[Federal Register Volume 59, Number 91 (Thursday, May 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11365]


[[Page Unknown]]

[Federal Register: May 12, 1994]


                                                    VOL. 59, NO. 91

                                             Thursday, May 12, 1994

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 185

RIN 3206-AF77

 

Implementation of the Program Fraud Civil Remedies Act of 1986

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: The Office of Personnel Management (OPM) is proposing to issue 
regulations to implement the Program Fraud Civil Remedies Act (PFCRA) 
which Congress enacted on October 21, 1986. The PFCRA provides a 
statutory right for the Federal Government to take administrative 
action against fraud. The PFCRA also outlines the procedures that must 
be followed in administrative actions brought in accordance with the 
act. These regulations will implement these procedural requirements.

DATES: Comments must be submitted on or before July 11, 1994.

ADDRESSES: Send or deliver comments to Lorraine Lewis, General Counsel, 
Office of Personnel Management, Room 7355, 1900 E Street, NW., 
Washington, DC 20415.

FOR FURTHER INFORMATION CONTACT: Murray M. Meeker, Attorney, Office of 
the General Counsel, (202) 606-1980.

SUPPLEMENTARY INFORMATION: Public Law 99-509 provides a means by which 
Federal agencies may institute administrative proceedings against 
persons who have presented false claims or statements and provides 
further that Federal agencies who institute such administrative 
proceedings may recover double damages as well as penalties of up to 
$5,000 per violation.
    The Program Fraud Civil Remedies Act requires agencies to issue 
regulations. This rule establishes the procedures that OPM will follow 
under this Act. The moneys collected as a result of these procedures 
are deposited as miscellaneous receipts in the Treasury of the United 
States.

E.O. 12291, Federal Regulation

    OPM has determined that this is not a major rule as defined under 
section 1(b) of E.O. 12291, Federal Regulation.

Regulatory Flexibility Act

    I certify that these regulations will not have significant economic 
impact on a substantial number of small entities because their effects 
are limited primarily to federal employees and other entities who do 
business with OPM.

List of Subjects in 5 CFR Part 185

    Claims.

Office of Personnel Management.
Lorraine A. Green,
Deputy Director.

    Accordingly, OPM is adding part 185 of title 5, Code of Federal 
Regulations as follows:

PART 185--PROGRAM FRAUD CIVIL REMEDIES

Sec.
185.101  Purpose.
185.102  Definitions.
185.103  Basis for civil penalties and assessments.
185.104  Investigation.
185.105  Review by the reviewing official.
185.106  Prerequisites for issuing a complaint.
185.107  Complaint.
185.108  Service of complaint.
185.109  Answer.
185.110  Default upon failure to file an answer.
185.111  Referral of complaint and answer to the ALJ.
185.112  Notice of hearing.
185.113  Location of hearing.
185.114  Parties to the hearing.
185.115  Separation of functions.
185.116  Ex parte contacts.
185.117  Disqualification of reviewing official or ALJ.
185.118  Rights of parties.
185.119  Authority of the ALJ.
185.120  Prehearing conferences.
185.121  Disclosure of documents.
185.122  Discovery.
185.123  Exchange of witness lists, statements, and exhibits.
185.124  Subpoenas for attendance at hearing.
185.125  Protective order.
185.126  Evidence.
185.127  Fees.
185.128  Form, filing, and service of papers.
185.129  Computation of time.
185.130  Motions.
185.131  Sanctions.
185.132  The hearing and burden of proof.
185.133  Determining the amount of penalties and assessments.
185.134  Witnesses.
185.135  The record.
185.136  Post-hearing briefs.
185.137  Initial decision.
185.138  Reconsideration of initial decision.
185.139  Appeals to authority head.
185.140  Stays ordered by the Department of Justice.
185.141  Stay pending appeal.
185.142  Judicial review.
185.143  Collection of civil penalties and assessments.
185.144  Right to administrative offset.
185.145  Deposit in Treasury of the United States.
185.146  Compromise or settlement.
185.147  Limitations.

    Authority: 31 U.S.C. 3801-3812.


Sec. 185.101  Purpose.

    The purpose of this part is to implement the Program Fraud Civil 
Remedies Act of 1986, Pub. L. 99-509, 6101-6104, 100 Stat. 1874 
(October 21, 1986), codified at 31 U.S.C. 3801-3812. Section 3809 
requires each authority head to promulgate regulations necessary to 
implement the provisions of the statute. This part establishes 
administrative procedures for imposing civil penalties and assessments 
against persons who make, submit, or present, or cause to be made, 
submitted, or presented, false, fictitious, or fraudulent claims or 
written statements to authorities or to their agents, and specifies the 
hearing and appeal rights of persons subject to allegations of 
liability for such penalties and assessments. The moneys collected as a 
result of these procedures are deposited as miscellaneous receipts in 
the Treasury of the United States.


Sec. 185.102  Definitions.

    For the purposes of this part--
    ALJ means an Administrative Law Judge in the authority appointed 
pursuant to 5 U.S.C. 3105 or detailed to the authority pursuant to 5 
U.S.C. 3344.
    Authority means the Office of Personnel Management (OPM).
    Authority head means the Director of the Office of Personnel 
Management or the Director's designee.
    Benefit is very broad, and is intended to cover anything of value, 
including but not limited to any advantage, preference, privilege, 
license, permit, favorable decision, ruling, status or loan guarantee.
    Claim means any request, demand, or submission--
    (1) Made to the authority for property, services, or money 
(including money representing benefits, grants, loans or insurance);
    (2) Made to a recipient of property, services, or money from the 
authority or to a party to a contract with the authority:
    (i) For property or services if the United States:
    (A) Provided such property or services;
    (B) Provided any portion of the funds for the purchase of such 
property or services; or
    (C) Will reimburse such recipient or party for the purchase of such 
property or services.
    (ii) For the payment of money (including money representing grants, 
loans, insurance, or benefits) if the United States:
    (A) Provided any portion of the money requested or demanded; or
    (B) Will reimburse such recipient or party for any portion of the 
money paid on such request or demand.
    (3) Made to the authority which has the effect of decreasing an 
obligation to pay or account for property, services, or money.
    Complaint means the administrative complaint served by the 
reviewing official on the defendant under Sec. 185.107.
    Defendant means any person alleged in a complaint under 
Sec. 185.107 to be liable for a civil penalty or assessment under 
Sec. 185.103.
    Government means the United States Government.
    Individual means a natural person.
    Initial decision means the written decision of the ALJ required by 
Sec. 185.110 or Sec. 185.137, and includes a revised initial decision 
issued following a remand or a motion for reconsideration.
    Investigating Official means the Inspector General or the Inspector 
General's designee.
    Knows or has reason to know means that a person, with respect to a 
claim or statement:
    (1) Has actual knowledge that the claim or statement is false, 
fictitious, or fraudulent;
    (2) Acts in deliberate ignorance of the truth or falsity of the 
claim or statement; or
    (3) Acts in reckless disregard of the truth or falsity of the claim 
or statement.
    Makes shall include the terms presents, submits, and causes to be 
made, presented, or submitted. As the context requires, making or made, 
shall likewise include the corresponding forms of such terms.
    Person means any individual, partnership, corporation, association, 
or private organization, and includes the plural of that term.
    Representative means an attorney who is in good standing of the bar 
of any State, Territory, or possession of the United States or of the 
District of Columbia or the Commonwealth of Puerto Rico or other 
individual designated in writing by the defendant.
    Reviewing Official means the General Counsel of OPM or the General 
Counsel's designee. For the purposes of Sec. 185.105 of these rules, 
the General Counsel personally, or the General Counsel's designee, 
shall perform the functions of the reviewing official provided that 
such person serves in a position for which the rate of basic pay is not 
less than the minimum rate of basic pay payable under section 5376 of 
title 5, U.S. Code. All other functions of the reviewing official, 
including administrative prosecution under these rules, shall be 
performed on behalf of the reviewing official by the staff of the 
Office of the General Counsel.
    Statement means any representation, certification, affirmation, 
document, record, or accounting or bookkeeping entry made:
    (1) With respect to a claim or to obtain the approval or payment of 
a claim (including relating to eligibility to make a claim); or
    (2) With respect to (including relating to eligibility for):
    (i) A contract with, or a bid or proposal for a contract with; or
    (ii) A grant, loan, or benefit from, the authority, or any State, 
political subdivision of a State, or other party, if the United States 
Government provides any portion of the money or property under such 
contract or for such grant, loan, or benefit, or if the Government will 
reimburse such State, political subdivision, or party for any portion 
of the money or property under such contract or for such grant, loan, 
or benefit.


Sec. 185.103  Basis for civil penalties and assessments.

    (a) In addition to any other remedy that may be prescribed by law, 
any person shall be subject to a civil penalty of not more than $5,000, 
where the person makes a claim and knows or has reason to know that the 
claim:
    (1) Is false, fictitious, or fraudulent;
    (2) Includes, or is supported by, any written statement which 
asserts a material fact which is false, fictitious, or fraudulent;
    (3) Includes, or is supported by, any written statement that--
    (i) Omits a material fact;
    (ii) Is false, fictitious, or fraudulent as a result of such 
omission; and
    (iii) Is a statement in which the person making such statement has 
a duty to include such material fact; or
    (4) Is for payment for the provision of property or services which 
the person has not provided as claimed.
    (b) Each voucher, invoice, claim form, or other individual request 
or demand for property, services, or money constitutes a separate 
claim.
    (c) a claim shall be considered made to the authority, recipient, 
or party when such claim is actually made to an agent, fiscal 
intermediary, or other entity, including any State or political 
subdivision thereof, acting for or on behalf of the authority, 
recipient, or party.
    (d) Each claim for property, services, or money is subject to a 
civil penalty regardless of whether such property, services, or money 
is actually delivered or paid.
    (e) If the Government has made any payment (including transferred 
property or provided services) on a claim, a person subject to a civil 
penalty under paragraph (a)(1) of this section may also be subject to 
an assessment of not more than twice the amount of such claim or that 
portion thereof that is determined to be in violation of paragraph 
(a)(1) of this section. Such assessment shall be in lieu of damages 
sustained by the Government because of such claim.
    (f) Any person who makes a written statement that:
    (1) The person knows or has reason to know:
    (i) Asserts a material fact which is false, fictitious, or 
fraudulent; or
    (ii) Is false, fictitious, or fraudulent because it omits a 
material fact that the person making the statement has a duty to 
include in such statement.
    (2) Contains, or is accompanied by, an express certification or 
affirmation of the truthfulness and accuracy of the contents of the 
statement may be subject, in addition to any other remedy that may be 
prescribed by law, to a civil penalty of not more than $5,000 for each 
such statement.
    (g) Each written representation, certification, or affirmation 
constitutes a separate statement.
    (h) A statement shall be considered made to the authority when such 
statement is actually made to an agent, fiscal intermediary, or other 
entity, including any State or political subdivision thereof, acting 
for or on behalf of the authority.
    (i) No proof of specific intent to defraud is required to establish 
liability under this section.
    (j) In any case in which it is determined that more than one person 
is liable for making a claim or statement under this section, each such 
person may be held liable for a civil penalty under this section.
    (k) In any case in which it is determined that more than one person 
is liable for making a claim under this section on which the Government 
has made payment (including transferred property or provided services), 
an assessment may be imposed against any such person or jointly and 
severally against any combination of such persons.


Sec. 185.104  Investigation.

    (a) If an investigating official concludes that a subpoena pursuant 
to the authority conferred by 31 U.S.C. 3804(a) is warranted, he or she 
may issue a subpoena:
    (1) The subpoena so issued shall notify the person to whom it is 
addressed of the authority under which the subpoena is issued and shall 
identify the records or documents sought;
    (2) The investigating official may designate a person to act on his 
or her behalf to receive the documents sought; and
    (3) The person receiving such subpoena shall be required to tender 
to the investigating official, or the person designated to receive the 
documents, a certification that:
    (i) The documents sought have been produced;
    (ii) Such documents are not available and the reasons therefor; or
    (iii) Such documents, suitably identified, have been withheld based 
upon the assertion of an identified privilege.
    (b) If the investigating official concludes that an action under 
the Program Fraud Civil Remedies Act may be warranted, the 
investigating official shall submit a report containing the findings 
and conclusions of such investigation to the reviewing official.
    (c) Nothing in this section shall preclude or limit an 
investigating official's discretion to refer allegations directly to 
the Department of Justice for suit under the False Claims Act or other 
civil relief, or to defer or postpone a report or referral to the 
reviewing official to avoid interference with a criminal investigation 
or prosecution.
    (d) Nothing in this section modifies any responsibility of an 
investigating official to report violations of criminal law to the 
Attorney General.


Sec. 185.105  Review by the reviewing official.

    (a) If, based on the report of the investigating official under 
Sec. 185.104(b), the reviewing official determines that there is 
adequate evidence to believe that a person is liable under 
Sec. 185.103, the reviewing official shall transmit to the Attorney 
General a written notice of the reviewing official's intention to have 
a complaint issued under Sec. 185.107. Such notice shall include:
    (1) A statement of the reviewing official's reasons for issuing a 
complaint;
    (2) A statement specifying the evidence that supports the 
allegations of liability;
    (3) A description of the claims or statements upon which the 
allegations of liability are based;
    (4) An estimate of the amount of money, or the value of property, 
services, or other benefits, requested or demanded in violation of 
Sec. 185.103.
    (5) A statement of any exculpatory or mitigating circumstances that 
may relate to the claims or statements known by the reviewing official 
or the investigating official; and
    (6) A statement that there is a reasonable prospect of collecting 
an appropriate amount of penalties and assessments.


Sec. 185.106  Prerequisites for issuing a complaint.

    (a) The reviewing official may issue a complaint under Sec. 185.107 
only if:
    (1) The Department of Justice approves the issuance of a complaint 
in a written statement described in 31 U.S.C. 3803(b)(1), and
    (2) In the case of allegations of liability under Sec. 185.103(a) 
with respect to a claim, the reviewing official determines that, with 
respect to such claim or a group of related claims submitted at the 
same time such claim is submitted (as defined in paragraph (b) of this 
section), the amount of money, or the value of property or services, 
demanded or requested in violation of Sec. 185.103(a) does not exceed 
$150,000.
    (b) For the purposes of this section, a related group of claims 
submitted at the same time shall include only those claims arising from 
the same transaction (e.g., grant, loan, application, or contract) that 
are submitted simultaneously as part of a single request, demand, or 
submission.
    (c) Nothing in this section shall be construed to limit the 
reviewing official's authority to join in a single complaint against a 
person, claims that are unrelated or were not submitted simultaneously, 
regardless of the amount of money, or the value of property or 
services, demanded or requested.


Sec. 185.107  Complaint.

    (a) On or after the date the Department of Justice approves the 
issuance of a complaint in accordance with 31 U.S.C. 3803(b)(1), the 
reviewing official may serve a complaint on the defendant, as provided 
in Sec. 185.108.
    (b) The complaint shall state the following:
    (1) The allegations of liability against the defendant, including 
the statutory basis for liability, an identification of the claims or 
statements that are the basis for the alleged liability, and the 
reasons why liability allegedly rises from such claims or statements;
    (2) The maximum amount of penalties and assessments for which the 
defendant may be held liable;
    (3) Instructions for filing an answer, including a specific 
statement of the defendant's right to request a hearing and to be 
represented by a representative; and
    (4) The fact that failure to file an answer within 30 days of 
service of the complaint will result in the imposition of the maximum 
amount of penalties and assessments without right to appeal, as 
provided in Sec. 185.110.
    (c) At the same time the reviewing official serves the complaint, 
he or she shall serve the defendant with a copy of these regulations.


Sec. 185.108  Service of complaint.

    (a) Service of a complaint must be made by certified or registered 
mail or by delivery in any manner authorized by Rule 4(d) of the 
Federal Rules of Civil Procedure. Service is complete upon receipt.
    (b) Proof of service, stating the name and address of the person on 
whom the complaint was served, and the manner and date of service, may 
be made by:
    (1) Affidavit of the individual serving the complaint by delivery;
    (2) A United States Postal Service return receipt card 
acknowledging receipt; or
    (3) Written acknowledgment of receipt by the defendant or his or 
her representative.


Sec. 185.109  Answer.

    (a) The defendant may request a hearing in the answer filed with 
the reviewing official within 30 days of service of the complaint.
    (b) In the answer, the defendant:
    (1) Shall admit or deny each of the allegations of liability made 
in the complaint;
    (2) Shall state any defense on which the defendant intends to rely;
    (3) May state any reasons why the defendant contends that the 
penalties and assessments should be less than the statutory maximum; 
and
    (4) Shall state the name, address, and telephone number of the 
person authorized by the defendant to act as defendant's 
representative, if any.
    (c) If the defendant is unable to file an answer meeting the 
requirements of paragraph (b) of this section within the time provided, 
the defendant may, before the expiration of 30 days from service of the 
complaint, file with the reviewing official a general answer denying 
liability and requesting a hearing, and a request for an extension of 
time within which to file an answer meeting the requirements of 
paragraph (b) of this section. The reviewing official shall file 
promptly with the ALJ the complaint, the general answer denying 
liability, and the request for an extension of time as provided in 
Sec. 185.110. For good cause shown, the ALJ may grant the defendant up 
to 30 additional days within which to file an answer meeting the 
requirements of paragraph (b) of this section. The ALJ shall decide 
expeditiously whether the defendant shall be granted an additional 
period of time to file such answer.


Sec. 185.110  Default upon failure to file an answer.

    (a) If the defendant does not file an answer within the time 
prescribed in Sec. 185.109(a), the reviewing official may refer the 
complaint to the ALJ.
    (b) Upon the referral of the complaint, the ALJ shall promptly 
serve on the defendant in the manner prescribed in Sec. 185.108, a 
notice that an initial decision will be issued under this section.
    (c) The ALJ shall assume the facts alleged in the complaint to be 
true and, if such facts establish liability under Sec. 185.103, the ALJ 
shall issue an initial decision imposing the maximum amount of 
penalties and assessments allowed under the statute.
    (d) Except as otherwise provided in this section, by failing to 
file a timely answer the defendant waives any right to further review 
of the penalties and assessments imposed under paragraph (c) of this 
section and the initial decision shall become final and binding upon 
the parties 30 days after it is issued.
    (e) If, before such an initial decision becomes final, the 
defendant files a motion with the ALJ seeking to reopen on the grounds 
that extraordinary circumstances prevented the defendant from filing an 
answer, the initial decision shall be stayed pending the ALJ's decision 
on the motion.
    (f) If, on such motion, the defendant can demonstrate extraordinary 
circumstances excusing the failure to file a timely answer, the ALJ 
shall withdraw the initial decision in paragraph (c) of this section, 
if such a decision has been issued, and shall grant the defendant an 
opportunity to answer the complaint.
    (g) A decision of the ALJ denying a defendant's motion under 
paragraph (e) of this section is not subject to reconsideration under 
Sec. 185.138.
    (h) The defendant may appeal to the authority head the decision 
denying a motion to reopen by filing a notice of appeal with the 
authority head within 15 days after the ALJ denies the motion. The 
timely filing of a notice of appeal shall stay the initial decision 
until the authority head decides the issue.
    (i) If the defendant files a timely notice of appeal with the 
authority head, the ALJ shall forward the record of the proceeding to 
the authority head.
    (j) The authority head shall decide expeditiously whether 
extraordinary circumstances excuse the defendant's failure to file a 
timely answer based solely on the record before the ALJ.
    (k) If the authority head decides that extraordinary circumstances 
excused the defendant's failure to file a timely answer, the authority 
head shall remand the case to the ALJ with instructions to grant the 
defendant an opportunity to answer.
    (l) If the authority head decides that the defendant's failure to 
file a timely answer is not excused, the authority head shall reinstate 
the initial decision of the ALJ, which shall become final and binding 
upon the parties 30 days after the authority head issues such decision.


Sec. 185.111  Referral of complaint and answer to the ALJ.

    Upon receipt of an answer, the reviewing official shall file the 
complaint and answer with the ALJ.


Sec. 185.112  Notice of hearing.

    (a) When the ALJ receives the complaint and answer, the ALJ shall 
promptly serve a notice of hearing upon the defendant in the manner 
prescribed by Sec. 185.108. At the same time, the ALJ shall send a copy 
of such notice to the reviewing official or his or her designee.
    (b) Such notice shall include:
    (1) The tentative time and place, and the nature of the hearing;
    (2) The legal authority and jurisdiction under which the hearing is 
to be held;
    (3) The matters of fact and law to be asserted;
    (4) A description of the procedures for the conduct of the hearing;
    (5) The name, address, and telephone number of the representative 
of the Government and of the defendant, if any; and
    (6) Such other matters as the ALJ deems appropriate.


Sec. 185.113  Location of hearing.

    (a) The hearing may be held:
    (1) In any judicial district of the United States in which the 
defendant resides or transacts business;
    (2) In any judicial district of the United States in which the 
claim or statement in issue was made; or
    (3) In such other place as may be agreed upon by the parties and 
the ALJ.
    (b) Each party shall have the opportunity to present argument with 
respect to the location of the hearing.
    (c) The hearing shall be held at the place and at the time ordered 
by the ALJ.


Sec. 185.114  Parties to the hearing.

    (a) The parties to the hearing shall be the defendant and OPM.
    (b) Except where the authority head designates another 
representative, OPM shall be represented by the staff of the Office of 
the General Counsel.
    (c) Pursuant to 31 U.S.C. 3730(c)(5), a private plaintiff under the 
False Claims Act may participate in these proceedings to the extent 
authorized by the provisions of that Act.


Sec. 185.115  Separation of functions.

    (a) The investigating official, the reviewing official, and any 
employee or agent of the authority who takes part in investigating, 
preparing, or presenting a particular case may not, in such case or a 
factually related case:
    (1) Participate in the hearing as the ALJ;
    (2) Participate or advise in the review of the initial decision by 
the authority head; or
    (3) Make the collection of penalties and assessments under 31 
U.S.C. 3806.
    (b) The ALJ shall not be responsible to or subject to the 
supervision or direction of the investigating official or the reviewing 
official.


Sec. 185.116  Ex parte contacts.

    No party or person (except employees of the ALJ's office) shall 
communicate in any way with the ALJ on any matter at issue in a case, 
unless on notice and opportunity for all parties to participate. This 
provision does not prohibit a person or party from inquiring about the 
status of a case or asking routine questions concerning administrative 
functions or procedures.


Sec. 185.117  Disqualification of reviewing official or ALJ.

    (a) A reviewing official or ALJ in a particular case may disqualify 
himself or herself at any time.
    (b) A party may file with the ALJ a motion for disqualification of 
a reviewing official or an ALJ. Such motion shall be accompanied by an 
affidavit alleging personal bias or other reason for disqualification.
    (c) Such motion and affidavit shall be filed promptly upon the 
party's discovery of reasons requiring disqualification, or such 
objections shall be deemed waived.
    (d) Such affidavit shall state specific facts that support the 
party's belief that personal bias or other reason for disqualification 
exists and the time and circumstances of the party's discovery of such 
facts. It shall be accompanied by a certificate of the representative 
of record that it is made in good faith.
    (e) Upon the filing of such a motion and affidavit, the ALJ shall 
proceed no further in the case until he or she resolves the matter of 
disqualification in accordance with this section:
    (1) If the ALJ determines that a reviewing official is 
disqualified, the ALJ shall dismiss the complaint without prejudice.
    (2) If the ALJ disqualifies himself or herself, the case shall be 
reassigned promptly to another ALJ.
    (3) If the ALJ denies a motion to disqualify, the authority head 
may determine the matter only as part of his or her review of the 
initial decision upon appeal, if any.


Sec. 185.118  Rights of parties.

    Except as otherwise limited by this part, all parties may--
    (a) Be accompanied, represented, and advised by a representative;
    (b) Participate in any conference held by the ALJ;
    (c) Conduct discovery as provided under Sec. 185.122;
    (d) Agree to stipulations of fact of law, which shall be made a 
part of the record;
    (e) Present evidence relevant to the issues at the hearing;
    (f) Present and cross-examine witnesses;
    (g) Present oral arguments at the hearing as permitted by the ALJ; 
and
    (h) Submit written briefs and proposed findings of fact and 
conclusions of law after the hearing.


Sec. 185.119  Authority of the ALJ.

    (a) The ALJ shall conduct a fair and impartial hearing, avoid 
delay, maintain order, and assure that a record of the proceeding is 
made.
    (b) The ALJ has the authority to:
    (1) Set and change the date, time, and place of the hearing upon 
reasonable notice to the parties;
    (2) Continue or recess the hearing in whole or in part for a 
reasonable period of time;
    (3) Hold conferences to identify or simplify the issues, or to 
consider other matters that may aid in the expeditious disposition of 
the proceeding;
    (4) Administer oaths and affirmations;
    (5) Issue subpoenas requiring the attendance of witnesses and the 
production of documents at depositions or at hearings;
    (6) Rule on motions and other procedural matters:
    (7) Regulate the scope and timing of discovery;
    (8) Regulate the course of the hearing and the conduct of 
representatives and parties:
    (9) Examine witnesses;
    (10) Receive, rule on, exclude, or limit evidence;
    (11) Upon motion of a party, take official notice of facts;
    (12) Upon motion of a party, decide cases, in whole or in part, by 
summary judgment where there is no disputed issue of material fact;
    (13) Conduct any conference, argument, or hearing on motions in 
person or by telephone; and
    (14) Exercise such other authority as is necessary to carry out the 
responsibilities of the ALJ under this part.
    (c) ALJ does not have the authority to find Federal statutes or 
regulations invalid.


Sec. 185.120  Prehearing conferences.

    (a) The ALJ may schedule prehearing conferences as appropriate.
    (b) Upon the motion of any party, the ALJ shall schedule at least 
one prehearing conference at a reasonable time in advance of the 
hearing.
    (c) The ALJ may use prehearing conferences to discuss the 
following:
    (1) Simplification of the issues;
    (2) The necessity or desirability of amendments to the pleadings, 
including the need for a more definite statement;
    (3) Stipulations and admissions of fact or as to the contents and 
authenticity of documents;
    (4) Whether the parties can agree to submission of the case on a 
stipulated record;
    (5) Whether a party chooses to waive appearance at an oral hearing 
and to submit only documentary evidence (subject to the objection of 
other parties) and written argument;
    (6) Limitation of the number of witnesses;
    (7) Scheduling dates for the exchange of witness lists and of 
proposed exhibits;
    (8) Discovery;
    (9) The time and place for the hearing; and
    (10) Such other matters as may tend to expedite the fair and just 
disposition of the proceedings.
    (d) The ALJ may issue an order containing all matters agreed upon 
by the parties or ordered by the ALJ at a prehearing conference.


Sec. 185.121  Disclosure of documents.

    (a) Upon written request to the reviewing official, generally prior 
to the filing of an answer, the defendant may review any relevant and 
material documents, transcripts, records, and other materials that 
relate to the allegations set out in the complaint and upon which the 
findings and conclusions of the investigating official under 
Sec. 185.104(b) are based, unless such documents are subject to the 
privilege under Federal law. Upon payment of fees for duplication, the 
defendant may obtain copies of such documents.
    (b) Upon written request to the reviewing official, the defendant, 
may also obtain a copy of all exculpatory information in the possession 
of the reviewing official or investigating official relating to the 
allegations in the complaint, even if it is contained in a document 
that would otherwise be privileged. If the document would otherwise be 
privileged, only that portion containing exculpatory information must 
be disclosed.
    (c) The notice sent to the Attorney General from the reviewing 
official as described in Sec. 185.105 is not discoverable under any 
circumstances.
    (d) The defendant may file a motion to compel disclosure of the 
documents subject to the provisions of this section. Such a motion may 
only be filed with the ALJ following the filing of an answer pursuant 
to Sec. 185.109.


Sec. 185.122  Discovery.

    (a) The following types of discovery are authorized:
    (1) Requests for production of documents for inspection and 
copying;
    (2) Requests for admissions of the authenticity of any relevant 
document or of the truth of any relevant fact;
    (3) Written interrogatories; and
    (4) Depositions.
    (b) For the purpose of this section and Secs. 185.122 and 185.123, 
the term ``documents'' includes information, documents, reports, 
answers, records, accounts, papers, and other data and documentary 
evidence. Nothing contained herein shall be interpreted to require the 
creation of a document.
    (c) Unless mutually agreed to by the parties, discovery is 
available only as ordered by the ALJ. The ALJ shall regulate the timing 
of discovery.
    (d) Motions for discovery are to be handled according to the 
following procedures:
    (1) A party seeking discovery may file a motion with the ALJ. Such 
a motion shall be accompanied by a copy of the requested discovery, or 
in the case of depositions, a summary of the scope of the proposed 
deposition.
    (2) Within 10 days of service, a party may file an opposition to 
the motion and/or a motion for protective order as provided in 
Sec. 185.125.
    (3) The ALJ may grant a motion for discovery only if he or she 
finds that the discovery sought:
    (i) Is necessary for the expeditious, fair, and reasonable 
consideration of the issues;
    (ii) Is not unduly costly or burdensome;
    (iii) Will not unduly delay the proceeding; and
    (iv) Does not seek privileged information.
    (4) The burden of showing that discovery should be allowed is on 
the party seeking discovery.
    (5) The ALJ may grant discovery subject to a protective order under 
Sec. 185.125.
    (e) Depositions are to be handled in the following manner:
    (1) If a motion for deposition is granted, the ALJ shall issue a 
subpoena for the deponent, which may require the deponent to produce 
documents. The subpoena shall specify the time and place at which the 
deposition will be held.
    (2) The party seeking to depose shall serve the subpoena in the 
manner prescribed in Sec. 185.108.
    (3) The deponent may file with the ALJ within 10 days of service a 
motion to quash the subpoena or a motion for a protective order.
    (4) The party seeking to depose shall provide for the taking of a 
verbatim transcript of the deposition, which it shall make available to 
all other parties for inspection and copying.
    (f) Each party shall bear its own costs of discovery.


Sec. 185.123  Exchange of witness lists, statements, and exhibits.

    (a) At least 15 days before the hearing or at such other time as 
may be ordered by the ALJ, the parties shall exchange witness lists, 
copies of prior statements of proposed witnesses, and copies of 
proposed hearing exhibits, including copies of any written statements 
that the party intends to offer in lieu of live testimony in accordance 
with Sec. 185.133(b). At the time the documents listed in this 
paragraph are exchanged, any party that intends to rely on the 
transcript or deposition testimony in lieu of live testimony at the 
hearing, if permitted by the ALJ, shall provide each party with a copy 
of the specific pages of the transcript it intends to introduce into 
evidence.
    (b) If a party objects, the ALJ may not admit into evidence the 
testimony of any witness whose name does not appear on the witness list 
or any exhibit not provided to the opposing party as provided above 
unless the ALJ finds good cause for the failure or that there is no 
prejudice to the objecting party.
    (c) Unless another party objects within the time set by the ALJ, 
documents exchanged in accordance with paragraph (a) of this section 
shall be deemed to be authentic for the purpose of admissibility at the 
hearing.


Sec. 185.124  Subpoenas for attendance at hearing.

    (a) A party wishing to procure the appearance and testimony of any 
individual at the hearing may request that the ALJ issue a subpoena.
    (b) A subpoena requiring the attendance and testimony of an 
individual may also require the individual to produce documents at the 
hearing.
    (c) A party seeking a subpoena shall file a written request 
therefore not less than 15 days before the date fixed for the hearing 
unless otherwise allowed by the ALJ upon a showing of good cause. Such 
request shall specify any documents to be produced and shall designate 
the witnesses and describe the address and location thereof with 
sufficient particularity to permit such witnesses to be found.
    (d) The subpoena shall specify the time and place at which the 
witness is to appear and any documents the witness is to produce.
    (e) The party seeking the subpoena shall serve it in the manner 
prescribed in Sec. 185.108. A subpoena on a party or upon an individual 
under the control of a party may be served by first class mail.
    (f) A party or the individual to whom the subpoena is directed may 
file with the ALJ a motion to quash the subpoena within 10 days after 
service or on or before the time specified in the subpoena for 
compliance if it is less than 10 days after service.


Sec. 185.125  Protective order.

    (a) A party or a prospective witness or deponent may file a motion 
for a protective order with respect to discovery sought by an opposing 
party or with respect to the hearing, seeking to limit the availability 
or disclosure of evidence.
    (b) In issuing a protective order, the ALJ may make any order which 
justice requires to protect a party or person from annoyance, 
embarrassment, oppression, or undue burden or expense, including one or 
more of the following:
    (1) That the discovery not be had;
    (2) That the discovery may be had only on specified terms and 
conditions, including a designation of the time or place;
    (3) That the discovery may be had only through a method of 
discovery other than that requested;
    (4) That certain matters not be the subject of inquiry, or that the 
scope of discovery be limited to certain matters;
    (5) That discovery be conducted with no one present except persons 
designated by the ALJ;
    (6) That the contents of discovery or evidence be sealed;
    (7) That a sealed disposition be opened only by order of the ALJ;
    (8) That a trade secret or other confidential research, 
development, commercial information, or facts pertaining to any 
criminal investigation, proceeding, or other administrative 
investigation not be disclosed or be disclosed only in a designated 
way; or
    (9) That the parties simultaneously file specified documents or 
information enclosed in sealed envelopes to be opened as directed by 
the ALJ;


Sec. 185.126  Evidence.

    (a) The ALJ shall determine the admissibility of evidence.
    (b) Except as provided in this part, the ALJ shall not be bound by 
the Federal Rules of Evidence. However, the ALJ may apply the Federal 
Rules of Evidence where appropriate, e.g. to exclude unreliable 
evidence.
    (c) The ALJ shall exclude irrelevant and immaterial evidence.
    (d) Although relevant, evidence may be excluded if its probative 
value is substantially outweighed by the danger of unfair prejudice, 
confusion of the issues, or by considerations of undue delay or 
needless presentation of cumulative evidence.
    (e) Although relevant, evidence may be excluded if it is privileged 
under Federal law.
    (f) Evidence concerning offers of compromise or settlement shall be 
inadmissible to the extent provided in Rule 408 of the Federal Rules of 
Evidence.
    (g) The ALJ shall permit the parties to introduce rebuttal 
witnesses and evidence.
    (h) All documents and other evidence offered or taken for the 
record shall be open to examination by all parties, unless otherwise 
ordered by the ALJ pursuant to Sec. 185.125.


Sec. 185.127  Fees.

    The party requesting a subpoena shall pay the cost of the fees and 
mileage of any witness subpoenaed in the amounts that would be payable 
to a witness in a proceeding in United States District Court. A check 
for witness fees and mileage shall accompany the subpoena when served, 
except that when a subpoena is issued on behalf of the authority, a 
check for witness fees and mileage need not accompany the subpoena.


Sec. 185.128  Form, filing, and service of papers.

    (a) Form. Documents filed with the ALJ shall include an original 
and two copies. Every pleasing and paper filed in the proceeding shall 
contain a caption setting forth the title of the action, the case 
number assigned by the ALJ, and a designation of the paper (e.g., 
motion to quash subpoena). Every pleading and paper shall be signed by, 
and shall contain the address and telephone number of the party or the 
person on whose behalf the paper was filed, or his or her 
representative.
    (b) Filing. Papers are considered filed when they are mailed. Date 
of mailing may be established by a certificate from the party or its 
representative or by proof that the document was sent by certified or 
registered mail.
    (c) Service. A party filing a document with the ALJ shall, at the 
time of filing, serve a copy of such document on every other party. 
Service upon any party of any document other than those required to be 
served a prescribed in Sec. 185.108 shall be made by delivering a copy 
or by placing a copy of the document in the United States mail, postage 
prepaid and addressed, to the party's last known address. When a party 
is represented by a representative, service shall be made upon such 
representative in lieu of the actual party.
    (d) Proof of service. A certificate of the individual serving the 
document by personal delivery or by mail, setting forth the manner of 
service, shall be proof of service.


Sec. 185.129  Computation of time.

    (a) In computing any period of time under this pat or in an order 
issued thereunder, the time begins with the day following the act, 
event, or default, and includes the last day of the period, unless it 
is a Saturday, Sunday, or legal holiday observed by the Federal 
Government, in which event it includes the next business day.
    (b) When the period of time allowed is less than 7 days, 
intermediate Saturdays, Sundays, and legal holidays observed by the 
Federal Government shall be excluded from the computation.
    (c) Where a document has been served or issued by placing it in the 
mail, an additional 5 days will be added to the time permitted for any 
response.


Sec. 185.130  Motions.

    (a) Any application to the ALJ for an order or ruling shall be by 
motion. Motions shall state the relief sought, the authority relied 
upon, and the facts alleged, and shall be filed with the ALJ and served 
on all other parties.
    (b) Except for motions made during a prehearing conference or at 
the hearing, all motions shall be in writing. The ALJ may require that 
oral motions be reduced to writing.
    (c) Within 15 days after a written motion is served, or such other 
time as may be fixed by the ALJ, any party may file a response to such 
motion.
    (d) The ALJ may not grant a written motion before the time for 
filing responses thereto has expired, except upon consent of the 
parties or following a hearing on the motion, but may overrule or deny 
such motion without awaiting a response.
    (e) The ALJ shall make a reasonable effort to dispose of all 
outstanding motions prior to the beginning of the hearing.


Sec. 185.131  Sanctions.

    (a) The ALJ may sanction a person including any party or 
representative for the following reasons:
    (1) Failure to comply with an order, rule, or procedure governing 
the proceeding;
    (2) Failure to prosecute or defend an action; or
    (3) Engaging in other misconduct that interferes with the speedy, 
orderly, or fair conduct of the proceeding.
    (b) Any such sanction, including but not limited to those listed in 
paragraphs (c), (d), and (e) of this section, shall reasonably relate 
to the severity and nature of the failure or misconduct.
    (c) When a party fails to comply with an order, including an order 
for taking a deposition, the production of evidence within the party's 
control, or a request for admission, the ALJ may:
    (1) Draw an inference in favor of the requesting party with regard 
to the information sought;
    (2) In the case of requests for admission, deem each matter of 
which an admission is requested to be admitted;
    (3) Prohibit the party failing to comply with such order from 
introducing evidence concerning, or otherwise relying upon, testimony 
relating to the information sought; and
    (4) Strike any part of the pleadings or other submissions of the 
party failing to comply with such request.
    (d) If a party fails to prosecute or defend an action under this 
part commenced by service of a notice of hearing, the ALJ may dismiss 
the action or may issue an initial decision imposing penalties and 
assessments.
    (e) The ALJ may refuse to consider any motion, request, response, 
brief or other document which is not filed in a timely fashion.


Sec. 185.132  The hearing and burden of proof.

    (a) Where requested in accordance with Sec. 185.109 the ALJ shall 
conduct a hearing on the record in order to determine whether the 
defendant is liable for a civil penalty or assessment under 
Sec. 185.103 and, if so, the appropriate amount of any such civil 
penalty or assessment considering any aggravating or mitigating 
factors.
    (b) The authority shall prove defendant's liability and any 
aggravating factors by a preponderance of the evidence.
    (c) The defendant shall prove any affirmative defenses and any 
mitigating factors by a preponderance of the evidence.
    (d) The hearing shall be open to the public unless otherwise closed 
by the ALJ for good cause shown.


Sec. 185.133  Determining the amount of penalties and assessments.

    (a) In determining an appropriate amount of civil penalties and 
assessments, the ALJ and the authority head, upon appeal, should 
evaluate any circumstances that mitigate or aggravate the violation and 
should articulate in their opinions the reasons that support the 
penalties and assessments they impose. Because of the intangible costs 
of fraud, the expense of investigating such conduct, and the need to 
deter others who might be similarly tempted, double damages and a 
significant civil penalty ordinarily should be imposed.
    (b) Although not exhaustive, the following factors are among those 
that may influence the ALJ and the authority head in determining the 
amount of penalties and assessments to impose with respect to the 
misconduct (i.e., the false, fictitious, or fraudulent claims or 
statements) charged in the complaint:
    (1) The number of false, fictitious or fraudulent claims or 
statements;
    (2) The time period over which such claims or statements were made;
    (3) The degree of the defendant's culpability with respect to the 
misconduct;
    (4) The amount of money or the value of the property, services, or 
benefit falsely claimed;
    (5) The value of the Government's actual loss as a result of the 
misconduct, including foreseeable consequential damages and the costs 
of investigation;
    (6) The relationship of the amount imposed as civil penalties to 
the amount of the Government's loss;
    (7) The potential or actual impact of the misconduct upon public 
confidence in the management of Government programs and operations;
    (8) Whether the defendant has engaged in a pattern of the same or 
similar misconduct;
    (9) Whether the defendant attempted to conceal the misconduct;
    (10) The degree to which the defendant has involved others in the 
misconduct or in concealing it;
    (11) Where the misconduct of employees or agents is imputed to the 
defendant, the extent to which the defendant's practices fostered or 
attempted to preclude such misconduct;
    (12) Whether the defendant cooperated in or obstructed an 
investigation of the misconduct;
    (13) Whether the defendant assisted in identifying and prosecuting 
other wrongdoers;
    (14) The complexity of the program or transaction, and the degree 
of the defendant's sophistication with respect to it, including the 
extent of the defendant's prior participation in the program or in 
similar transactions;
    (15) Whether the defendant has been found, in any criminal, civil, 
or administrative proceeding to have engaged in similar misconduct or 
to have dealt dishonestly with the Government of the United States or 
of a State, directly or indirectly;
    (16) The need to deter the defendant and others from engaging in 
the same or similar misconduct; and
    (17) The potential impact of the misconduct on the rights of 
others.
    (c) Nothing in this section shall be construed to limit the ALJ or 
the authority head from considering any other factors that in any given 
case may mitigate or aggravate the offense for which penalties and 
assessments are imposed.


Sec. 185.134  Witnesses.

    (a) Except as provided in paragraph (b) of this section, testimony 
at the hearing shall be given orally by witnesses under oath or 
affirmation.
    (b) At the discretion of the ALJ, testimony may be admitted in the 
form of a written statement or deposition. Any such written statement 
must be provided to all other parties along with the last known address 
of such witness, in a manner which allows sufficient time for other 
parties to subpoena such witness for cross-examination at the hearing. 
Prior written statements of witnesses proposed to testify at the 
hearing and deposition transcripts shall be exchanged as provided in 
Sec. 185.123(a).
    (c) The ALJ shall exercise reasonable control over the mode and 
order of interrogating witnesses and presenting evidence so as to--
    (1) Make the interrogation and presentation effective for the 
ascertainment of the truth,
    (2) Avoid needless consumption of time, and
    (3) Protect witnesses from harassment or undue embarrassment.
    (d) The ALJ shall permit the parties to conduct such cross-
examination as may be required for a full and true disclosure of the 
facts.
    (e) At the discretion of the ALJ, a witness may be cross-examined 
on matters relevant to the proceedings without regard to the scope of 
his or her direct examination. To the extent permitted by the ALJ, 
cross-examination on matters outside the scope of direct examination 
shall be conducted in the manner of direct examination and may proceed 
by leading questions only if the witness is a hostile witness, an 
adverse party, or a witness identified with an adverse party.
    (f) Upon motion of any party, the ALJ shall order witnesses 
excluded so that they cannot hear the testimony of other witnesses. 
This rule does not authorize exclusion of the following:
    (1) A party who is an individual;
    (2) In the case of a party that is not an individual, an officer or 
employee of the party designated by the party's representative; or
    (3) An individual whose presence is shown by a party to be 
essential to the presentation of its case, including an individual 
employed by the Government engaged in assisting the representative for 
the Government.


Sec. 185.135  The record.

    (a) The hearing shall be recorded and transcribed. Transcripts may 
be obtained following the hearing from the ALJ at a cost not to exceed 
the actual cost of duplication.
    (b) The transcript of testimony, exhibits and other evidence 
admitted at the hearing, and all papers and requests filed in the 
proceeding constitute the record for the decision by the ALJ and the 
authority head.
    (c) The record may be inspected and copied (upon payment of a 
reasonable fee) by anyone, unless otherwise ordered by the ALJ pursuant 
to Sec. 185.125.


Sec. 185.136  Post-hearing briefs.

    The ALJ may require the parties to file post-hearing briefs. In any 
event, any party may file a post-hearing brief. The ALJ shall fix the 
time for filing such briefs, not to exceed 60 days from the date the 
parties receive the transcript of the hearing or, if applicable, the 
stipulated record. Such briefs may be accompanied by proposed findings 
of fact and conclusions of law. The ALJ may permit the parties to file 
reply briefs.


Sec. 185.137  Initial decision.

    (a) The ALJ shall issue an initial decision based only on the 
record, which shall contain findings of fact, conclusions of law, and 
the amount of any penalties and assessments imposed.
    (b) The findings of fact shall include a finding on each of the 
following issues:
    (1) Whether the claims or statements identified in the complaint, 
or any portions thereof, violate Sec. 185.103.
    (2) If the person is liable for penalties or assessments, the 
appropriate amount of any such penalties or assessments considering any 
mitigating or aggravating factors that he or she finds in the case, 
such as those described in Sec. 185.133.
    (c) The ALJ shall promptly serve the initial decision on all 
parties within 90 days after the time for submission of post-hearing 
briefs and reply briefs (if permitted) has expired. The ALJ shall at 
the same time serve all parties with a statement describing the right 
of any defendant determined to be liable for a civil penalty or 
assessment to file a motion for reconsideration with the ALJ or a 
notice of appeal with the authority head. If the ALJ fails to meet the 
deadline contained in this paragraph, he or she shall notify the 
parties of the reason for the delay and shall set a new deadline.
    (d) Unless the initial decision of the ALJ is timely appealed to 
the authority head, or a motion for reconsideration of the initial 
decision is timely filed, the initial decision shall constitute the 
final decision of the authority head and shall be final and binding on 
the parties 30 days after it is issued by the ALJ.


Sec. 185.138  Reconsideration of initial decision.

    (a) Except as provided in paragraph (d) of this section, any party 
may file a motion for reconsideration of the initial decision within 20 
days of receipt of the initial decision. If service was made by mail, 
receipt will be presumed to be 5 days from the date of mailing in the 
absence of contrary proof.
    (b) Every such motion must set forth the matters claimed to have 
been erroneously decided and the nature of the alleged errors. Such 
motion shall be accompanied by a supporting brief.
    (c) Responses to such motions shall be allowed only upon request of 
the ALJ.
    (d) No party may file a motion for reconsideration of an initial 
decision that has been revised in response to a previous motion for 
reconsideration.
    (e) The ALJ may dispose of a motion for reconsideration by denying 
it or by issuing a revised initial decision.
    (f) If the ALJ denies a motion for reconsideration, the initial 
decision shall constitute the final decision of the authority head and 
shall be final and binding on all parties 30 days after the ALJ denies 
the motion, unless the initial decision is timely appealed to the 
authority head in accordance with Sec. 185.139.
    (g) If the ALJ issues a revised initial decision, that decision 
shall constitute the final decision of the authority head and shall be 
final and binding on the parties 30 days after it is issued, unless it 
is timely appealed to the authority head in accordance with 
Sec. 185.139.


Sec. 185.139  Appeal to authority head.

    (a) Any defendant who has filed a timely answer and who is 
determined in an initial decision to be liable for a civil penalty or 
assessment may appeal such decision to the authority head by filing a 
notice of appeal with the authority head in accordance with this 
section:
    (1) A notice of appeal may be filed at any time within 30 days 
after the ALJ issues an initial decision. However, if another party 
files a motion for reconsideration under Sec. 185.138, consideration of 
the appeal shall be stayed automatically pending resolution of the 
motion for reconsideration.
    (2) If a motion for reconsideration is timely filed, a notice of 
appeal shall be filed within 30 days after the ALJ denies the motion or 
issues a revised initial decision, whichever applies.
    (3) If no motion for reconsideration is timely filed, a notice of 
appeal must be filed within 30 days after the ALJ issues the initial 
decision.
    (4) The authority head may extend the initial 30 day period for an 
additional 30 days if the defendant files with the authority head a 
request for an extension within the initial 30 day period and shows 
good cause.
    (b) If the defendant files a timely notice of appeal with the 
authority head and the time for filing motions for reconsideration 
under Sec. 185.138 has expired, the ALJ shall forward the record of the 
proceeding to the authority head.
    (c) A notice of appeal shall be accompanied by a written brief 
specifying exceptions to the initial decision and reasons supporting 
the exceptions.
    (d) The representative for OPM may file a brief in opposition to 
exceptions within 30 days of receiving the notice of appeal and 
accompanying brief.
    (e) There is no right to appear personally before the authority 
head.
    (f) There is no right to appeal an interlocutory ruling by the ALJ.
    (g) In reviewing the initial decision, the authority head shall not 
consider any objection that was not raised before the ALJ unless the 
objecting party can demonstrate extraordinary circumstances causing the 
failure to raise the objection.
    (h) If any party demonstrates to the satisfaction of the authority 
head that additional evidence not presented at such hearing is material 
and that there were reasonable grounds for the failure to present such 
evidence at such hearing, the authority head shall remand the matter to 
the ALJ for consideration of such additional evidence.
    (i) The authority head may affirm, reduce, reverse, compromise, 
remand or settle any penalty or assessment determined by the ALJ in any 
initial decision.
    (j) The authority head shall promptly serve each party to the 
appeal with a copy of the decision of the authority head and a 
statement describing the right of any person determined to be liable 
for a penalty or assessment to seek judicial review.
    (k) Unless a petition for review is filled as provided in 31 U.S.C. 
3805 after a defendant has exhausted all administrative remedies under 
this part and within 60 days after the date on which the authority head 
serves the defendant with a copy of the authority head's decision, a 
determination that a defendant is liable under Sec. 185.103 is final 
and not subject to judicial review.


Sec. 185.140  Stays ordered by the Department of Justice.

    If at any time, the Attorney General or an Assistant Attorney 
General designated by the Attorney General transmits to the authority 
head a written finding that continuation of the administrative process 
described in this part with respect to a claim or statement may 
adversely affect any pending or potential criminal or civil action 
related to such claim or statement, the authority head shall stay the 
process immediately. The authority head may order the process resumed 
only upon receipt of the written authorization of the Attorney General 
or of the Assistant Attorney General who ordered the stay.


Sec. 185.141  Stay pending appeal.

    (a) An initial decision is stayed automatically pending disposition 
of a motion for reconsideration or of an appeal to the authority head.
    (b) No administrative stay is available following a final decision 
of the authority head.


Sec. 185.142  Judicial review.

    Section 3805 of title 31, United States Code, authorizes judicial 
review by an appropriate United States District Court of a final 
decision of the authority head imposing penalties and/or assessments 
under this part and specifies the procedures for such review.


Sec. 185.143  Collection of civil penalties and assessments.

    Sections 3806 and 3808(b) of title 31, United States Code, 
authorize actions for collection of civil penalties and assessments 
imposed under this part and specify the procedures for such actions.


Sec. 185.144  Right to administrative offset.

    The amount of any penalty or assessment which has become final, or 
for which a judgment has been entered under Sec. 185.142 or 
Sec. 185.143, or any amount agreed upon in a compromise or settlement 
under Sec. 185.146, may be collected by administrative offset under 31 
U.S.C. 3716, except that an administrative offset may not be made under 
this subsection against a refund of an overpayment of Federal taxes, 
then or later owing by the United States to the defendant.


Sec. 185.145  Deposit in Treasury of the United States.

    All amounts collected pursuant to this part shall be deposited as 
miscellaneous receipts in the Treasury of the United States, except as 
provided in 31 U.S.C. 3806(g).


Sec. 185.146  Compromise or settlement.

    (a) Parties may make offers of compromise or settlement at any 
time.
    (b) The reviewing official has the exclusive authority to 
compromise or settle a case under this part at any time after the date 
on which the reviewing official is permitted to issue a complaint and 
before the date on which the ALJ issues an initial decision.
    (c) The authority head has exclusive authority to compromise or 
settle a case under this part at any time after the date on which the 
ALJ issues an initial decision, except during the pendency of any 
review under Sec. 185.142 or during the pendency of any action to 
collect penalties and assessments under Sec. 185.143.
    (d) The Attorney General has exclusive authority to compromise or 
settle a case under this part during the pendency of any review under 
Sec. 185.142 or of any action to recover penalties and assessments 
under 31 U.S.C. 3806.
    (e) The investigating official may recommend settlement terms to 
the reviewing official, the authority head, or the Attorney General, as 
appropriate. The reviewing official may recommend settlement terms to 
the authority head, or the Attorney General, as appropriate.
    (f) Any compromise or settlement must be in writing.


Sec. 185.147  Limitations.

    (a) The notice of hearing with respect to a claim or statement must 
be served in the manner specified in Sec. 185.108 within 6 years after 
the date on which such a claim or statement is made.
    (b) If the defendant fails to file a timely answer, service of a 
notice under Sec. 185.110(b) shall be deemed a notice of hearing for 
purposes of this section.
    (c) The statute of limitations may be extended by written agreement 
of the parties.

[FR Doc. 94-11365 Filed 5-11-94; 8:45 am]
BILLING CODE 6325-01-M