[Congressional Record (Bound Edition), Volume 152 (2006), Part 9]
[House]
[Pages 11881-11883]
[From the U.S. Government Publishing Office, www.gpo.gov]




EMERGENCY AND DISASTER ASSISTANCE FRAUD PENALTY ENHANCEMENT ACT OF 2005

  Mr. SENSENBRENNER. Mr. Speaker, I move to suspend the rules and pass 
the bill (H.R. 4356) to amend title 18, United States Code, with 
respect to fraud in connection with major disaster or emergency funds.
  The Clerk read as follows:

                               H.R. 4356

       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 2005''.

     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. 1039. 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 
     Disaster Relief Act of 1974, or an emergency declaration 
     under section 501 of the Disaster Relief Act of 1974, or in 
     connection with any procurement of property or services 
     related to any emergency or 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 for not more than 30 years, or both.
       ``(b) The circumstance to which subsection (a) of this 
     section refers is that--
       ``(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, 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 inserting 
     at the end the following new item:

``1039. 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, transported, transmitted, transferred, disbursed, 
     or paid in connection with, a presidentially declared major 
     disaster or emergency, 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, 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 5170 of title 
     42, United States Code, or an emergency declaration under 
     section 5191 of title 42, United States Code; and
       (2) submit to the Committees on the Judiciary of the United 
     States Congress 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 the 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 
Wisconsin (Mr. Sensenbrenner) and the gentleman from Virginia (Mr. 
Scott) each will control 20 minutes.
  The Chair recognizes the gentleman from Wisconsin.


                             General Leave

  Mr. SENSENBRENNER. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks and include extraneous material on H.R. 4356 currently 
under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Wisconsin?
  There was no objection.
  Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise in support of H.R. 4356, the Emergency and 
Disaster Assistance Fraud Penalty Enhancement Act of 2005. Since 
Hurricanes Katrina and Rita last year, Congress has provided more than 
$68 billion in relief to the region, including funding for human 
services like unemployment, housing assistance, and crisis counseling. 
In addition, charities like the Red Cross and the Salvation Army have 
contributed more than $5 billion to relief efforts.
  With such vast resources put into the pipeline so quickly, fraudsters 
and scam artists went into high gear in an effort to take advantage of 
these government programs as well as the generosity of the American 
people contributing to nongovernment organizations.

[[Page 11882]]

  Earlier this month, the United States Government Accountability 
Office testified that the Federal Emergency Management Agency paid an 
estimated $600 million to $1.4 billion in improper and potentially 
fraudulent disaster assistance claims in the aftermath of Hurricanes 
Katrina and Rita.
  GAO also reported examples of the types of disaster assistance crimes 
typically perpetrated on the American taxpayer. In one common scam, 
FEMA provided millions of dollars of rental assistance to cover a 
thousand individuals who used the names and Social Security numbers of 
prison inmates to obtain benefits.
  In another instance, 750 debit cards, containing more than $1.5 
million in disaster assistance funds, were provided to individuals who 
were not actual victims of the storms. GAO determined that some of 
these funds were used to procure things like diamond jewelry, Caribbean 
vacations, professional football tickets, and divorce lawyer services. 
In another case, FEMA paid $139,000 in fraudulent claims so that an 
individual who used 13 different Social Security numbers could obtain 
benefits.
  To its credit, the Department of Justice has responded quickly to the 
problem. In September 2005, the Attorney General established a 
Hurricane Katrina Fraud Task Force, which includes DOJ, Homeland 
Security, Treasury, the FBI, Federal Trade Commission, and other 
Federal partners, as well as representatives of State and local law 
enforcement. Since its formation, 24 United States attorneys have 
charged 261 people in 218 cases with various criminal activities, and 
have obtained so far 44 guilty pleas or convictions.
  Despite these efforts, it is clear the current criminal penalties are 
insufficient to deter disaster fraud. In March 2006 alone, DOJ 
announced 17 new indictments and four guilty pleas for Katrina- and 
Rita-related disaster fraud. In May of this year, the United States 
Attorney for the Middle District of Florida charged 26 people with 
similar acts of fraud.
  To enhance Federal law enforcement's ability to combat and deter 
disaster fraud, this bill contains the following substantive 
provisions: first, the bill creates a new Federal crime to prohibit 
fraud in connection with any emergency or disaster relief, including 
Federal assistance or private charitable contributions, as long as the 
benefit was authorized or paid in interstate commerce, transported 
through the mail, or is anything of value to the United States. 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 statute to 
add emergency or disaster benefits fraud to the 30-year maximum 
penalties in those statutes. Currently, the 30-year maximum is reserved 
only for cases involving fraud against financial institutions.
  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 Judiciary 
Committees of Congress.
  Mr. Speaker, I urge my colleagues to support this important antifraud 
and protaxpayer legislation.
  I reserve the balance of my time.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield myself such time as I may 
consume, and I rise in support of H.R. 4356, the Emergency and Disaster 
Assistance Fraud Penalty Enhancement Act of 2005.
  In the aftermath of Hurricane Katrina, we were all appalled to learn 
of the rampant schemes of fraudulent benefiting of government funding 
intended for victims of the disasters. While these crimes are now being 
prosecuted under existing fraud laws, I believe that the crime warrants 
specific and enhanced emphasis to put on notice those who would take 
criminal advantage of the government's need to focus on speed and 
comprehensive assistance in times of disasters and emergencies. This 
bill would establish the specific crime of fraud in connection with 
major disaster or emergency benefits and increases the penalties 
currently available for such acts.
  Recognizing the particular egregiousness of fraud claims surrounding 
emergencies like Hurricane Katrina, the bill also directs the U.S. 
Sentencing Commission to increase penalties under the sentencing 
guidelines for those individuals who would fraudulently seek to benefit 
from funding intended for victims of natural disasters and 
Presidentially declared emergencies.
  While I generally do not support specific directives to the 
Sentencing Commission to increase penalties for crimes, I believe this 
particular category of crime is egregious enough to warrant more 
punishment than fraud in general, with appropriate considerations for 
mitigating and aggravating circumstances.
  Mr. Speaker, I am in favor, as we all are, of seeing increased 
benefits being made available for victims of disasters such as 
Hurricane Katrina. Many have lost everything and are now without a 
permanent home or compensation for their losses. Many are still not 
able to return to the area. Many still need ongoing assistance.
  We can all agree that the limited disaster and emergency benefits 
that are made available to victims should only go to legitimate 
victims, not to scam artists or cheats who recognize that humanitarian 
concerns in the middle of a disaster require a waiver of traditional 
checks and balances in favor of speed and getting the relief to the 
suffering victims. Those who cheat and scheme at these times deserve 
more punishment.
  Accordingly, I am supportive of this legislation, and I urge my 
colleagues to support the bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SENSENBRENNER. Mr. Speaker, I yield 3 minutes to the gentleman 
from Texas (Mr. McCaul).
  Mr. McCAUL of Texas. I thank the gentleman for his leadership on 
this, and, Mr. Speaker, I rise today in support of this important piece 
of legislation that will work to deter fraud in the wake of disasters 
like Hurricanes Katrina and Rita.
  Disaster assistance fraud is something I have been fighting for quite 
some time now. I recently held a hearing in the Homeland Security 
Investigation Subcommittee to uncover the findings of a 6-month fraud 
investigation by the GAO. What they found was nothing short of 
shocking.
  The GAO testified before my subcommittee that FEMA disaster 
assistance after Hurricanes Katrina and Rita was applied for and 
received by criminals who used deceased individuals' identities, and 
even a cemetery as an address to receive the emergency funding. Federal 
investigators also testified that prisoners in jail before the 
hurricanes were able to receive almost $11 million from their jail 
cells by fraudulently applying for the FEMA disaster assistance funds.
  The total price tag for the fraud committed after Hurricanes Katrina 
and Rita is not yet known; but GAO investigators have testified that it 
will, at the very least, be in the billions of dollars. This is an 
insult to the victims of these natural disasters and an insult to the 
ultimate victim, the American taxpayer.
  Through this investigation, we have referred over 7,000 fraud cases 
to the Department of Justice Task Force for prosecution, and this 
legislation will ensure that they receive the harshest penalty for 
their actions.
  It saddens me to think about the gulf coast families that could have 
used this money to rebuild their homes and their lives. We need to make 
sure that these disaster victims and the American taxpayer are never 
robbed like this again. This legislation is a great first step in 
making that happen, and I strongly urge my colleagues to vote for the 
Emergency and Disaster Assistance Fraud Penalty Enhancement Act.
  Mr. SCOTT of Virginia. Mr. Speaker, I yield back the balance of my 
time.
  Mr. SENSENBRENNER. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Wisconsin (Mr. Sensenbrenner) that the House suspend the 
rules and pass the bill, H.R. 4356.

[[Page 11883]]

  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

                          ____________________