On Tuesday, the Senate passed S.386, “The Fraud Enforcement and Recovery Act of 2009.” This bi-partisan legislation, backed by the Obama Administration, overwhelmingly passed in a 92-4 vote. Originally introduced in February by Senators Patrick Leahy (D-VT), Chuck Grassley (R-IA), and Ted Kaufman (D-DE), this legislation would strengthen certain tools available to law enforcement to combat financial and mortgage fraud, and help prevent future frauds that exploit TARP and other federal programs aimed at restoring the economy.
In pertinent part, the legislation would do the following:
- Authorize $265 million over the next two years to the Department of Justice, the FBI, the U.S. Postal Inspection Services, the U.S. Secret Service and the Inspector General for the Department of Housing and Urban Development to hire additional fraud agents, analysts, investigators, prosecutors, and support staff to combat fraud.
- Make significant improvements to fraud and money laundering statutes to strengthen prosecutors’ ability to combat fraud, by among other things, amending the criminal money laundering statute to make clear that the proceeds of certain illegal activities include the gross receipts of the illegal activity, and not just the profits of the activity.
- Amend the False Claims Act to ensure that the government can recover taxpayer dollars that are lost as a result of fraud and abuse and expand liability for those that make false or fraudulent claims to the federal government.
- Amend the federal securities statute to cover fraud schemes involving commodities futures and options.
The legislation will now go to the House, where similar legislation, H.R. 1748, “The Fight Fraud Act” was approved by the Judiciary Committee by a voice vote.