[Senate Report 110-66]
[From the U.S. Government Publishing Office]
Calendar No. 148
110th Congress Report
SENATE
1st Session 110-66
======================================================================
WAR PROFITEERING PREVENTION ACT OF 2007
_______
Mr. Leahy, from the Committee on Judiciary, submitted the following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany S. 119]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to which was referred the
bill (S. 119) to prohibit profiteering and fraud relating to
military action, relief, and reconstruction efforts, and for
other purposes, reports favorably thereon with amendments, and
recommends that the bill, as amended, do pass.
CONTENTS
Page
I. Purpose of the War Profiteering Prevention Act of 2007...........1
II. History of the Bill and Committee Consideration..................4
III. Section-by-Section Summary of the Bill...........................5
IV. Cost Estimate....................................................6
V. Regulatory Impact Evaluation.....................................7
VI. Conclusion.......................................................7
VII. Additional Views of Senator Sessions.............................7
VIII.Changes in Existing Law Made by the Bill as Reported............10
I. Purpose of the War Profiteering Prevention Act of 2007
Chairman Patrick Leahy introduced the War Profiteering
Prevention Act of 2007 on January 4, 2007, which was
cosponsored by Senators Bingaman, Kerry, Harkin, Rockefeller,
Dorgan, Wyden, Schumer, Nelson of Florida, Clinton, Lautenberg,
and Menendez. Senators Feinstein, Feingold, Durbin, Landrieu,
Mikulski, Boxer, Cardin, and Byrd have since joined as
cosponsors. This legislation strengthens the tools available to
federal law enforcement to combat contracting fraud during
times of war, military action, or relief or reconstruction
activities. This legislation also extends the extraterritorial
jurisdiction for these frauds to the full extent of the law in
order to reach fraudulent conduct wherever it occurs.
The legislation creates a new criminal fraud offense in
title 18 of the United States Code to prohibit fraudulent acts
involving the provision of goods or services in connection with
a war, military action, or relief or reconstruction activities.
It also makes this new offense a predicate crime for criminal
and civil forfeiture, as well as for federal money laundering
and racketeering offenses.
A. BACKGROUND
Efforts to combat war profiteering have a long history in
this nation. During the Civil War, President Abraham Lincoln
fought against war profiteers, denouncing them as ``worse than
traitors.'' He signed the first civil laws curbing this abuse.
In World War II, President Franklin Delano Roosevelt spoke
out against ``war millionaires'' who made excessive profits
exploiting the calamity of war. President Harry Truman, when he
served in the Senate, held historic public hearings to expose
gross fraud, waste and abuse by military contractors.
Over the past four years, war profiteering has again
plagued this nation during the engagement of U.S. forces in
Iraq and Afghanistan. The United States has devoted hundreds of
billions of dollars to military, relief, and reconstruction
activities in Iraq and Afghanistan, including more than $50
billion to relief and reconstruction activities. Private
contractors have been used to a greater extent during these
war-time activities than at any time in our history. The
exigencies of war overseas, however, often make oversight of
these contractors more difficult, and expenditures are often
made with fewer audit and other controls than during normal
government procurement. As a result, the provision of goods and
services during these military actions, as well as during
relief and reconstruction activities, are more vulnerable to
acts of fraud and abuse.
Inspectors General overseeing the provision of goods and
services in Iraq and Afghanistan have found that billions of
dollars spent in Iraq are unaccounted for and may have been
lost to fraud or other misconduct. These Inspectors General
have opened hundreds of investigations into fraud, waste, and
abuse in Iraq, Kuwait, and Afghanistan involving, among other
things, illegal kickbacks, bid-rigging, embezzlement, and
fraudulent over-billing. These investigations have uncovered
crimes committed by employees of large and small government
contractors in Iraq and Afghanistan, and many of these
investigations involve abuse of the ``cost-plus'' and ``no-
bid'' contracts used during times of emergency, such as
military, relief, or reconstruction activities.
B. NEED FOR LEGISLATION
There is no federal criminal law specifically targeted at
prohibiting contracting fraud during times of war, military
action, or relief or reconstruction activities. The current
regime of federal fraud statutes does not provide an offense
for those who take advantage of the exigent circumstances
created by these times of extreme emergency. Moreover, no
federal law provides enhanced criminal punishment for
fraudulent acts during times of war, or relief or
reconstruction activities.
In addition, none of the current fraud statutes explicitly
extend extraterritorial jurisdiction for fraud offenses during
times of war, military action, or relief or reconstruction
activities. While in some cases courts have implied
extraterritorial jurisdiction for fraud offenses, the common
law suggests that extraterritoriality in a criminal statute
should be clearly asserted and, without such a provision, there
is a presumption against extraterritorial application. This
bill addresses all of these gaps in existing federal criminal
law.
C. THE WAR PROFITEERING PREVENTION ACT OF 2007
The War Profiteering Prevention Act of 2007 creates a new
criminal offense in title 18 of the United States Code for
fraudulent acts involving contracts or the provision of goods
and services in connection with war, military actions, and
relief or reconstruction activities. This new offense provides
a significant new tool for federal law enforcement, as well as
creating a strong deterrent to those who would contemplate
exploiting the exigencies of war, military actions, relief or
reconstruction activities to commit fraud and profit thereby.
The new offense may be committed in two ways: (1) by
committing fraud or (2) by making a materially false statement.
The fraud provisions would make it a crime to execute or
attempt to execute a scheme or artifice to defraud the United
States or to materially overvalue any good or service with the
specific intent to defraud. These provisions are designed to
prohibit schemes to defraud the United States, including
efforts to exploit ``cost plus'' or ``no-bid'' contracts by
materially overvaluing goods or services with the specific
intent to defraud. These provisions are not intended to
prohibit or punish contractors providing goods or services in
the normal course of business, and the legislation specifically
requires that violators may only be criminally liable if they
materially overvalue any good or service ``with the specific
intent to defraud.'' This provision has been included to ensure
that no contractor shall be prosecuted under this offense for
mere negligent or mistaken conduct.
The material false statement provisions would make it a
crime (1) to falsify, conceal, or covering up by any trick,
scheme or device a material fact, or (2) to make any materially
false, fictitious, or fraudulent statements or representations,
or (3) to make or use any materially false writing or document
knowing they contain a false, fictitious, or fraudulent
statement. This language is consistent with other material
false statement provisions under federal law, such as 18 U.S.C.
Sec. Sec. 1001, 1035. The new offense also requires that
conduct be done knowingly and willfully to be a criminal
violation.
The new offense would require that any fraud or material
false statement be in connection with any war, military action,
or relief or reconstruction activities. This would include
circumstances where war was declared, or where the executive
branch was engaged in any military action with or without
congressional authorization. This would also include relief or
reconstruction activities, whether or not a war or military
action was undertaken. This new offense is intended to deter
fraud and material false statements committed in connection to
any of these emergency circumstances.
The new offense also requires that the conduct be subject
to the jurisdiction of the United States. This term is to be
interpreted broadly consistent with the jurisdictional scope of
the federal material false statement statute, 18 U.S.C.
Sec. 1001. In addition, the new offense explicitly provides
extraterritorial jurisdiction and is intended to extend
jurisdiction for this offense to the full extent of U.S. law.
This provision has been included to ensure that offenses
occurring outside the United States, even by non-U.S.
nationals, may be prosecuted. Furthermore, consistent with
other federal fraud provisions, the U.S. Government need not be
a victim or suffer a loss from this offense provided the
conduct meets the other elements of the offense. The bill also
establishes venue for the offense as authorized by existing
federal statutes (see 18 U.S.C. Sec. Sec. 3231-3244) including
extradition, or in any district where any act in further of the
offense took place, or where any party to the contract or the
provider of goods or services is located.
Violations of the fraud provisions in this bill would be
punishable by imprisonment for up to 20 years, and violations
of the material false statement provisions would be punishable
by imprisonment for up to 10 years. All violations of this new
offense would be subject to fines of up to $1,000,000 or twice
the gross profits or other proceeds of the offense. The offense
provides for criminal and civil forfeiture of any unlawful
proceeds, and makes the new offense a predicate crime for money
laundering (18 U.S.C. Sec. 1956(c)(7)) and for racketeering
offenses (18 U.S.C. Sec. 1961(1)).
II. History of the Bill and Committee Consideration
A. HEARING
On March 20, 2007, the Judiciary Committee held a hearing
on ``Combating War Profiteering: Are We Doing Enough to
Investigate and Prosecute Contracting Fraud and Abuse in
Iraq?'' which examined the War Profiteering Prevention Act of
2007 and ongoing efforts to investigate and prosecute
contracting fraud in Iraq. At the hearing, the Special
Inspector General for Iraq Reconstruction, Stuart W. Bowen,
Jr., and the Acting Inspector General for the Department of
Defense, Thomas F. Gimble, testified concerning their ongoing
investigations of contracting fraud and abuse in Iraq and
Afghanistan. The Inspectors General testified that fraud and
abuse during the military actions and relief and reconstruction
activities in Iraq and Afghanistan remain a serious problem,
and they reported on their investigations of criminal conduct
involving illegal kickbacks, bid-rigging, embezzlement, and
fraudulent over-billing. Special Inspector General Bowen
confirmed that billions in cash transferred to Iraq remained
unaccounted for and may be lost to fraud and abuse. Both
Inspectors General indicated that they would support more tools
to combat contracting fraud in Iraq, Afghanistan, and Kuwait.
At the hearing, Deputy Assistant Attorney General for the
Criminal Division at the Department of Justice Barry Sabin also
testified concerning efforts by the Department to investigate
and prosecute contracting fraud in Iraq. He confirmed that, in
the four years since the start of military action in Iraq, the
Justice Department had prosecuted 9 cases involving 25
individuals, and these cases involved fraud of approximately
$10 million.
B. LEGISLATIVE HISTORY
On September 30, 2003, Senator Leahy offered the War
Profiteering Prevention Act of 2003 as an amendment to the Iraq
emergency supplemental appropriations bill (S. 1689), and the
amendment was accepted by the Senate Appropriations Committee,
incorporated into the bill, and reported to the Senate. On
October 17, 2003, the Senate passed S. 1689, as amended with
the War Profiteering Prevention Act; however, the provision was
deleted from the bill in conference. On November 3, 2003,
Senator Leahy reintroduced the bill (S.1813), the bill was
referred to the Judiciary Committee and, on November 19, 2003,
it was also referred to the Foreign Relations Committee, but no
further action was taken by either committee.
On March 2, 2006, Senator Leahy introduced the War
Profiteering Prevention Act of 2006 (S. 2356). The bill was
referred to the Committee on the Judiciary, but no further
action was taken. Provisions of the bill were also incorporated
in the Honest Leadership and Accountability in Contracting Act
of 2006 (S. 2361). That bill was referred to the Committee on
Homeland Security and Governmental Affairs, but no further
action was taken.
On January 4, 2007, Senator Leahy and cosponsors introduced
the War Profiteering Prevention Act of 2007 (S. 119). The bill
currently has 20 cosponsors: Senators Leahy, Bingaman, Kerry,
Harkin, Rockefeller, Dorgan, Wyden, Schumer, Nelson of Florida,
Clinton, Lautenberg, Menendez, Feinstein, Feingold, Durbin,
Landrieu, Mikulski, Boxer, Cardin, and Byrd. After the hearing
on March 20, 2007, the bill was placed on the agendas for
business meetings of the Committee on March 22, March 29, April
12 and April 25. It was considered by the Committee on April
25, 2007. During that consideration, Senator Leahy offered an
amendment to clarify language related to one of the fraud
provisions by striking certain language \1\ and to add the new
violation as a predicate offense for federal racketeering. The
Committee agreed by unanimous consent to the amendment and to
report the bill favorably to the Senate.\2\
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\1\ The amendment struck the words ``and excessively profit from
the war, military action, or relief or reconstruction activities'' from
Section 1039(a)(1)(A)(ii).
\2\ Senator Kyl considered offering two amendments related to
material support for terrorism and enhanced penalties for crimes
committed outside the United States, but he agreed to proceed to report
the bill without amendment and to introduce his amendments as separate
bills.
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III. Section-by-Section Summary of the Bill
Sec. 1. Short Title. This section provides that the
legislation may be cited as the ``War Profiteering Prevention
Act of 2007.''
Sec. 2. Prohibition of Profiteering. This provision creates
a new criminal offense to be added to Title 18 of the United
States Code, as Section 1039.\3\ This offense would make it a
crime for any person to commit fraud or make material false
statements involving a contract or the provision of goods or
services in connection with a war, military action, relief or
reconstruction activities. The fraud offense may be committed
either by executing or attempting to execute a scheme or
artifice to defraud the United States or by materially
overvaluing any good or service with the specific intent to
defraud. The material false statement offense may be committed
by falsifying, concealing, or covering up any material fact, by
making a materially false statement, document, or writing.
Violations of the fraud provisions would be imprisoned for up
to 20 years; violations of the material false statement
provisions would be imprisoned for up to 10 years. All
violations of this provision could be also be punished with a
fine of up to $1,000,000 or twice the gross profits or other
proceeds of the offense. The statute asserts extraterritorial
jurisdiction for this offense and establishes venue for the
offense as authorized by current U.S. law, or in any district
where any act in furtherance of the offense took place, or
where any party to the contract or the provider of goods or
services is located. The offense provides for criminal and
civil forfeiture of any unlawful proceeds, and makes the new
offense a predicate crime for money laundering and racketeering
offenses.
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\3\ After S. 119 was introduced, Pub. L. 109-476 was signed into
law and created a Section 1039 in Title 18. A technical amendment will
be offered once this bill is considered by the full Senate to correct
this problem.
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IV. Congressional Budget Office Cost Estimate
May 2, 2007.
Hon. Patrick J. Leahy,
Chairman, Committee on the Judiciary,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 119, the War
Profiteering Prevention Act of 2007.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Mark
Grabowicz.
Sincerely,
Peter R. Orszag.
Enclosure.
S. 119--War Profiteering Prevention Act of 2007
CBO estimates that implementing S. 119 would have no
significant cost to the federal government. Enacting the bill
could affect direct spending and revenues, but CBO estimates
that any such effects would not be significant. S. 119 contains
no intergovernmental or private-sector mandates as defined in
the Unfunded Mandates Reform Act and would impose no costs on
state, local, or tribal governments.
S. 119 would make it a federal crime to commit fraudulent
acts while providing goods or services for a U.S. military
action, or relief or reconstruction activities. Because the
bill would establish a new offense, the government would be
able to pursue cases that it otherwise would not be able to
prosecute. We expect that S. 119 would apply to a relatively
small number of offenders, so any increase in costs for law
enforcement, court proceedings, or prison operations would not
be significant. Any such costs would be subject to the
availability of appropriated funds.
Because those prosecuted and convicted under S. 119 could
be subject to criminal fines, the federal government might
collect additional fines if the legislation is enacted.
Criminal fines are recorded as revenues, then deposited in the
Crime Victims Fund, and later spent. CBO expects that any
additional revenues and direct spending would not be
significant because of the small number of cases likely to be
affected.
Persons prosecuted and convicted under the bill also could
be subject to the seizure of certain assets by the federal
government. Proceeds from the sale of such assets would be
deposited into the Assets Forfeiture Fund and spent from that
fund, mostly in the same year. Thus, enacting S. 119 could
increase both revenues deposited into the fund and direct
spending from the fund. However, CBO estimates that any
increased revenues or spending would be negligible.
Estimate prepared by: Federal costs: Mark Grabowicz.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
V. Regulatory Impact Evaluation
In compliance with rule XXVI of the Standing Rules of the
Senate, the Committee finds that no significant regulatory
impact will result from the enactment of S. 119.
VI. Conclusion
Passage and enactment of the War Profiteering Act of 2007,
S. 119, will give federal law enforcement a potent new tool to
combat fraudulent acts during times of war, military action, or
relief or reconstruction activities. This legislation will
create a new criminal offense to deter and punish those who
take advantage of the exigencies of war, military actions, or
relief or reconstruction activities to commit fraud.
VI. Additional Views of Senator Sessions
This legislation deals with two issues that are very
important to me: contractor fraud in Iraq and disaster relief
fraud. It will ensure that those who commit fraud against the
United States by fraudulently obtaining war or emergency
disaster relief funds will be brought to justice.
The Chairman and I have worked together in past years to
pass legislation to ensure that crimes and frauds perpetrated
in Iraq or in other places overseas are rightly brought to
justice here in the United States. I am glad to be working with
him again to make sure we give the Department of Justice all
the tools they need to bring contractors who commit fraud to
justice.
THE MILITARY EXTRATERRITORIAL JURISDICTION ACT
I first looked into this issue almost a decade ago. In
1999, one of my constituents approached me with a horrifying
story of how two innocent children were molested while living
overseas with their father, an Army serviceman. Because the
perpetrator committed this despicable act overseas, he was
beyond the scope of jurisdiction in the United States.
Moreover, German law did not allow for prosecution.
Immediately after hearing this story, I began working to
introduce the Military Extraterritorial Jurisdiction Act
(``MEJA''), which was signed into law in 2000. The Chairman was
an original cosponsor of my bill, and we worked together to
close a legal loophole which had shielded civilian employees
working overseas from being prosecuted for criminal acts they
commit abroad.
Because of the loophole, these persons were outside the
scope of military justice, and beyond the jurisdiction of U.S.
federal courts. When foreign countries declined prosecuting
these individuals, they were never brought to justice for their
acts.
MEJA provided U.S. federal courts with jurisdiction over
civilian employees, contractors and subcontractors affiliated
with the Defense Department who commit crimes that would have
otherwise subjected that person to at least one year in
prison--if the offense had been committed in America.
By eliminating the statutory loophole that previously
allowed these criminals to walk free, MEJA provided the
Department of Justice with the necessary prosecutorial tools to
hold criminals accountable for their actions.
2004 SESSIONS/SCHUMER AMENDMENT TO MEJA
In 2004, Senator Schumer and I recognized that events
overseas had clouded the scope of who could be prosecuted under
MEJA. On its face, it applied only to persons directly
associated with the Department of Defense, either as
contractors or civilian employees. The statute did not address
contractors employed by other federal agencies.
Some of the prison abuses at Abu Gharib involved employees
of private contractors who may not have been directly
affiliated with the Department of Defense, but with other
federal entities.
As such, these private contractors could fall outside the
scope of MEJA, and accordingly, outside the jurisdiction of
U.S. federal courts. These events highlighted the need to
clarify and expand the coverage of MEJA to cover all types of
contractors--no matter what federal agency was signing their
paycheck.
In June 2004, Senator Schumer and I offered an amendment to
the Department of Defense Reauthorization Bill that would give
the Justice Department authority to prosecute civilian
contractors employed not only with the Department of Defense,
but with any federal agency supporting American military
missions overseas.
At that time, the number of private contractors working in
Iraq was about 10 times as great as it was during the Persian
Gulf conflict. I argued then and I reiterate now that private
contractors are necessary to rebuilding a healthy Iraq, yet we
cannot allow them to escape justice for crimes committed
overseas.
The Senate accepted the Sessions-Schumer amendment by voice
vote, forever closing a jurisdictional gap and leaving no doubt
as to whether overseas offenders can be brought to justice.
HISTORY OF THE WAR PROFITEERING PREVENTION ACT OF 2007
In June 2004, the Chairman also offered an amendment to the
Department of Defense Reauthorization bill aimed at cracking
down on contracting fraud. At that time, his amendment was
defeated 52-46. Many Senators, myself included, agreed that
there was a need for legislation to impose criminal penalties
on persons who commit wrongdoing in contracting in the course
of our military operations. However, we were concerned that the
language in the amendment introduced a new standard of
criminality that required further review.
At that time, the amendment created a specific crime when
an individual, contractor, entity, or corporation knowingly and
willfully ``materially overvalues any good or service with the
specific intent to excessively profit from the war, military
action, or relief or reconstruction activities in Iraq,
Afghanistan, or such other country.''
The term ``excessively profit'' has been used in civil
statutes, but not in criminal statutes. Many Senators who
opposed the Chairman's amendment did not want to introduce such
vague language into the Criminal Code. I preferred to use
language found in other fraud statutes so we know precisely
what the language means.
On April 25, 2007, the War Profiteering Prevention Act
passed out of the Judiciary Committee. This legislation is very
similar to Senator Leahy's 2004 amendment, but he has made some
very important changes. I am pleased that before the bill
passed out of Committee, Senator Leahy offered an amendment
that removes the vague phrase ``excessively profits'' from the
bill. In its amended form, the language now creates a specific
crime for:
``Whoever, in any matter involving a contract or the
provision of goods or services, directly or indirectly,
in connection with a war, military action, or relief or
reconstruction activities . . . knowingly and willfully
. . . materially overvalues any good or service with
the specific intent to defraud.''
The ``materially overvalues'' language comes directly from
the insurance fraud section of Title 18 (18 U.S.C. Sec. 1033),
which includes the phrase ``materially overvalues any land,
property, or security.'' Importantly, the current language of
``specific intent to defraud'' will be a much clearer standard
than the previous language of ``specific intent to excessively
profit.''
DISASTER RELIEF FRAUD
The intent of this bill somewhat overlaps the intent of my
Emergency and Disaster Assistance Fraud Penalty Enhancement
Act, which was passed out of the Judiciary Committee in March
of this year. The chairman's bill includes disaster relief
efforts, which are the specific focus of my anti-fraud bill.
The goal of my bill is to protect the victims of disasters
like Hurricane Katrina by making it a specific crime under the
existing fraud chapter of Title 18 (18 U.S.C., chapter 47) to
fraudulently obtain emergency disaster funds.
After an emergency or disaster like the tornadoes that
devastated the city of Enterprise in my home state this March,
and the deadly tornadoes that devastated Texas this April, we
should do everything we can to make sure 100% of federal relief
funds get into the hands of real victims and not people
pretending to be victims. Taxpayers should not sustain a
financial loss at the hands of scam artists, and wrongdoers
should not profit from exploiting the victims of such horrific
events.
Common sense requires that those who deceive the government
and obtain emergency disaster funds by fraud be subject to
criminal punishment. We need to create a mindset that disaster
relief funds are sacred; that they are for the benefit of
people who have suffered tremendous loss; and only people who
have suffered should gain the benefit of federal relief monies.
The total price tag for the fraud committed after
Hurricanes Katrina and Rita is not yet known, but the
Government Accountability Office investigators have testified
that it will be in the billions of dollars for the federal
government.
Billions of dollars in fraudulent payments is an insult to
the victims of these natural disasters and an insult to the
ultimate victim in this fraud, the American taxpayer. Natural
disasters and emergency situations often create an opportunity
for unscrupulous individuals to take advantage of both the
immediate victims of the disaster or emergency, as well as
those who offer financial and other assistance to the victims.
The American people are extremely generous in responding to
disasters, but they will not tolerate fraud by those who
deceitfully exploit their generosity.
Our resources are not unlimited, and it is critical that we
ensure that every relief dollar goes to legitimate victims. It
is important we give prosecutors the tools they need to protect
legitimate victims and to protect American taxpayers.
Exploiting the kindness of the American people in times of
crisis is a serious crime that will be treated with appropriate
severity. We will not tolerate criminals stealing from the
pockets of disaster victims. We must ensure that victims and
the generous members of the American public are not preyed upon
by criminals attempting to profit from these disasters and
emergencies.
This bill creates a new section in the fraud chapter of
Title 18 that prohibits fraud relating to military action,
relief, and reconstruction efforts, while my bill adds a
section to the fraud chapter which prohibits fraud in
connection with major disaster or emergency benefits. My bill
also increases the penalties currently available for such acts.
It is clear that these two important pieces of legislation must
be harmonized before they become law.
CONCLUSION
I am pleased that the Chairman amended this legislation to
remove a potentially vague term, ``excessively profits,'' from
the language of the bill. After this revision, the bill sets
forth a clear criminal standard that is both fair to
contractors and appropriate for prosecuting these terrible
crimes. In light of this significant change, I am happy to
express my support for this legislation.
VII. Changes in Existing Law Made by the Bill as Reported
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
S. 119, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
UNITED STATES CODE
TITLE 18--CRIMES AND CRIMINAL PROCEDURE
PART I--CRIMES
* * * * * * *
CHAPTER 46--FORFEITURE
* * * * * * *
Sec. 981. Civil Forfeiture
(a)(1) The following property is subject to forfeiture to
the United States:
(A) Any property, real or personal, involved in a
transaction or attempted transaction in violation of
section 1956, 1957 or 1960 of this title, or any
property traceable to such property.
* * * * * * *
(C) Any property, real or personal, which constitutes
or is derived from proceeds traceable to a violation of
section 215, 471, 472, 473, 474, 476, 477, 478, 479,
480, 481, 485, 486, 487, 488, 501, 502, 510, 542, 545,
656, 657, 842, 844, 1005, 1006, 1007, 1014, 1028, 1029,
1030, 1032, 1039, or 1344 of this title or any offense
constituting specified unlawful activity'' (as defined
in section 1956(c)(7) of this title), or a conspiracy
to commit such offense.
* * * * * * *
Sec. 982. Criminal Forfeiture
(a)(1) The court, in imposing sentence on a person
convicted of an offense in violation of section 1956, 1957, or
1960 of this title, shall order that the person forfeit to the
United States any property, real or personal, involved in such
offense, or any property traceable to such
(2) The court, in imposing sentence on a person convicted
of a violation of, or a conspiracy to violate--
(A) section 215, 656, 657, 1005, 1006, 1007, 1014,
1341, 1343, or 1344 of this title, affecting a
financial institution, or 485, 486, 487, 488, 501, 502,
510, 542, 545, 842, 844, 1028, 1029, [or 1030] 1030 or
1030 of this title, shall order that the property
constituting, or derived from, proceeds the person
obtained directly or indirectly, as the result of such
violation.
* * * * * * *
CHAPTER 47--FRAUD AND FALSE STATEMENTS
* * * * * * *
Sec.
* * * * * * *
1038. False Information and hoaxes.
1039. Fraud and related activity in connection with
obtaining confidential phone records information of a covered
entity.
1039. War profiteering and fraud relating to military
action, relief, and reconstruction efforts.
* * * * * * *
Sec. 1039. War profiteering and fraud relating to military
action, relief, and reconstruction efforts
(a) Prohibition.--
(1) In General.--Whoever, in any matter involving a
contract or the provision of goods or services,
directly or indirectly, in connection with a war,
military action, or relief or reconstruction activities
within the jurisdiction of the United States
Government, knowingly and willfully--
(A)(i) executes or attempts to execute a
scheme or artifice to defraud the United
States; or
(ii) materially overvalues any good or
service with the specific intent to defraud;
shall be fined under paragraph (2), imprisoned
not more than 20 years, or both; or
(B)(i) falsifies, conceals, or covers up by
any trick, scheme, or device a material fact;
(ii) makes any materially false, fictitious,
or fraudulent statements or representations; or
(iii) makes or uses any materially false
writing or document knowing the same to contain
any materially false, fictitious or fraudulent
statement or entry; shall be fined under
paragraph (2) imprisoned not more than 10
years, or both.
(2) Fine.-- A person convicted of an offense under
paragraph (1) may be fined the greater of--
(A) $1,000,000; or
(B) if such person derives profits or other
proceeds from the offense, not more than twice
the gross profits or other proceeds.
(b) Extraterritorial Jurisdiction.--There is
extraterritorial Federal jurisdiction over an offense under
this section.
(c) Venue.--A prosecution for an offense under this section
may be brought--
(1) as authorized by chapter 211 of this title;
(2) in any district where any act in furtherance of
the offense took place; or
(3) in any district where any party to the contract
or provider of goods or services is located.
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CHAPTER 95--RACKETEERING
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Sec. 1956. Laundering of Monetary Instruments
* * * * * * *
(c) As used in this section----
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(7) the term ``specified unlawful activity'' means--
* * * * * * *
(D) an offense under section 32 (relating to
the destruction of aircraft), section 37
(relating to violence at international
airports), section 115 (relating to
influencing, impeding, or retaliating against a
Federal official by threatening or injuring a
family member), section 152 (relating to
concealment of assets; false oaths and claims;
bribery), section 175c (relating to the variola
virus), section 215 (relating to commissions or
gifts for procuring loans), section 351
(relating to congressional or Cabinet officer
assassination), any of sections 500 through 503
(relating to certain counterfeiting offenses),
section 513 (relating to securities of States
and private entities), section 541 (relating to
goods falsely classified), section 542
(relating to entry of goods by means of false
statements), section 545 (relating to smuggling
goods into the United States), section 549
(relating to removing goods from Customs
custody), section 641 (relating to public
money, property, or records), section 656
(relating to theft, embezzlement, or
misapplication by bank officer or employee),
section 657 (relating to lending, credit, and
insurance institutions), section 658 (relating
to property mortgaged or pledged to farm credit
agencies), section 666 (relating to theft or
bribery concerning programs receiving Federal
funds), section 793, 794, or 798 (relating to
espionage), section 831 (relating to prohibited
transactions involving nuclear materials),
section 844(f) or (i) (relating to destruction
by explosives or fire of Government property or
property affecting interstate or foreign
commerce), section 875 (relating to interstate
communications), section 922(l) (relating to
the unlawful importation of firearms), section
924(n) (relating to firearms trafficking),
section 956 (relating to conspiracy to kill,
kidnap, maim, or injure certain property in a
foreign country), section 1005 (relating to
fraudulent bank entries), 1006 (2) (relating to
fraudulent Federal credit institution entries),
1007 (relating to Federal Deposit Insurance
transactions), 1014 (relating to fraudulent
loan or credit applications), section 1030
(relating to computer fraud and abuse), 1032
(relating to concealment of assets from
conservator, receiver, or liquidating agent of
financial institution), section 1039 (relating
to war profiteering and fraud relating to
military action, relief, and reconstruction
efforts), section 1111 (relating to murder),
section 1114 (relating to murder of United
States law enforcement officials), section 1116
(relating to murder of foreign officials,
official guests, or internationally protected
persons), section 1201 (relating to kidnaping),
section 1203 (relating to hostage taking),
section 1361 (relating to willful injury of
Government property), . . .
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CHAPTER 96--RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS
* * * * * * *
As used in this chapter--
(1) ``racketeering activity'' means (A) any act or
threat involving murder, kidnapping, gambling, arson,
robbery, bribery, extortion, dealing in obscene matter,
or dealing in a controlled substance or listed chemical
(as defined in section 102 of the Controlled Substances
Act), which is chargeable under State law and
punishable by imprisonment for more than one year; (B)
any act which is indictable under any of the following
provisions of title 18, United States Code: Section 201
(relating to bribery), section 224 (relating to sports
bribery), sections 471, 472, and 473 (relating to
counterfeiting), section 659 (relating to theft from
interstate shipment) if the act indictable under
section 659 is felonious, section 664 (relating to
embezzlement from pension and welfare funds), sections
891-894 (relating to extortionate credit transactions),
section 1028 (relating to fraud and related activity in
connection with identification documents), section 1029
(relating to fraud and related activity in connection
with access devices), section 1039 (relating to war
profiteering and fraud relating to military action,
relief, and reconstruction efforts), section 1084
(relating to the transmission of gambling information),
section 1341 (relating to mail fraud), section 1343
(relating to wire fraud), section 1344 (relating to
financial institution fraud), section 1425 (relating to
the procurement of citizenship or nationalization
unlawfully), . . .
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