S 386

S 386 IS

To improve enforcement of mortgage fraud, securities fraud, financial institution fraud, and other frauds related to federal assistance and relief programs, for the recovery of funds lost to these frauds, and for other purposes.

February 5, 2009

Mr. LEAHY (for himself, Mr. GRASSLEY, and Mr. KAUFMAN) introduced the following bill; which was read twice and referred to the Committee on the Judiciary

To improve enforcement of mortgage fraud, securities fraud, financial institution fraud, and other frauds related to federal assistance and relief programs, for the recovery of funds lost to these frauds, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Fraud Enforcement and Recovery Act of 2009’ or ‘FERA’.

SEC. 2. AMENDMENTS TO IMPROVE MORTGAGE, SECURITIES, AND FINANCIAL FRAUD RECOVERY AND ENFORCEMENT.

(a) Definition of Financial Institution Amended To Include Mortgage Lending Business- Section 20 of title 18, United States Code, is amended--

(1) in paragraph (8), by striking ‘or’ after the semicolon;

(2) in paragraph (9), by striking the period and inserting ‘; or’; and

(3) by inserting at the end the following:

‘(10) a mortgage lending business (as defined in section 27 of this title) or any person or entity that makes in whole or in part a federally-related mortgage loan as defined in 12 U.S.C. 2602(1).’.

(b) Mortgage Lending Business Defined-

(1) IN GENERAL- Chapter 1 of title 18, United States Code, is amended by inserting after section 26 the following:

‘Sec. 27. Mortgage lending business defined

‘In this title, the term ‘mortgage lending business’ means an organization which finances or refinances any debt secured by an interest in real estate, including private mortgage companies and any subsidiaries of such organizations, and whose activities affect interstate or foreign commerce.’.

(2) CHAPTER ANALYSIS- The chapter analysis for chapter 1 of title 18, United States Code, is amended by adding at the end the following:

‘27. Mortgage lending business defined.’.

(c) False Statements in Mortgage Applications Amended To Include False Statements by Mortgage Brokers and Agents of Mortgage Lending Businesses- Section 1014 of title 18, United States Code, is amended by--

(1) striking ‘or’ after ‘the International Banking Act of 1978),’; and

(2) inserting after ‘section 25(a) of the Federal Reserve Act’ the following: ‘or a mortgage lending business whose activities affect interstate or foreign commerce, or any person or entity that makes in whole or in part a federally-related mortgage loan as defined in 12 U.S.C. 2602(1)’.

(d) Major Fraud Against the Government Amended To Include Economic Relief and Troubled Asset Relief Program Funds- Section 1031(a) of title 18, United States Code, is amended by--

(1) inserting after ‘or promises, in’ the following: ‘any grant, contract, subcontract, subsidy, loan, guarantee, insurance or other form of Federal assistance, including through the Troubled Assets Relief Program, an economic stimulus, recovery or rescue plan provided by the Government, or the Government’s purchase of any preferred stock in a company, or’; and

(2) striking ‘the contract, subcontract’ and inserting ‘such grant, contract, subcontract, subsidy, loan, guarantee, insurance or other form of Federal assistance,’.

(e) Securities Fraud Amended To Include Fraud Involving Options and Futures in Commodities-

(1) IN GENERAL- Section 1348 of title 18, United States Code, is amended--

(A) in the caption, by inserting ‘and commodities’ after ‘Securities’;

(B) by inserting ‘any commodity for future delivery, or any option on a commodity or a commodity for future delivery, or’ after ‘any person in connection with’ ; and

(C) by inserting ‘any commodity for future delivery, or any option on a commodity or a commodity for future delivery, or’ after ‘in connection with the purchase or sale of’.

(2) CHAPTER ANALYSIS- The item for section 1348 in the chapter analysis for chapter 63 of title 18, United States Code, is amended by inserting ‘and commodities’ after ‘Securities’.

(f) Money Laundering Amended To Define Proceeds of Specified Unlawful Activity- Section 1956(c) of title 18, United States Code, is amended--

(1) in paragraph (8), by striking the period and inserting ‘; and’; and

(2) by inserting at the end the following:

‘(9) the term ‘proceeds’ means any property derived from or obtained or retained, directly or indirectly, through the commission of a specified unlawful activity, including the gross receipts of such specified unlawful activity.’.

(g) Making the International Money Laundering Statute Apply to Tax Evasion- Section 1956(a)(2)(A) of title 18, United States Code, is amended by--

(1) inserting ‘(i)’ before ‘with the intent to promote’; and

(2) adding at the end the following:

‘(ii) with the intent to engage in conduct constituting a violation of section 7201 or 7206 of the Internal Revenue Code of 1986; or’.

SEC. 3. ADDITIONAL FUNDING FOR INVESTIGATORS AND PROSECUTORS FOR MORTGAGE FRAUD, SECURITIES FRAUD, AND OTHER CASES INVOLVING FEDERAL ECONOMIC ASSISTANCE.

(a) In General-

(1) AUTHORIZATION- There is authorized to be appropriated to the Attorney General, to remain available until expended, $155,000,000 for each of the fiscal years 2010 and 2011, for the purposes of investigations, prosecutions, and civil proceedings involving federal assistance programs and financial institutions, including financial institutions to which this Act and amendments made by this Act apply.

(2) ALLOCATIONS- With respect to fiscal years 2010 and 2011, the amount authorized to be appropriated under paragraph (1) shall be allocated as follows:

(A) Federal Bureau of Investigation: $65,000,000.

(B) The offices of the United States Attorneys: $50,000,000.

(C) The criminal division of the Department of Justice: $20,000,000.

(D) The civil division of the Department of Justice: $15,000,000.

(E) The tax division of the Department of Justice: $5,000,000.

(b) Additional Appropriations for the Postal Inspection Service- There is authorized to be appropriated to the Postal Inspection Service of the United States Postal Service, $30,000,000 for each of the fiscal years 2010 and 2011 for investigations involving federal assistance programs and financial institutions, including financial institutions to which this Act and amendments made by this Act apply.

(c) Additional Appropriations for the Inspector General for the Housing and Urban Development Department- There is authorized to be appropriated to the Inspector General of the Department of Housing and Urban Development, $30,000,000 for each of the fiscal years 2010 and 2011 for investigations involving Federal assistance programs and financial institutions, including financial institutions to which this Act and amendments made by this Act apply.

(d) Use of Funds- The funds authorized to be appropriated under subsections (a), (b), and (c), shall be limited to cover the costs of each listed agency or department for investigating possible criminal, civil, or administrative violations and for prosecuting criminal, civil, or administrative proceedings involving financial crimes and crimes against Federal assistance programs, including mortgage fraud, securities fraud, financial institution fraud, and other frauds related to Federal assistance and relief programs

(e) Report to Congress- Following the final expenditure of all funds appropriated under this section that were authorized by subsections (a), (b), and (c), the Attorney General, in consultation with the United States Postal Inspection Service and the Inspector General for the Department of Housing and Urban Development, shall submit a joint report to Congress identifying--

(1) the amounts expended under subsections (a), (b), and (c) and a certification of compliance with the requirements listed in subsection (d); and

(2) the amounts recovered as a result of criminal or civil restitution, fines, penalties, and other monetary recoveries resulting from criminal, civil, or administrative proceedings and settlements undertaken with funds authorized by this Act.

SEC. 4. CLARIFICATIONS TO THE FALSE CLAIMS ACT TO REFLECT THE ORIGINAL INTENT OF THE LAW.