[Congressional Record Volume 157, Number 60 (Thursday, May 5, 2011)]
[Senate]
[Pages S2732-S2735]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LEAHY (for himself and Mr. Grassley):
  S. 890. A bill to establish the supplemental fraud fighting account, 
and for other purposes; to the Committee on the Judiciary.
  Mr. LEAHY. Mr. President, today, I am proud to join with Senator 
Grassley to introduce the Fighting Fraud to Protect Taxpayers Act of 
2011. Combating fraud is a vital issue on which Senator Grassley and I 
have a long track record of working together, and with great success. 
In these trying economic times, cracking down on the fraud which has 
harmed so many hardworking Americans is more important than ever. I 
look forward to working with Senator Grassley, and with Senators from 
both parties, to quickly pass this crucial legislation.
  In the last Congress, one of the first major bills the Senate 
Judiciary Committee considered, and one of the first bills President 
Obama signed into law, was the Leahy-Grassley Fraud Enforcement and 
Recovery Act. That bill gave fraud investigators and prosecutors 
additional tools and resources to better hold those who commit fraud 
accountable. We heard about the significant success that has already 
resulted from the Fraud Enforcement and Recovery Act and other key 
fraud fighting provisions we championed in a Judiciary Committee 
hearing earlier this year, but it is clear that our work is not done.
  In the past two years, we have learned much more about the scourges 
of financial fraud, mortgage fraud, government contracting fraud, 
health care fraud, and oil and gas fraud. I have also been very 
disturbed by the ongoing reports about inaccurate, forged, or 
fraudulent documents in the housing foreclosure process. Today's bill 
reflects the ongoing need to invest in enforcement to better protect 
hard-working taxpayers from all of these insidious types of fraud.
  In the last fiscal year alone, the Department of Justice recovered 
well over $6 billion through fines, penalties, and recoveries from 
fraud cases--far more than it costs to investigate and prosecute these 
matters. The recovery of these vast sums of money demonstrates that 
investment in fraud enforcement pays for itself many times over.
  The Fighting Fraud to Protect Taxpayers Act capitalizes on this rate 
of return by ensuring that a percentage of money recovered by the 
Government through fines and penalties in fraud cases and other 
criminal cases is reinvested in the investigation and prosecution of 
fraud cases. That means that we can ensure more fraud enforcement, more 
returns to the government, and more savings to taxpayers, all without 
spending new taxpayer money.
  The bill also makes other modest changes to ensure that prosecutors 
and investigators have the tools they need to combat fraud. It extends 
the international money laundering bill statute to tax evasion crimes. 
This will deter individuals from evading our tax laws by hiding their 
money overseas. It also protects American consumers from identity theft 
by strengthening the prohibition against trafficking in passwords and 
the federal identity theft statute. As more and more business is 
conducted online, we must ensure that consumers' personal information 
remains protected.
  The Secret Service has responsibility for investigating a variety of 
complex financial fraud crimes, including identity theft. This bill 
gives the Secret Service additional tools to conduct critical 
undercover investigations. Fraud cases are often complex and difficult 
to prove, so undercover investigations can be a key way to ferret out 
criminal activity.
  In the last Congress, Senator Grassley and I worked together to 
strengthen the False Claims Act, which empowers whistleblowers to shine 
a light on fraud and recover stolen tax dollars that would otherwise go 
undiscovered. These new laws are already paying off. Since January 
2009, the Department of Justice has recovered more than $6.8 billion in 
False Claims Act cases, far more than any other 2-year period. Today's 
legislation asks the Attorney General to report to Congress on False 
Claims Act settlements, which will help ensure that the False Claims 
Act remains a valuable tool for fighting fraud.
  Finally, the bill promotes accountability within Government. Along 
with requiring reporting, it takes modest steps to ensure that the 
resources already entrusted to the Justice Department are used 
responsibly by strengthening oversight of the Department's Working 
Capital Fund.
  Major fraud cases take time to investigate and prosecute. The renewed 
focus on fraud enforcement we have seen from this administration and 
from Congress will continue to yield significant results. But we must 
continue to give law enforcement agencies the tools and resources 
necessary to root out fraud so that they can continue to recoup losses 
and protect taxpayer funds. Everyday, taxpaying Americans deserve to 
know that their Government is doing all it can to hold responsible 
those who commit fraud and to prevent future fraud.
  Americans are worried about their budgets at home. We need to protect 
their investment in their government. Fighting fraud and protecting 
taxpayer dollars are issues Democrats and Republicans have worked 
together to address in the past, and in these difficult economic times, 
we need to continue in that spirit of bipartisanship. I look forward to 
working with Senator Grassley, the administration, and Senators of both 
parties to crack down on fraud by passing the Fighting Fraud to Protect 
Taxpayers Act.
  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. 890

       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 ``Fighting Fraud to Protect 
     Taxpayers Act of 2011''.

[[Page S2734]]

     SEC. 2. DEPARTMENT OF JUSTICE WORKING CAPITAL FUND REFORMS.

       Section 11013(a) of the 21st Century Department of Justice 
     Appropriations Authorization Act (28 U.S.C. 527 note) is 
     amended--
       (1) by striking ``Notwithstanding'' and inserting the 
     following:
       ``(1) Definitions.--In this subsection--
       ``(A) the term `covered amounts' means--
       ``(i) the unobligated balances in the debt collection 
     management account; and
       ``(ii) the unobligated balances in the supplemental fraud 
     fighting account;
       ``(B) the term `debt collection management account' means 
     the account established in the Department of Justice Working 
     Capital Fund under paragraph (2);
       ``(C) the term `fraud offense' includes--
       ``(i) an offense under section 30A of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78dd-1) and an offense under 
     section 104 or 104A of the Foreign Corrupt Practices Act of 
     1977 (15 U.S.C. 78dd-2 and 78dd-3);
       ``(ii) a securities fraud offense, as defined in section 
     3301 of title 18, United States Code;
       ``(iii) a fraud offense relating to a financial institution 
     or a federally related mortgage loan, as defined in section 3 
     of the Real Estate Settlement Procedures Act of 1974 (12 
     U.S.C. 2602), including an offense under section 152, 157, 
     1004, 1005, 1006, 1007, 1011, or 1014 of title 18, United 
     States Code;
       ``(iv) an offense involving procurement fraud, including 
     defective pricing, bid rigging, product substitution, misuse 
     of classified or procurement sensitive information, grant 
     fraud, fraud associated with labor mischarging, and fraud 
     involving foreign military sales;
       ``(v) an offense under the Internal Revenue Code of 1986 
     involving fraud;
       ``(vi) an action under subchapter III of chapter 37 of 
     title 31, United States Code (commonly known as the `False 
     Claims Act'), and an offense under chapter 15 of title 18, 
     United States Code;
       ``(vii) an offense under section 1029, 1030, or 1031 of 
     title 18, United States Code; and
       ``(viii) an offense under chapter 63 of title 18, United 
     States Code; and
       ``(D) the term `supplemental fraud fighting account' means 
     the supplemental fraud fighting account established in the 
     Department of Justice Working Capital Fund under paragraph 
     (3)(A).
       ``(2) Debt collection management account.--
     Notwithstanding'';
       (2) by striking ``Such amounts'' and inserting ``Subject to 
     paragraph (4), such amounts''; and
       (3) by adding at the end the following:
       ``(3) Supplemental fraud fighting account.--
       ``(A) Establishment.--There is established as a separate 
     account in the Department of Justice Working Capital Fund 
     established under section 527 of title 28, United States 
     Code, a supplemental fraud fighting account.
       ``(B) Crediting of amounts.--Notwithstanding section 3302 
     of title 31, United States Code, or any other statute 
     affecting the crediting of collections, the Attorney General 
     may credit, as an offsetting collection, to the supplemental 
     fraud fighting account up to 0.5 percent of all amounts 
     collected pursuant to civil debt collection litigation 
     activities of the Department of Justice.
       ``(C) Use of funds.--
       ``(i) In general.--Subject to clause (ii), the Attorney 
     General may use amounts in the supplemental fraud fighting 
     account for the cost (including equipment, salaries and 
     benefits, travel and training, and interagency task force 
     operations) of the investigation of and conduct of criminal, 
     civil, or administrative proceedings relating to fraud 
     offenses.
       ``(ii) Limitation.--The Attorney General may not use 
     amounts in the supplemental fraud fighting account for the 
     cost of the investigation of or the conduct of criminal, 
     civil, or administrative proceedings relating to--

       ``(I) an offense under section 30A of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78dd-1); or
       ``(II) an offense under section 104 or 104A of the Foreign 
     Corrupt Practices Act of 1977 (15 U.S.C. 78dd-2 and 78dd-3).

       ``(D) Conditions.--Subject to paragraph (4), amounts in the 
     supplemental fraud fighting account shall remain available 
     until expended and shall be subject to the terms and 
     conditions of the Department of Justice Working Capital Fund.
       ``(4) Maximum amount.--
       ``(A) In general.--There are rescinded all covered amounts 
     in excess of $175,000,000 at the end of fiscal year 2012 and 
     the end of each fiscal year thereafter.
       ``(B) Ratio.--For any rescission under subparagraph (A), 
     the Secretary of the Treasury shall rescind amounts from the 
     debt collection management account and the supplemental fraud 
     fighting account in a ratio of 6 dollars to 1 dollar, 
     respectively.
       ``(5) Annual report.--Not later than 6 months after the 
     date of enactment of the Taxpayer Protection and Fraud 
     Enforcement Act of 2011, and every year thereafter, the 
     Attorney General shall submit to Congress a report that 
     identifies, for the most recent fiscal year before the date 
     of the report--
       ``(A) the amount credited to the debt collection management 
     account and the amount credited to the supplemental fraud 
     fighting account from civil debt collection litigation, which 
     shall include, for each account--
       ``(i) a comprehensive description of the source of the 
     amount credited; and
       ``(ii) a list the civil actions and settlements from which 
     amounts were collected and credited to the account;
       ``(B) the amount expended from the debt collection 
     management account for civil debt collection, which shall 
     include a comprehensive description of the use of amounts in 
     the account that identifies the amount expended for--
       ``(i) paying the costs of processing and tracking civil and 
     criminal debt-collection litigation;
       ``(ii) financial systems;
       ``(iii) debt-collection-related personnel expenses;
       ``(iv) debt-collection-related administrative expenses; and
       ``(v) debt-collection-related litigation expenses;
       ``(C) the amounts expended from the supplemental fraud 
     fighting account and the justification for the expenditure of 
     such amounts; and
       ``(D) the unobligated balance in the debt collection 
     management account and the unobligated balance in the 
     supplemental fraud fighting account at the end of the fiscal 
     year.''.

     SEC. 3. REIMBURSEMENT OF COSTS AWARDED IN FALSE CLAIMS ACT 
                   PROSECUTIONS.

       Section 3729(a)(3) of title 31, United States Code, is 
     amended by adding at the end the following: ``Any costs paid 
     under this paragraph shall be credited to the appropriations 
     accounts of the executive agency from which the funds used 
     for the costs of the civil action were paid.''.

     SEC. 4. INTERLOCUTORY APPEALS OF SUPPRESSION OR EXCLUSION OF 
                   EVIDENCE.

       Section 3731 of title 18, United States Code, is amended in 
     the second undesignated paragraph by inserting ``Attorney 
     General, the Deputy Attorney General, an Assistant Attorney 
     General, or the'' after ``an indictment or information, if 
     the''.

     SEC. 5. EXTENSION OF INTERNATIONAL MONEY LAUNDERING STATUTE 
                   TO TAX EVASION CRIMES.

       Section 1956(a)(2)(A) of title 18, United States Code, is 
     amended--
       (1) by striking ``intent to promote--'' and inserting the 
     following: ``intent to--
       ``(i) promote''; and
       (2) by adding at the end the following
       ``(ii) engage in conduct constituting a violation of 
     section 7201 or 7206 of the Internal Revenue Code of 1986; 
     or''.

     SEC. 6. STRENGTHENING THE PROHIBITION AGAINST TRAFFICKING IN 
                   PASSWORDS.

       Section 1030(a)(6) of title 18, United States Code, is 
     amended--
       (1) in the matter preceding subparagraph (A), by inserting 
     ``protected'' before ``computer''; and
       (2) by striking ``, if--'' and all that follows and 
     inserting ``; or''.

     SEC. 7. CLARIFYING VENUE FOR FEDERAL MAIL FRAUD OFFENSES.

       (a) In General.--Section 3237(a) of title 18, United States 
     Code, is amended in the second undesignated paragraph by 
     adding before the period at the end the following: ``or in 
     any district in which an act in furtherance of the offense is 
     committed''.
       (b) Section Heading.--Section 3237 of title 18, United 
     States Code, is amended in the section heading by striking 
     ``begun'' and all that follows and inserting ``taking place 
     in more than one district''.
       (c) Table of Sections.--The table of sections for chapter 
     211 of title 18, United States Code, is amended by striking 
     the item relating to section 3237 and inserting the 
     following:

``3237. Offenses taking place in more than one district.''.

     SEC. 8. EXPANSION OF AUTHORITY OF SECRET SERVICE.

       Section 3056 of title 18, United States Code, is amended--
       (1) in subsection (b)--
       (A) in paragraph (1)--
       (i) by inserting ``641, 656, 657,'' after ``510,''; and
       (ii) by striking ``493, 657,'' and inserting ``493,''; and
       (B) in paragraph (3), by striking ``federally insured''; 
     and
       (2) by adding at the end the following:
       ``(h)(1) For any undercover investigative operation of the 
     United States Secret Service that is necessary for the 
     detection and prosecution of a crime against the United 
     States, the United States Secret Service may--
       ``(A) use amounts appropriated for the United States Secret 
     Service, including unobligated balances available from prior 
     fiscal years, to--
       ``(i) purchase property, buildings, and other facilities 
     and lease space within the United States (including the 
     District of Columbia and the territories and possessions of 
     the United States), without regard to sections 1341 and 3324 
     of title 31, section 8141 of title 40, and sections 3901, 
     4501 through 4506, 6301, and 6306(a) of title 41; and
       ``(ii) establish, acquire, and operate on a commercial 
     basis proprietary corporations and business entities as part 
     of the undercover investigative operation, without regard to 
     sections 9102 and 9103 of title 31;
       ``(B) deposit in banks and other financial institutions 
     amounts appropriated for the United States Secret Service, 
     including unobligated balances available from prior fiscal 
     years, and the proceeds from the undercover investigative 
     operation, without regard to section 648 of this title and 
     section 3302 of title 31; and

[[Page S2735]]

       ``(C) use the proceeds from the undercover investigative 
     operation to offset necessary and reasonable expenses 
     incurred in the undercover investigative operation, without 
     regard to section 3302 of title 31.
       ``(2) The authority under paragraph (1) may be exercised 
     only upon a written determination by the Director of the 
     United States Secret Service (in this subsection referred to 
     as the `Director') that the action being authorized under 
     paragraph (1) is necessary for the conduct of an undercover 
     investigative operation. A determination under this paragraph 
     may continue in effect for the duration of an undercover 
     investigative operation, without fiscal year limitation.
       ``(3) If the Director authorizes the proceeds from an 
     undercover investigative operation to be used as described in 
     subparagraph (B) or (C) of paragraph (1), as soon as 
     practicable after the proceeds are no longer necessary for 
     the conduct of the undercover investigative operation, the 
     proceeds remaining shall be deposited in the general fund of 
     the Treasury as miscellaneous receipts.
       ``(4) As early as the Director determines practicable 
     before the date on which a corporation or business entity 
     established or acquired under paragraph (1)(A)(ii) with a net 
     value of more than $50,000 is to be liquidated, sold, or 
     otherwise disposed of, the Director shall notify the 
     Secretary of Homeland Security regarding the circumstances of 
     the corporation or business entity and the liquidation, sale, 
     or other disposition. The proceeds of the liquidation, sale, 
     or other disposition, after obligations are met, shall be 
     deposited in the general fund of the Treasury as 
     miscellaneous receipts.
       ``(5)(A) The Director shall--
       ``(i) on a quarterly basis, conduct detailed financial 
     audits of closed undercover investigative operations for 
     which a written determination is made under paragraph (2); 
     and
       ``(ii) submit to the Secretary of Homeland Security a 
     written report of the results of each audit conducted under 
     clause (i).
       ``(B) On the date on which the budget of the President is 
     submitted under section 1105(a) of title 31 for each year, 
     the Secretary of Homeland Security shall submit to the 
     Committee on Appropriations of the Senate and the Committee 
     on Appropriations of the House of Representatives a report 
     summarizing the audits conducted under subparagraph (A)(i) 
     relating to the previous fiscal year.''.

     SEC. 9. FALSE CLAIMS SETTLEMENTS.

       (a) Reports by Attorney General.--Not later than November 1 
     of each year, the Attorney General shall submit to the 
     Committee on the Judiciary of the Senate and the Committee on 
     the Judiciary of the House of Representatives a report that 
     describes each settlement or compromise of any claim, suit, 
     or other action entered into with the Department of Justice 
     that--
       (1) relates to an alleged violation of section 1031 of 
     title 18, United States Code, or section 3729 of title 31, 
     United States Code (including all settlements of alternative 
     remedies); and
       (2) results from a claim for damages of more than $100,000.
       (b) Contents of Reports.--The description of each 
     settlement or compromise required to be included in an annual 
     report under subsection (a) shall include--
       (1) the total amount of the settlement or compromise and 
     the portions of the settlement attributable to violations of 
     various statutory authorities;
       (2) the amount of actual damages, or if the amount of 
     actual damages is not available a good faith estimate of the 
     damages, that have been sustained and the minimum and maximum 
     potential civil penalties that may be incurred as a 
     consequence of the conduct of the defendant that is the 
     subject of the settlement or compromise;
       (3) the basis for any estimate of damages sustained and the 
     potential civil penalties incurred;
       (4) the amount of the settlement that represents damages 
     and the multiplier or percentage of the actual damages used 
     in determining the amount to be paid under the settlement or 
     compromise;
       (5) the amount of the settlement that represents civil 
     penalties and the percentage of the maximum potential civil 
     penalty to be paid under the settlement or compromise;
       (6) the amount of the settlement that represents criminal 
     fines and a statement of the basis for the fines;
       (7) a description of the period during which the matter to 
     which the settlement or compromise relates was pending, 
     including--
       (A) the date on which the complaint was originally filed;
       (B) a description of the period the matter remained under 
     seal;
       (C) the date on which the Department of Justice determined 
     whether to intervene in the case; and
       (D) the date on which the settlement or compromise was 
     finalized;
       (8) whether a defendant or any division, subsidiary, 
     affiliate, or related entity of a defendant had previously 
     entered into a settlement or compromise relating to section 
     1031 of title 18, United States Code, or section 3730(b) of 
     title 31, United States Code, and, if so, the date of and 
     amount to be paid under each such settlement or compromise;
       (9) whether a defendant or any division, subsidiary, 
     affiliate, or related entity of a defendant--
       (A) entered into a corporate integrity agreement relating 
     to the settlement or compromise;
       (B) entered into a deferred prosecution agreement or 
     nonprosecution agreement relating to the settlement or 
     compromise; or
       (C)(i) previously entered into--
       (I) a corporate integrity agreement relating to a 
     settlement or compromise relating to a different violation of 
     section 3730(b) of title 31, United States Code; or
       (II) a deferred prosecution agreement or nonprosecution 
     agreement relating to a settlement or compromise relating to 
     a different violation of section 1031 of title 18, United 
     States Code; and
       (ii) if the defendant had entered an agreement described in 
     clause (i), whether the agreement applied to the conduct that 
     is the subject of the settlement or compromise described in 
     the report or similar conduct;
       (10) for a settlement involving Medicaid, the amounts paid 
     to the Federal Government and to each State participating in 
     the settlement or compromise;
       (11) whether civil investigative demands were issued in 
     process of investigating the matter to which the settlement 
     or compromise relates;
       (12) for a qui tam action--
       (A) the percentage of the settlement amount awarded to the 
     relator; and
       (B) whether the relator requested a fairness hearing 
     relating to the percentage received by the relator or the 
     total amount of the settlement;
       (13) the extent to which officers of the agency that was 
     the victim of the loss resolved by the settlement or 
     compromise participated in the settlement negotiations; and
       (14) the extent to which a relator or counsel for a 
     relators participated in the settlement negotiations.

     SEC. 10. AGGRAVATED IDENTITY THEFT AND FRAUD.

       (a) In General.--Section 1028A of title 18, United States 
     Code, is amended in the section heading by adding ``and 
     fraud'' at the end.
       (b) Technical and Conforming Amendment.--The table of 
     sections for chapter 47 of title 18, United States Code, is 
     amended by striking the item relating to section 1028A and 
     inserting the following:

``1028A. Aggravated identity theft and fraud.''.

     SEC. 11. FRAUD AND RELATED ACTIVITY IN CONNECTION WITH 
                   IDENTIFICATION DOCUMENTS, AUTHENTICATION 
                   FEATURES, AND INFORMATION.

       (a) In General.--Section 1028(a)(7) of title 18, United 
     States Code, is amended by inserting ``(including an 
     organization)'' after ``person''.
       (b) Technical and Conforming Amendment.--The table of 
     sections for chapter 47 of title 18, United States Code, is 
     amended by striking the item relating to section 1028 and 
     inserting the following:

``1028. Fraud and related activity in connection with identification 
              documents, authentication features, and information.''.
                                 ______