[Senate Report 112-142]
[From the U.S. Government Publishing Office]


                                                        Calendar No. 60
112th Congress                                                   Report
                                 SENATE
 2d Session                                                     112-142

======================================================================



 
            FIGHTING FRAUD TO PROTECT TAXPAYERS ACT OF 2011

                                _______
                                

                January 30, 2012.--Ordered to be printed

                                _______
                                

            Mr. Leahy, from the Committee on the Judiciary, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 890]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to which was referred the 
bill (S. 890), to establish the supplemental fraud fighting 
account, and for other purposes, having considered the same, 
reports favorably thereon, without amendment, and recommends 
that the bill do pass.

                                CONTENTS

                                                                   Page
  I. Background and Purpose of the Fighting Fraud to Protect Taxpayers 
     Act of 2011......................................................1
 II. History of the Bill and Committee Consideration..................3
III. Section-by-Section Summary of the Bill...........................4
 IV. Congressional Budget Office Cost Estimate........................6
  V. Regulatory Impact Evaluation.....................................9
 VI. Conclusion.......................................................9
VII. Changes to Existing Law Made by the Bill, as Reported............9

 I. Background and Purpose of the Fighting Fraud to Protect Taxpayers 
                              Act of 2011

    On May 5, 2011, Chairman Leahy and Ranking Member Grassley 
introduced the Fighting Fraud to Protect Taxpayers Act of 2011 
(FFPTA). Senators Klobuchar and Coons subsequently joined as 
cosponsors. This legislation protects taxpayers by deterring 
fraud and bringing money back into our Nation's coffers. It 
provides new tools for law enforcement to prosecute and punish 
those responsible for fraud and does so at no added cost to 
taxpayers. The bill also fills key statutory gaps to account 
for modern types of fraud, including strengthening computer 
fraud and identity theft statutes and giving needed authority 
to the Secret Service to more effectively investigate fraud. At 
the same time, the FFPTA will increase accountability by 
requiring the Justice Department to better manage and account 
for key spending.

                             A. BACKGROUND

    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. This renewed 
focus on fraud enforcement has yielded significant results, 
including an increase in fraud prosecutions and billions of 
dollars in recoveries, but nevertheless, Americans have been 
victimized repeatedly in recent years by waves of fraud--
mortgage fraud, foreclosure fraud, financial fraud, and health 
care fraud, among others. The FFPTA reflects the ongoing need 
to invest in enforcement to better protect hard-working 
taxpayers from all of these insidious types of fraud.

                     B. PURPOSE OF THE LEGISLATION

    In the fiscal year 2010 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.\1\
---------------------------------------------------------------------------
    \1\See Protecting American Taxpayers: Significant Accomplishments 
and Ongoing Challenges in the Fight Against Fraud: Hearing Before the 
S. Comm. on the Judiciary, 112th Cong. 9 (2011) (testimony of Lanny 
Breuer, Asst. Att'y Gen., Crim. Div., U.S. Dept. of Justice) (stating 
fraud enforcement costs the Criminal Division only a ``small, small 
fraction'' when compared to the money recovered by the Division). 
Available at http://www.gpo.gov/fdsys/pkg/CHRG-112shrg67415/pdf/CHRG-
112shrg67415.pdf; See also New Tools for Curbing Waste and Fraud in 
Medicare and Medicaid: Hearing Before the Subcomm. On Fin. Mgmt., Gov't 
Info., Fin. Serv. and Int'l Sec. of the S. Comm. on Homeland Sec. and 
Gov't Affairs, 112th Cong. 2 (2011) (statement of Greg Andres, Acting 
Deputy Asst. Att'y Gen., Crim. Div., U.S. Dept. of Justice) (noting the 
Department of Justice estimates that the three year rolling average 
return on investment in health care fraud cases is $7:$1). Available at 
http://hsgac.senate.gov/public/
index.cfm?FuseAction=Files.View&FileStore_id=f9e14825-581c-4f5d-b1ba-
ef486d852cd8. The Department of Justice estimates that the Criminal 
Division's overall return on investment is $10:$1.
---------------------------------------------------------------------------
    The centerpiece provision of the FFTPA capitalizes on this 
rate of return by ensuring that a percentage of money recovered 
by the Government through fines and penalties is reinvested in 
the investigation and prosecution of fraud cases. This will 
ensure more fraud enforcement, which in turn will result in 
more returns to the Government, and more savings to taxpayers, 
all without spending new taxpayer money.\2\ The bill will take 
approximately $15 million each year that is collected by the 
Government through civil debt collection activities and 
redirect those funds into investigating, prosecuting, and 
litigating fraud cases.
---------------------------------------------------------------------------
    \2\The Congressional Budget Office has given this legislation a 
modest score because CBO rules require scoring of money allocated that 
would otherwise go to the general Treasury even if that money does not 
come from taxpayers. Congressional Budget Office rules do not allow 
credit for the return on investment from spending on fraud. This score 
does not change the fact that this bill requires no new taxpayer 
spending, and will lead to a net increase in funds going to the 
Treasury as the fraud prosecutions and litigation funded by this bill 
lead to fines, penalties, and other returns.
---------------------------------------------------------------------------
    The bill also makes modest changes to ensure that 
prosecutors and investigators have the tools they need to 
combat fraud. It extends the international money laundering 
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, Congress strengthened 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. In 2009 
and 2010, the Department of Justice has recovered more than 
$6.8 billion in False Claims Act cases, far more than any other 
two-year period.\3\ The FFPTA 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.
---------------------------------------------------------------------------
    \3\See Protecting American Taxpayers: Significant Accomplishments 
and Ongoing Challenges in the Fight Against Fraud: Hearing Before the 
S. Comm. on the Judiciary, 112th Cong. 89 (2011) (testimony of Tony 
West, Asst. Att'y Gen., Civ. Div., U.S. Dept. of Justice).
---------------------------------------------------------------------------
    The FFPTA also 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.
    We must continue to strengthen the tools that law 
enforcement has to root out fraud. Taxpaying Americans deserve 
to know that their Government is doing all it can to prevent 
fraud and hold those who commit fraud accountable for their 
crimes. The FFPTA will provide new tools needed for law 
enforcement to prosecute and punish those responsible for 
fraud, and will do so at no added cost to taxpayers.

          II. History of the Bill and Committee Consideration


                      A. INTRODUCTION OF THE BILL

    On May 5, 2011, Chairman Leahy introduced the bill, S. 890, 
with Senator Grassley. Senators Klobuchar and Coons have joined 
as cosponsors.

                       B. COMMITTEE CONSIDERATION

1. Committee hearing

    On January 25, 2011, the Committee held a hearing entitled 
``Protecting American Taxpayers: Significant Accomplishments 
and Ongoing Challenges in the Fight Against Fraud'' to, among 
other things, explore whether new resources and tools for fraud 
enforcement were needed. At the hearing, two witnesses 
testified: Assistant Attorney General Lanny Breuer of the 
Criminal Division of the Department of Justice, and Assistant 
Attorney General Tony West of the Civil Division of the 
Department of Justice. Both witnesses described the benefits of 
increasing resources for fraud enforcement.
    Assistant Attorney General Breuer testified that in fiscal 
year 2010 alone, in criminal matters in which the Criminal 
Division participated, the Justice Department obtained 
approximately $3.4 billion in judgments and settlements, with 
more than $1 billion in restitution ordered, $570 million in 
fines, $914 million in forfeiture, and $828 million in other 
settlements. He reiterated that Congress's financial support of 
criminal investigations and prosecutions is critical to 
protecting American taxpayers' hard earned money. He also 
reaffirmed that the amount of taxpayer money restored to the 
United States Treasury through criminal fraud enforcement 
efforts far exceeds what the Department of Justice spends to 
recover that money. As a result of criminal fraud prosecutions, 
the Department is transferring to the U.S. Treasury far more 
money than the amount budgeted by Congress to support the 
Department's criminal fraud and corporate corruption 
investigations and prosecutions.
    Assistant Attorney General West testified that each year 
the attorneys from the Civil Division of the Department of 
Justice handle thousands of cases that collectively involve 
billions of dollars in claims and recoveries. Over the last 
year, the Department of Justice has made significant strides in 
protecting taxpayer dollars--as well as the integrity of 
Government programs that depend on those dollars--through 
aggressive civil enforcement actions aimed at rooting out 
waste, fraud, and abuse. For fiscal year 2010, the Civil 
Division secured $3 billion in civil settlements and judgments 
in cases involving fraud against the Government.

2. Executive business meetings

    On May 12, 2011, the Committee held an executive committee 
business meeting to consider S. 890 and other measures, and the 
bill was held over for further consideration at the request of 
the Ranking Member.
    On May 19, 2011, the Committee considered S. 890. No 
amendments were offered, and the Committee voted to report S. 
890, the Fighting Fraud to Protect Taxpayers Act of 2011, 
favorably to the Senate. The Committee proceeded by roll call 
vote as follows:
    Tally: 16 Yeas, 2 Nays
    Yeas (16): Kohl (D-WI), Feinstein (D-CA), Schumer (D-NY), 
Durbin (D-IL), Whitehouse (D-RI), Klobuchar (D-MN), Franken (D-
MN), Coons (D-DE), Blumenthal (D-CT), Grassley (R-IA), Hatch 
(R-UT), Sessions (R-AL), Graham (R-SC), Cornyn (R-TX), Coburn 
(R-OK), Leahy (D-VT).
    Nays (2): Kyl (R-AZ), Lee (R-UT).

              III. Section-by-Section Summary of the Bill


Section 1. Short title

    This section provides that the legislation may be cited as 
the ``Fighting Fraud to Protect Taxpayers Act of 2011.''

Section 2. Department of Justice Working Capital Fund reforms to 
        support fraud enforcement

    Currently, the Department of Justice is authorized to keep 
in its Working Capital Fund up to 3 percent of the money it 
collects pursuant to its civil debt collection litigation 
activities. This section increases that amount to 3.5 percent 
and directs that the additional .5 percent must be spent on the 
investigation and prosecution of fraud. This should result in 
approximately $15 million additional dollars spent on fraud 
enforcement each year. The section also increases 
accountability by capping the amount of the 3.5 percent 
collected each year that the Justice Department can carry over 
to spend in subsequent years and requiring the Justice 
Department to report to Congress on how the Working Capital 
Fund operates each year.

Section 3. Reimbursement of costs awarded if False Claims Act 
        prosecutions

    Civil False Claims Act recoveries are deposited in the 
General Fund of the Treasury after relators are paid, victim 
agencies are refunded for their loss, and 3 percent is deducted 
for the Department of Justice's Working Capital Fund. This 
section authorizes an additional deduction to allow the 
Department of Justice or any other investigating agency to 
recoup its investigation and prosecution costs related to the 
False Claims Act matter being resolved.

Section 4. Interlocutory appeals of suppression or exclusion of 
        evidence

    This section amends 18 U.S.C. Sec. 3731 to expressly permit 
Assistant Attorneys General, the Deputy Attorney General, and 
the Attorney General to certify interlocutory appeals from 
district court orders suppressing or excluding evidence. As it 
is currently written, section 3731 requires a certification by 
the United States Attorney, and at least one appellate court 
has held that the language does not permit certification by 
others. This creates a vacuum in cases that are handled by 
Department of Justice components other than the United States 
Attorneys' Offices, including the litigating units that handle 
fraud cases.

Section 5. Extension of the international money laundering statute to 
        tax evasion crimes

    This section extends the money laundering statute to cover 
tax evasion crimes. Doing so will allow criminals who hide 
money overseas to be charged with money laundering, which can 
result in increased sentences, which in turn acts as a 
deterrent to fraud crimes.

Section 6. Strengthening the prohibition against trafficking in 
        passwords

    Currently, it is criminal to knowingly traffic in passwords 
that can be used to access computers without authorization. The 
current prohibition applies, however, only where the 
trafficking itself affects interstate or foreign commerce, or 
where the passwords could access a Government computer. This 
section amends 18 U.S.C. Sec. 1030(a)(6) to criminalize 
trafficking in passwords that could access any protected 
computer as defined by section 1030(e)(2) (computers for the 
use of a financial institution or the Government, or which are 
used in or affecting interstate or foreign commerce or 
communication).

Section 7. Clarifying venue for Federal mail fraud offenses

    This section amends the general venue statute, 18 U.S.C. 
Sec. 3237, to clarify that, in the context of mail fraud 
schemes, venue exists in any district in which any act in 
furtherance of the offense is committed. This fix permits venue 
in the district where the bulk of the fraudulent conduct 
occurs, regardless of where a letter is mailed.

Section 8. Expansion of authority of the Secret Service

    The U.S. Secret Service is one of the only Federal law 
enforcement agencies that lacks the permanent authority to use 
either appropriated funds or proceeds received from criminal 
investigations for some activities to advance undercover 
operations. This section grants the Secret Service the same 
permanent authority to conduct undercover operations that is 
given to other law enforcement entities.

Section 9. False Claims Act settlements

    This section requires the Attorney General to submit an 
annual report to Congress that describes in detail each 
settlement the Justice Department enters into that relates to 
an alleged violation of the False Claims Act.

Section 10. Amending the title of Aggravated Identity Theft

    This section amends the title of the identity theft 
statute, changing it from ``Aggravated Identity Theft'' to 
``Aggravated Identity Theft and Fraud'' to better reflect the 
nature of the conduct charged under the provision.

Section 11. Expanding identity theft to include corporate identity 
        theft

    Currently, the regular identity theft offense codified at 
18 U.S.C. Sec. 1028(a)(7) does not cover the unlawful use of a 
corporation's name. This is problematic because criminals 
routinely engage in the unauthorized use of legitimate 
companies' names and logos. This section amends the identity 
theft statute to cover the unlawful use of legitimate corporate 
names and logos.

             IV. Congressional Budget Office Cost Estimate

    The Committee sets forth, with respect to the bill S. 890, 
the following estimate and comparison prepared by the Director 
of the Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974.
                                                     June 15, 2011.
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. 890, the Fighting 
Fraud to Protect Taxpayers Act of 2011.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

S. 890--Fighting Fraud to Protect Taxpayers Act of 2011

    Summary: S. 890 would increase the funds available to the 
Department of Justice (DOJ) each year for investigating and 
prosecuting fraud offenses. The bill would establish a new 
federal crime relating to international money laundering. S. 
890 also would require DOJ to prepare annual reports on 
settlements of certain fraud cases and funding of its debt 
collection and antifraud efforts.
    CBO estimates that enacting S. 890 would increase direct 
spending by $69 million over the 2012-2021 period. In addition, 
we estimate that enacting the bill would affect revenues, but 
such effects would not be significant. Because enacting the 
legislation would affect direct spending and revenues, pay-as-
you-go procedures apply. We also estimate that implementing the 
bill would have discretionary costs of about $1 million 
annually over the 10-year period.
    S. 890 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 890 is shown in the following table. The 
costs of this legislation fall within budget function 750 
(administration of justice).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  By fiscal year, in millions of dollars--
                                                   -----------------------------------------------------------------------------------------------------
                                                     2012    2013    2014    2015    2016    2017    2018    2019    2020    2021   2012-2016  2012-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING

Estimated Budget Authority........................       7       7       7       7       7       7       7       7       7       7        35         70
Estimated Outlays.................................       6       7       7       7       7       7       7       7       7       7        34         69

                                                      CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level.....................       1       1       1       1       1       1       1       1       1       1         5         10
Estimated Outlays.................................       1       1       1       1       1       1       1       1       1       1         5         10
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that S. 
890 will be enacted by the end of fiscal year 2011.

Direct spending and revenues

    DOJ collects civil debt owed to federal agencies and 
returns most of the recovered amounts to those agencies, with 
remaining amounts deposited in the Treasury. Current law 
authorizes DOJ to retain and spend up to 3 percent of most debt 
it recovers to defray the costs of its debt collection efforts. 
S. 890 would permit DOJ to retain and spend an additional 0.5 
percent annually to cover certain costs of investigating and 
prosecuting fraud offenses.
    Based on the amount of civil debt recovered by DOJ in 
recent years, CBO expects the department to collect between $3 
billion and $4 billion annually over the 2012-2021 period and 
to retain 3 percent of those amounts. Under current law, most 
of the remaining amounts will be returned to agencies and 
spent, so allowing DOJ to retain an extra 0.5 percent of those 
funds would have no significant net effect on federal spending. 
However, we estimate that each year about $1.4 billion of debt 
collected by DOJ will be deposited in the Treasury and not 
available to be spent. CBO estimates that allowing DOJ to spend 
an additional 0.5 percent of those funds would increase direct 
spending by about $7 million annually over the 2012-2021 
period.
    S. 890 would establish a new federal crime relating to 
international money laundering. Because those prosecuted and 
convicted under S. 890 could be subject to criminal fines, the 
federal government might collect additional fines if the 
legislation is enacted. Criminal fines are recorded as 
revenues, 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.

Spending subject to appropriation

    S. 890 would direct DOJ to prepare an annual report for the 
Congress on the sources of the collections that it retains each 
year and on the spending of those funds. The bill also would 
require DOJ to prepare an annual report on cases involving 
major fraud or false claims against the United States that were 
resolved through settlement. Based on the costs of similar 
activities, CBO estimates that it would cost about $1 million 
annually, subject to the availability of appropriated funds, 
for DOJ to prepare the reports required by the bill.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. S. 890 would increase the funds available to DOJ each 
year for investigating and prosecuting fraud offenses. The bill 
also could affect direct spending and revenues through the 
collection and spending of criminal fines. The net changes in 
outlays and revenues that are subject to those pay-as-you-go 
procedures are shown in the following table.

              CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR S. 890 AS ORDERED REPORTED BY THE SENATE COMMITTEE ON THE JUDICIARY ON MAY 19, 2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 By fiscal year, in millions of dollars--
                                                --------------------------------------------------------------------------------------------------------
                                                  2011   2012   2013   2014   2015   2016    2017    2018    2019    2020    2021   2011-2016  2011-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       NET INCREASE OR DECREASE (-) IN THE DEFICIT

Statutory Pay-As-You-Go Impact.................      0      6      7      7      7       7       7       7       7       7       7        34         69
Memorandum:
  Changes in Outlays...........................      0      6      7      7      7       7       7       7       7       7       7        34         69
  Changes in Revenues..........................      0      0      0      0      0       0       0       0       0       0       0         0          0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Estimated impact on state, local, and tribal governments: 
S. 890 contains no intergovernmental or private-sector mandates 
as defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal costs: Mark Grabowicz; Impact 
on state, local, and tribal governments: Melissa Merrell; 
Impact on the private sector: Marin Randall.
    Estimate approved by: Theresa Gullo, 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. 890.

                             VI. Conclusion

    The FFPTA will enhance and invigorate existing efforts to 
investigate fraud, including the scourge of mortgage, 
foreclosure, financial, and health care fraud that has 
victimized thousands of unsuspecting Americans in recent years. 
The legislation will fill key statutory gaps to account for 
modern types of fraud and will increase accountability by 
requiring the Justice Department to better manage and account 
for key spending. The FFPTA reflects the ongoing need to invest 
in enforcement to better protect hard-working taxpayers from 
all of these insidious types of fraud.

       VII. Changes to 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. 890, 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 28--JUDICIARY AND JUDICIAL PROCEDURE

PART II--DEPARTMENT OF JUSTICE

           *       *       *       *       *       *       *


CHAPTER 31--THE ATTORNEY GENERAL

           *       *       *       *       *       *       *



SEC. 527. ESTABLISHMENT OF WORKING CAPITAL FUND.

STATUTORY NOTE

    [Notwithstanding] (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 
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 
Department of Justice Working Capital Fund up to 3 percent of 
all amounts collected pursuant to civil debt collection 
litigation activities of the Department of Justice. [Such 
amounts] Subject to paragraph (4), such amounts in the Working 
Capital Fund shall remain available until expended and shall be 
subject to the terms and conditions of that fund, and shall be 
used first, for paying the costs of processing and tracking 
civil and criminal debt-collection litigation, and, thereafter, 
for financial systems and for debt-collection-related 
personnel, administrative, and litigation expenses.
    (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.

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TITLE 31--MONEY AND FINANCE

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SUBTITLE III--FINANCIAL MANAGEMENT

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CHAPTER 37--CLAIMS

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Subchapter III--Claims Against the United States Government

           *       *       *       *       *       *       *



SEC. 3729. FALSE CLAIMS.

    (a) Liability for Certain Acts.--

           *       *       *       *       *       *       *

          (3) Costs of civil actions.--A person violating this 
        subsection shall also be liable to the United States 
        Government for the costs of a civil action brought to 
        recover any such penalty or damages. 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. 

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TITLE 18--CRIMES AND CRIMINAL PROCEDURE

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PART II--CRIMINAL PROCEDURE

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CHAPTER 235--APPEAL

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SEC. 3731. APPEAL BY UNITED STATES.

    In a criminal case an appeal by the United States shall lie 
to a court of appeals from a decision, judgment, or order of a 
district court dismissing an indictment or information or 
granting a new trial after verdict or judgment, as to any one 
or more counts, or any part thereof, except that no appeal 
shall lie where the double jeopardy clause of the United States 
Constitution prohibits further prosecution.
    An appeal by the United States shall lie to a court of 
appeals from a decision or order of a district court 
suppressing or excluding evidence or requiring the return of 
seized property in a criminal proceeding, not made after the 
defendant has been put in jeopardy and before the verdict or 
finding on an indictment or information, if the Attorney 
General, the Deputy Attorney General, an Assistant Attorney 
General, or the United States attorney certifies to the 
district court that the appeal is not taken for purpose of 
delay and that the evidence is a substantial proof of a fact 
material in the proceeding.
    An appeal by the United States shall lie to a court of 
appeals from a decision or order, entered by a district court 
of the United States, granting the release of a person charged 
with or convicted of an offense, or denying a motion for 
revocation of, or modification of the conditions of, a decision 
or order granting release.
    The appeal in all such cases shall be taken within thirty 
days after the decision, judgment or order has been rendered 
and shall be diligently prosecuted.
    The provisions of this section shall be liberally construed 
to effectuate its purposes.

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PART I--CRIMES

           *       *       *       *       *       *       *


CHAPTER 95--RACKETEERING

           *       *       *       *       *       *       *



SEC. 1956. LAUNDERING OF MONETARY INSTRUMENTS.

    (a)(2) Whoever transports, transmits, or transfers, or 
attempts to transport, transmit, or transfer a monetary 
instrument or funds from a place in the United States to or 
through a place outside the United States or to a place in the 
United States from or through a place outside the United 
States--
          (A) with the [intent to promote the carrying on of 
        specified unlawful activity; or] intent to--
                  (i) promote
                  (ii) engage in conduct constituting a 
                violation of section 7201 or 7206 of the 
                Internal Revenue Code of 1986; or

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CHAPTER 47--FRAUD AND FALSE STATEMENTS

           *       *       *       *       *       *       *



SEC. 1030. FRAUD AND RELATED ACTIVITY IN CONNECTION WITH COMPUTERS.

    (a)(6) knowingly and with intent to defraud traffics (as 
defined in section 1029) in any password or similar information 
through which a protected computer may be accessed without 
authorization[, if--]; or
          [(A) such trafficking affects interstate or foreign 
        commerce; or
          [(B) such computer is used by or for the Government 
        of the United States;]

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PART II--CRIMINAL PROCEDURE

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                    CHAPTER 211--JURISDICTION VENUE


SEC.

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3231. District courts
3232. District of offense (Rule)
3233. Transfer within district (Rule)
3234. Change of venue to another district (Rule)
3235. Venue in capital cases
3236. Murder or manslaughter
[3237. Offenses begun in one district and completed in another]
3237. Offenses taking place in more than one district
3238. Offenses not committed in any district
3239. Optional venue for espionage and related offenses
3240. Creation of new district or division
3241. Jurisdiction of offenses under certain sections
3242. Indians committing certain offenses; acts on reservations
3243. Jurisdiction of State of Kansas over offenses committed by or 
          against Indians on Indian reservations
3244. Jurisdiction of proceedings relating to transferred offenders

           *       *       *       *       *       *       *


SEC. 3237. OFFENSES [BEGUN IN ONE DISTRICT AND COMPLETED IN ANOTHER] 
                    TAKING PLACE IN MORE THAN ONE DISTRICT.

    (a) Except as otherwise expressly provided by enactment of 
Congress, any offense against the United States begun in one 
district and completed in another, or committed in more than 
one district, may be inquired of and prosecuted in any district 
in which such offense was begun, continued, or completed.
    Any offense involving the use of the mails, transportation 
in interstate or foreign commerce, or the importation of an 
object or person into the United States is a continuing offense 
and, except as otherwise expressly provided by enactment of 
Congress, may be inquired of and prosecuted in any district 
from, through, or into which such commerce, mail matter, or 
imported object or person moves or in any district in which an 
act in furtherance of the offense is committed.

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CHAPTER 203--ARREST AND COMMITMENT

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SEC. 3056. POWERS, AUTHORITIES, AND DUTIES OF UNITED STATES SECRET 
                    SERVICE.

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    (b) Under the direction of the Secretary of Homeland 
Security, the Secret Service is authorized to detect and arrest 
any person who violates--
          (1) section 508, 509, 510, 641, 656, 657, 871, or 879 
        of this title or, with respect to the Federal Deposit 
        Insurance Corporation, Federal land banks, and Federal 
        land bank associations, section 213, 216, 433, [493, 
        657,] 493, 709, 1006, 1007, 1011, 1013, 1014, 1907, or 
        1909 of this title;
          (2) any of the laws of the United States relating to 
        coins, obligations, and securities of the United States 
        and of foreign governments; or
          (3) any of the laws of the United States relating to 
        electronic fund transfer frauds, access device frauds, 
        false identification documents or devices, and any 
        fraud or other criminal or unlawful activity in or 
        against any [federally insured] financial institution; 
        except that the authority conferred by this paragraph 
        shall be exercised subject to the agreement of the 
        Attorney General and the Secretary of Homeland Security 
        and shall not affect the authority of any other Federal 
        law enforcement agency with respect to those laws.

           *       *       *       *       *       *       *

    (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
          (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.

           *       *       *       *       *       *       *


PART I--CRIMES

           *       *       *       *       *       *       *


                 CHAPTER 47--FRAUD AND FALSE STATEMENTS


SEC.

           *       *       *       *       *       *       *


1020. Highway projects
1021. Title records
1022. Delivery of certificate, voucher, receipt for military or naval 
          property
1023. Insufficient delivery of money or property for military or naval 
          service
1024. Purchase or receipt of military, naval, or veteran's facilities 
          property
1025. False pretenses on high seas and other waters
1026. Compromise, adjustment, or cancellation of farm indebtedness
1027. False statements and concealment of facts in relation to documents 
          required by the Employee Retirement Income Security Act of 
          1974
[1028. Fraud and related activity in connection with identification 
1028. Fraud and related activity in connection with formation]
    identification documents, authentication features, and 
    information.
[1028A. Aggravated identity theft]
1028A. Aggravated identity theft and fraud.
1029. Fraud and related activity in connection with access devices
1030. Fraud and related activity in connection with computers

           *       *       *       *       *       *       *


SEC. 1028. FRAUD AND RELATED ACTIVITY IN CONNECTION WITH IDENTIFICATION 
                    DOCUMENTS, AUTHENTICATION FEATURES, AND 
                    INFORMATION.

    (a)(7) knowingly transfers, possesses, or uses, without 
lawful authority, a means of identification of another person 
(including an organization) with the intent to commit, or to 
aid or abet, or in connection with, any unlawful activity that 
constitutes a violation of Federal law, or that constitutes a 
felony under any applicable State or local law; or

           *       *       *       *       *       *       *


SEC. 1028A. AGGRAVATED IDENTITY THEFT AND FRAUD.

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