Begun and held at the City of Washington on Tuesday,CommentsClose CommentsPermalink

the sixth day of January, two thousand and nineCommentsClose CommentsPermalink

An ActCommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.CommentsClose CommentsPermalink

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

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





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





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





(3) by inserting at the end the following:CommentsClose CommentsPermalink





‘(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 section 3 of the Real Estate Settlement Procedures Act of 1974.’.CommentsClose CommentsPermalink





(b) Mortgage Lending Business Defined-CommentsClose CommentsPermalink





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

-‘Sec. 27. Mortgage lending business definedCommentsClose CommentsPermalink

‘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.’.CommentsClose CommentsPermalink





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





‘27. Mortgage lending business defined.’.CommentsClose CommentsPermalink





(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--CommentsClose CommentsPermalink





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





(2) inserting after ‘section 25(a) of the Federal Reserve Act’ the following: ‘, or a mortgage lending business, or any person or entity that makes in whole or in part a federally related mortgage loan as defined in section 3 of the Real Estate Settlement Procedures Act of 1974’.CommentsClose CommentsPermalink





(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--CommentsClose CommentsPermalink





(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 Asset Relief Program, an economic stimulus, recovery or rescue plan provided by the Government, or the Government’s purchase of any troubled asset as defined in the Emergency Economic Stabilization Act of 2008, or in’;CommentsClose CommentsPermalink





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





(3) striking ‘for such property or services’.CommentsClose CommentsPermalink





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





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





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





(B) in paragraph (1), by inserting ‘any commodity for future delivery, or any option on a commodity for future delivery, or’ after ‘any person in connection with’; andCommentsClose CommentsPermalink





(C) in paragraph (2), by inserting ‘any commodity for future delivery, or any option on a commodity for future delivery, or’ after ‘in connection with the purchase or sale of’.CommentsClose CommentsPermalink





(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’.CommentsClose CommentsPermalink





(f) Money Laundering Amended To Define Proceeds of Specified Unlawful Activity-CommentsClose CommentsPermalink





(1) MONEY LAUNDERING- Section 1956(c) of title 18, United States Code, is amended--CommentsClose CommentsPermalink





(A) in paragraph (8), by striking the period and inserting ‘; and’; andCommentsClose CommentsPermalink





(B) by inserting at the end the following:CommentsClose CommentsPermalink





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





(2) MONETARY TRANSACTIONS- Section 1957(f) of title 18, United States Code, is amended by striking paragraph (3) and inserting the following:CommentsClose CommentsPermalink





‘(3) the terms ‘specified unlawful activity’ and ‘proceeds’ shall have the meaning given those terms in section 1956 of this title.’.CommentsClose CommentsPermalink





(g) Sense of the Congress and Report Concerning Required Approval for Merger Cases-CommentsClose CommentsPermalink





(1) SENSE OF CONGRESS- It is the sense of the Congress that no prosecution of an offense under section 1956 or 1957 of title 18, United States Code, should be undertaken in combination with the prosecution of any other offense, without prior approval of the Attorney General, the Deputy Attorney General, the Assistant Attorney General in charge of the Criminal Division, a Deputy Assistant Attorney General in the Criminal Division, or the relevant United States Attorney, if the conduct to be charged as ‘specified unlawful activity’ in connection with the offense under section 1956 or 1957 is so closely connected with the conduct to be charged as the other offense that there is no clear delineation between the two offenses.CommentsClose CommentsPermalink





(2) REPORT- One year after the date of the enactment of this Act, and at the end of each of the four succeeding one-year periods, the Attorney General shall report to the House and Senate Committees on the Judiciary on efforts undertaken by the Department of Justice to ensure that the review and approval described in paragraph (1) takes place in all appropriate cases. The report shall include the following:CommentsClose CommentsPermalink





(A) The number of prosecutions described in paragraph (1) that were undertaken during the previous one-year period after prior approval by an official described in paragraph (1), classified by type of offense and by the approving official.CommentsClose CommentsPermalink





(B) The number of prosecutions described in paragraph (1) that were undertaken during the previous one-year period without such prior approval, classified by type of offense, and the reasons why such prior approval was not obtained.CommentsClose CommentsPermalink





(C) The number of times during the previous year in which an approval described in paragraph (1) was denied.CommentsClose CommentsPermalink

(a) Authorization of Additional Appropriations for the Department of Justice-CommentsClose CommentsPermalink





(1) IN GENERAL- There is authorized to be appropriated to the Attorney General, $165,000,000 for each of the fiscal years 2010 and 2011, for the purposes of investigations and prosecutions and civil and administrative proceedings involving Federal assistance programs and financial institutions, including financial institutions to which this Act and amendments made by this Act apply.CommentsClose CommentsPermalink





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





(A) Federal Bureau of Investigation: $75,000,000 for fiscal year 2010 and $65,000,000 for fiscal year 2011, an appropriate percentage of which amounts shall be used to investigate mortgage fraud.CommentsClose CommentsPermalink





(B) The offices of the United States Attorneys: $50,000,000 for each fiscal year.CommentsClose CommentsPermalink





(C) The criminal division of the Department of Justice: $20,000,000 for each fiscal year.CommentsClose CommentsPermalink





(D) The civil division of the Department of Justice: $15,000,000 for each fiscal year.CommentsClose CommentsPermalink





(E) The tax division of the Department of Justice: $5,000,000 for each fiscal year.CommentsClose CommentsPermalink





(b) Authorization of 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.CommentsClose CommentsPermalink





(c) Authorization of Additional Appropriations for the Inspector General for the Department of Housing and Urban Development- 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.CommentsClose CommentsPermalink





(d) Authorization of Additional Appropriations for the United States Secret Service- There is authorized to be appropriated to the United States Secret Service of the Department of Homeland Security, $20,000,000 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.CommentsClose CommentsPermalink





(e) Authorization of Additional Appropriations for the Securities and Exchange Commission-CommentsClose CommentsPermalink





(1) IN GENERAL- There is authorized to be appropriated to the Securities and Exchange Commission, $20,000,000 for each of the fiscal years 2010 and 2011 for investigations and enforcement proceedings involving financial institutions, including financial institutions to which this Act and amendments made by this Act apply.CommentsClose CommentsPermalink





(2) INSPECTOR GENERAL- There is authorized to be appropriated to the Securities and Exchange Commission, $1,000,000 for each of the fiscal years 2010 and 2011 for the salaries and expenses of the Office of the Inspector General of the Securities and Exchange Commission.CommentsClose CommentsPermalink





(f) Use of Funds-CommentsClose CommentsPermalink





(1) IN GENERAL- The funds appropriated pursuant to authorization under this section shall be limited to covering the costs of each listed agency or department for investigating possible criminal, civil, or administrative violations and for criminal, civil, or administrative proceedings involving financial crimes and crimes against Federal assistance programs, including mortgage fraud, securities and commodities fraud, financial institution fraud, and other frauds related to Federal assistance and relief programs.CommentsClose CommentsPermalink





(2) FUNDS FOR TRAINING AND RESEARCH- Funds authorized to be appropriated under this section may be used and expended for programs for improving the detection, investigation, and prosecution of economic crime including financial fraud and mortgage fraud. Funds allocated under this section may be allocated to programs which assist State and local criminal justice agencies to develop, establish, and maintain intelligence-focused policing strategies and related information sharing; provide training and investigative support services to State and local criminal justice agencies to provide such agencies with skills and resources needed to investigate and prosecute such criminal activities and related criminal activities; provide research support, establish partnerships, and provide other resources to aid State and local criminal justice agencies to prevent, investigate, and prosecute such criminal activities and related problems; provide information and research to the general public to facilitate the prevention of such criminal activities; and any other programs specified by the Attorney General as furthering the purposes of this Act.CommentsClose CommentsPermalink





(g) Additional Nature of Authorizations; Availability- The amounts authorized under this section are in addition to amounts otherwise authorized in other Acts and shall remain available until expended.CommentsClose CommentsPermalink





(h) Report to Congress- Following the final expenditure of all funds appropriated pursuant to authorization under this section, the Attorney General, in consultation with the United States Postal Inspection Service, the Inspector General for the Department of Housing and Urban Development, the Secretary of Homeland Security, and the Commissioner of the Securities and Exchange Commission, shall submit a report to Congress identifying--CommentsClose CommentsPermalink





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





(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.CommentsClose CommentsPermalink

(a) Clarification of the False Claims Act- Section 3729 of title 31, United States Code, is amended--CommentsClose CommentsPermalink





(1) by striking subsection (a) and inserting the following:CommentsClose CommentsPermalink





‘(a) Liability for Certain Acts-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Subject to paragraph (2), any person who--CommentsClose CommentsPermalink





‘(A) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval;CommentsClose CommentsPermalink





‘(B) knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim;CommentsClose CommentsPermalink





‘(C) conspires to commit a violation of subparagraph (A), (B), (D), (E), (F), or (G);CommentsClose CommentsPermalink





‘(D) has possession, custody, or control of property or money used, or to be used, by the Government and knowingly delivers, or causes to be delivered, less than all of that money or property;CommentsClose CommentsPermalink





‘(E) is authorized to make or deliver a document certifying receipt of property used, or to be used, by the Government and, intending to defraud the Government, makes or delivers the receipt without completely knowing that the information on the receipt is true;CommentsClose CommentsPermalink





‘(F) knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the Government, or a member of the Armed Forces, who lawfully may not sell or pledge property; orCommentsClose CommentsPermalink





‘(G) knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government,CommentsClose CommentsPermalink





is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note; Public Law 104-410), plus 3 times the amount of damages which the Government sustains because of the act of that person.CommentsClose CommentsPermalink





‘(2) REDUCED DAMAGES- If the court finds that--CommentsClose CommentsPermalink





‘(A) the person committing the violation of this subsection furnished officials of the United States responsible for investigating false claims violations with all information known to such person about the violation within 30 days after the date on which the defendant first obtained the information;CommentsClose CommentsPermalink





‘(B) such person fully cooperated with any Government investigation of such violation; andCommentsClose CommentsPermalink





‘(C) at the time such person furnished the United States with the information about the violation, no criminal prosecution, civil action, or administrative action had commenced under this title with respect to such violation, and the person did not have actual knowledge of the existence of an investigation into such violation,CommentsClose CommentsPermalink





the court may assess not less than 2 times the amount of damages which the Government sustains because of the act of that person.CommentsClose CommentsPermalink





‘(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.’;CommentsClose CommentsPermalink





(2) by striking subsections (b) and (c) and inserting the following:CommentsClose CommentsPermalink





‘(b) Definitions- For purposes of this section--CommentsClose CommentsPermalink





‘(1) the terms ‘knowing’ and ‘knowingly’--CommentsClose CommentsPermalink





‘(A) mean that a person, with respect to information--CommentsClose CommentsPermalink





‘(i) has actual knowledge of the information;CommentsClose CommentsPermalink





‘(ii) acts in deliberate ignorance of the truth or falsity of the information; orCommentsClose CommentsPermalink





‘(iii) acts in reckless disregard of the truth or falsity of the information; andCommentsClose CommentsPermalink





‘(B) require no proof of specific intent to defraud;CommentsClose CommentsPermalink





‘(2) the term ‘claim’--CommentsClose CommentsPermalink





‘(A) means any request or demand, whether under a contract or otherwise, for money or property and whether or not the United States has title to the money or property, that--CommentsClose CommentsPermalink





‘(i) is presented to an officer, employee, or agent of the United States; orCommentsClose CommentsPermalink





‘(ii) is made to a contractor, grantee, or other recipient, if the money or property is to be spent or used on the Government’s behalf or to advance a Government program or interest, and if the United States Government--CommentsClose CommentsPermalink





‘(I) provides or has provided any portion of the money or property requested or demanded; orCommentsClose CommentsPermalink





‘(II) will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded; andCommentsClose CommentsPermalink





‘(B) does not include requests or demands for money or property that the Government has paid to an individual as compensation for Federal employment or as an income subsidy with no restrictions on that individual’s use of the money or property;CommentsClose CommentsPermalink





‘(3) the term ‘obligation’ means an established duty, whether or not fixed, arising from an express or implied contractual, grantor-grantee, or licensor-licensee relationship, from a fee-based or similar relationship, from statute or regulation, or from the retention of any overpayment; andCommentsClose CommentsPermalink





‘(4) the term ‘material’ means having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.’;CommentsClose CommentsPermalink





(3) by redesignating subsections (d) and (e) as subsections (c) and (d), respectively; andCommentsClose CommentsPermalink





(4) in subsection (c), as redesignated, by striking ‘subparagraphs (A) through (C) of subsection (a)’ and inserting ‘subsection (a)(2)’.CommentsClose CommentsPermalink





(b) Intervention by the Government- Section 3731(b) of title 31, United States Code, is amended--CommentsClose CommentsPermalink





(1) by redesignating subsection (c) as subsection (d);CommentsClose CommentsPermalink





(2) by redesignating subsection (d) as subsection (e); andCommentsClose CommentsPermalink





(3) by inserting the new subsection (c):CommentsClose CommentsPermalink





‘(c) If the Government elects to intervene and proceed with an action brought under 3730(b), the Government may file its own complaint or amend the complaint of a person who has brought an action under section 3730(b) to clarify or add detail to the claims in which the Government is intervening and to add any additional claims with respect to which the Government contends it is entitled to relief. For statute of limitations purposes, any such Government pleading shall relate back to the filing date of the complaint of the person who originally brought the action, to the extent that the claim of the Government arises out of the conduct, transactions, or occurrences set forth, or attempted to be set forth, in the prior complaint of that person.’.CommentsClose CommentsPermalink





(c) Civil Investigative Demands- Section 3733 of title 31, United States Code, is amended--CommentsClose CommentsPermalink





(1) in subsection (a)--CommentsClose CommentsPermalink





(A) in paragraph (1)--CommentsClose CommentsPermalink





(i) in the matter preceding subparagraph (A)--CommentsClose CommentsPermalink





(I) by inserting ‘, or a designee (for purposes of this section),’ after ‘Whenever the Attorney General’; andCommentsClose CommentsPermalink





(II) by striking ‘the Attorney General may, before commencing a civil proceeding under section 3730 or other false claims law,’ and inserting ‘the Attorney General, or a designee, may, before commencing a civil proceeding under section 3730(a) or other false claims law, or making an election under section 3730(b),’; andCommentsClose CommentsPermalink





(ii) in the matter following subparagraph (D)--CommentsClose CommentsPermalink





(I) by striking ‘may not delegate’ and inserting ‘may delegate’; andCommentsClose CommentsPermalink





(II) by adding at the end the following: ‘Any information obtained by the Attorney General or a designee of the Attorney General under this section may be shared with any qui tam relator if the Attorney General or designee determine it is necessary as part of any false claims act investigation.’; andCommentsClose CommentsPermalink





(B) in paragraph (2)(G), by striking the second sentence;CommentsClose CommentsPermalink





(2) in subsection (i)(2)--CommentsClose CommentsPermalink





(A) in subparagraph (B), by striking ‘, who is authorized for such use under regulations which the Attorney General shall issue’; andCommentsClose CommentsPermalink





(B) in subparagraph (C), by striking ‘Disclosure of information to any such other agency shall be allowed only upon application, made by the Attorney General to a United States district court, showing substantial need for the use of the information by such agency in furtherance of its statutory responsibilities.’; andCommentsClose CommentsPermalink





(3) in subsection (l)--CommentsClose CommentsPermalink





(A) in paragraph (6), by striking ‘and’ after the semicolon;CommentsClose CommentsPermalink





(B) in paragraph (7), by striking the period and inserting ‘; and’; andCommentsClose CommentsPermalink





(C) by adding at the end the following:CommentsClose CommentsPermalink





‘(8) the term ‘official use’ means any use that is consistent with the law, and the regulations and policies of the Department of Justice, including use in connection with internal Department of Justice memoranda and reports; communications between the Department of Justice and a Federal, State, or local government agency, or a contractor of a Federal, State, or local government agency, undertaken in furtherance of a Department of Justice investigation or prosecution of a case; interviews of any qui tam relator or other witness; oral examinations; depositions; preparation for and response to civil discovery requests; introduction into the record of a case or proceeding; applications, motions, memoranda and briefs submitted to a court or other tribunal; and communications with Government investigators, auditors, consultants and experts, the counsel of other parties, arbitrators and mediators, concerning an investigation, case or proceeding.’.CommentsClose CommentsPermalink





(d) Relief From Retaliatory Actions- Section 3730(h) of title 31, United States Code, is amended to read as follows:CommentsClose CommentsPermalink





‘(h) Relief From Retaliatory Actions-CommentsClose CommentsPermalink





‘(1) IN GENERAL- Any employee, contractor, or agent shall be entitled to all relief necessary to make that employee, contractor, or agent whole, if that employee, contractor, or agent is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done by the employee, contractor, or agent on behalf of the employee, contractor, or agent or associated others in furtherance of other efforts to stop 1 or more violations of this subchapter.CommentsClose CommentsPermalink





‘(2) RELIEF- Relief under paragraph (1) shall include reinstatement with the same seniority status that employee, contractor, or agent would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys’ fees. An action under this subsection may be brought in the appropriate district court of the United States for the relief provided in this subsection.’.CommentsClose CommentsPermalink





(e) False Claims Jurisdiction- Section 3732 of title 31, United States Code, is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(c) Service on State or Local Authorities- With respect to any State or local government that is named as a co-plaintiff with the United States in an action brought under subsection (b), a seal on the action ordered by the court under section 3730(b) shall not preclude the Government or the person bringing the action from serving the complaint, any other pleadings, or the written disclosure of substantially all material evidence and information possessed by the person bringing the action on the law enforcement authorities that are authorized under the law of that State or local government to investigate and prosecute such actions on behalf of such governments, except that such seal applies to the law enforcement authorities so served to the same extent as the seal applies to other parties in the action.’.CommentsClose CommentsPermalink





(f) Effective Date and Application- The amendments made by this section shall take effect on the date of enactment of this Act and shall apply to conduct on or after the date of enactment, except that--CommentsClose CommentsPermalink





(1) subparagraph (B) of section 3729(a)(1) of title 31, United States Code, as added by subsection (a)(1), shall take effect as if enacted on June 7, 2008, and apply to all claims under the False Claims Act (31 U.S.C. 3729 et seq.) that are pending on or after that date; andCommentsClose CommentsPermalink





(2) section 3731(b) of title 31, as amended by subsection (b); section 3733, of title 31, as amended by subsection (c); and section 3732 of title 31, as amended by subsection (e); shall apply to cases pending on the date of enactment.CommentsClose CommentsPermalink

Speaker of the House of Representatives.CommentsClose CommentsPermalink

Vice President of the United States andCommentsClose CommentsPermalink

President of the Senate.CommentsClose CommentsPermalink