under subsection (b) may, upon conviction thereof, 
     be subject to liability under section 1001.
       ``(f) Enforcement by States.--
       ``(1) Civil action.--In any case in which the attorney 
     general of a State has reason to believe that an interest of 
     the residents of that State has been or is threatened or 
     adversely affected by any person or entity who has committed 
     or is committing a violation of this section, the attorney 
     general, official, or agency of the State, as parens patriae, 
     may bring a civil action on behalf of the residents of the 
     State in a district court of the United States of appropriate 
     jurisdiction--
       ``(A) to enjoin further violation of this section by the 
     defendant;
       ``(B) to obtain damages on behalf of the residents of the 
     State in an amount equal to the actual monetary loss suffered 
     by such residents; or
       ``(C) to impose civil penalties in the amounts specified in 
     subsection (e).
       ``(2) Written notice.--
       ``(A) In general.--The State shall serve prior written 
     notice of any civil action under paragraph (1) upon the 
     Attorney General of the United States, including a copy of 
     its complaint, except that if it is not feasible for the 
     State to provide such prior notice, the State shall serve 
     such notice immediately upon instituting such action.
       ``(B) Attorney general action.--Upon receiving a notice 
     respecting a civil action under subparagraph (A), the 
     Attorney General of the United States shall have the right--
       ``(i) to intervene in such action;
       ``(ii) upon so intervening, to be heard on all matters 
     arising therein; and
       ``(iii) to file petitions for appeal.
       ``(3) State powers preserved.--For purposes of bringing any 
     civil action under this

[[Page S2479]]

     subsection, nothing in this chapter shall prevent an attorney 
     general of a State from exercising the powers conferred on 
     the attorney general by the laws of the State to conduct 
     investigations or to administer oaths or affirmations or to 
     compel the attendance of witnesses or the production of 
     documentary and other evidence.
       ``(4) Pending federal action.--Whenever a civil action has 
     been instituted by the Attorney General of the United States 
     for violation of any rule prescribed under subsection (e), no 
     State may, during the pendency of such action instituted by 
     the Attorney General of the United States, institute a civil 
     action under this subsection against any defendant named in 
     the complaint in such action for any violation alleged in the 
     complaint.
       ``(5) Jurisdiction.--
       ``(A) In general.--Any civil action brought under this 
     subsection in a district court of the United States may be 
     brought in the district in which the defendant is found, is 
     an inhabitant, or transacts business or wherever venue is 
     proper under section 1391 of title 28.
       ``(B) Process.--Process in an action under this subsection 
     may be served in any district in which the defendant is an 
     inhabitant or in which the defendant may be found.
       ``(g) No Private Right of Action.--Nothing in this section 
     shall be interpreted to authorize a private right of action 
     for a violation of any provision of this section, or a 
     private right of action under any other provision of Federal 
     or State law to enforce a violation of this section.''.
       (b) Chapter Analysis.--The chapter analysis for chapter 113 
     of title 18, United States Code, is amended by inserting 
     after the item relating to section 2323 the following:

``Sec. 2324. Physical and online retail marketplaces.''.

     SEC. 5. NO PREEMPTION OF STATE LAW.

       No provision of this Act, including any amendment made by 
     this Act, shall be construed as indicating an intent on the 
     part of Congress to occupy the field in which that provision 
     or amendment operates, including criminal penalties, to the 
     exclusion of any State law on the same subject matter that 
     would otherwise be within the authority of the State, unless 
     there is a positive conflict between that provision or 
     amendment and that State law so that the 2 cannot 
     consistently stand together.

     SEC. 6. EFFECTIVE DATE.

       The amendments made by this Act take effect 120 days after 
     the date of enactment of this Act.
                                 ______