Insurance Fraud Prevention Act of 1994

Summary: Insurance Fraud Prevention Act of 1994 - Amends the Federal criminal code to establish penalties to be imposed upon any person engaged in the business of insurance whose activities affect commerce and who: (1) knowingly, with intent to deceive, makes a materially false statement or report or willfully and materially overvalues land, property, or security in connection with reports or documents presented to an insurance regulatory official or agency, or to any agent or examiner (official) appointed to examine the affairs of such person for the purpose of influencing in any way the actions of such official; (2) willfully embezzles or misappropriates funds or property while acting as an officer, director, agent, or employee (officer) of such person; (3) knowingly makes a false entry of material fact in any book, report, or statement of such person with intent to deceive any person about the financial condition or solvency of such business; and (4) by threats or force, corruptly influences, obstructs, or endeavors corruptly to influence or obstruct the proper administration of the law under which a proceeding (involving the business of insurance whose activities affect interstate commerce) is pending before an insurance regulatory official appointed to examine the affairs of such person. 
Authorizes the Attorney General to seek civil penalties and injunctions for violations of this Act. 
Sets penalties for obstructing criminal investigations with respect to the prosecution of cases of insurance fraud.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Insurance Fraud Prevention Act of 
-1-9-9-3 1994''.

SEC. 2. CRIMES BY OR AFFECTING PERSONS ENGAGED IN THE BUSINESS OF 
              INSURANCE WHOSE ACTIVITIES AFFECT INTERSTATE COMMERCE.

    (a) In General.--Chapter 47 of title 18, United States Code, is 
amended by adding at the end thereof the following new sections:
``Sec. 1033. Crimes by or affecting persons engaged in the business of 
              insurance whose activities affect interstate commerce
    ``(a)(1) Whoever is engaged in the business of insurance whose 
activities affect interstate commerce and knowingly, with the intent to 
deceive, makes any false material statement or report or willfully and 
materially overvalues any land, property or security--
            ``(A) in connection with any financial reports or documents 
        presented to any insurance regulatory official or agency or an 
        agent or examiner appointed by such official or agency to 
        examine the affairs of such person, and
            ``(B) for the purpose of influencing the actions of such 
        official or agency or such an appointed agent or examiner,
shall be punished as provided in paragraph (2).
    ``(2) The punishment for an offense under paragraph (1) is a fine 
as established under this title or imprisonment for not more than 10 
years, or both, except that the term of imprisonment shall be not more 
than 15 years if the statement or report or overvaluing of land, 
property, or security jeopardized the safety and soundness of an 
insurer and was a significant cause of such insurer being placed in 
conservation, rehabilitation, or liquidation by an appropriate court.
    ``(b)(1) Whoever--
            ``(A) acting as, or being an officer, director, agent, or 
        employee of, any person engaged in the business of insurance 
        whose activities affect interstate commerce, or
            ``(B) is engaged in the business of insurance whose 
        activities affect interstate commerce or is involved (other 
        than as an insured or beneficiary under a policy of insurance) 
        in a transaction relating to the conduct of affairs of such a 
        business,
willfully embezzles, abstracts, purloins, or misappropriates any of the 
moneys, funds, premiums, credits, or other property of such person so 
engaged shall be punished as provided in paragraph (2).
    ``(2) The punishment for an offense under paragraph (1) is a fine 
as provided under this title or imprisonment for not more than 10 
years, or both, except that if such embezzlement, abstraction, 
purloining, or misappropriation described in paragraph (1) jeopardized 
the safety and soundness of an insurer and was a significant cause of 
such insurer being placed in conservation, rehabilitation, or 
liquidation by an appropriate court, such imprisonment shall be not 
more than 15 years. If the amount or value so embezzled, abstracted, 
purloined, or misappropriated does not exceed $5,000, whoever violates 
paragraph (1) shall be fined as provided in this title or imprisoned 
not more than one year, or both.
    ``(c)(1) Whoever is engaged in the business of insurance and whose 
activities affect interstate commerce or is involved (other than as an 
insured or beneficiary under a policy of insurance) in a transaction 
relating to the conduct of affairs of such a business, knowingly makes 
any false entry of material fact in any book, report, or statement of 
such person engaged in the business of insurance with intent to deceive 
any person, including any officer, employee, or agent of such person 
engaged in the business of insurance, any insurance regulatory official 
or agency, or any agent or examiner appointed by such official or 
agency to examine the affairs of such person, about the financial 
condition or solvency of such business shall be punished as provided in 
paragraph (2).
    ``(2) The punishment for an offense under paragraph (1) is a fine 
as provided under this title or imprisonment for not more than 10 
years, or both, except that if the false entry in any book, report, or 
statement of such person jeopardized the safety and soundness of an 
insurer and was a significant cause of such insurer being placed in 
conservation, rehabilitation, or liquidation by an appropriate court, 
such imprisonment shall be not more than 15 years.
    ``(d) Whoever, by threats or force or by any threatening letter or 
communication, corruptly influences, obstructs, or impedes or endeavors 
corruptly to influence, obstruct, or impede the due and proper 
administration of the law under which any proceeding involving the 
business of insurance whose activities affect interstate commerce is 
pending before any insurance regulatory official or agency or any agent 
or examiner appointed by such official or agency to examine the affairs 
of a person engaged in the business of insurance whose activities 
affect interstate commerce, shall be fined as provided in this title or 
imprisoned not more than 10 years, or both.
    ``(e)(1)(A) Any individual who has been convicted of any criminal 
felony involving dishonesty or a breach of trust, or who has been 
convicted of an offense under this section, and who willfully engages 
in the business of insurance whose activities affect interstate 
commerce or participates in such business, shall be fined as provided 
in this title or imprisoned not more than 5 years, or both.
    ``(B) Any individual who is engaged in the business of insurance 
whose activities affect interstate commerce and who willfully permits 
the participation described in subparagraph (A) shall be fined as 
provided in this title or imprisoned not more than 5 years, or both.
    ``(2) A person described in paragraph (1)(A) may engage in the 
business of insurance or participate in such business if such person 
has the written consent of any insurance regulatory official authorized 
to regulate the insurer, which consent specifically refers to this 
subsection.
    ``(f) As used in this section--
            ``(1) the term `business of insurance' means--
                    ``(A) the writing of insurance, or
                    ``(B) the reinsuring of risks,
        by an insurer, including all acts necessary or incidental to 
        such writing or reinsuring and the activities of persons who 
        act as, or are, officers, directors, agents, or employees of 
        insurers or who are other persons authorized to act on behalf 
        of such persons;
            ``(2) the term `insurer' means any entity the business 
        activity of which is the writing of insurance or the reinsuring 
        of risks, and includes any person who acts as, or is, an 
        officer, director, agent, or employee of that business;
            ``(3) the term `interstate commerce' means--
                    ``(A) commerce within the District of Columbia, or 
                any territory or possession of the United States;
                    ``(B) all commerce between any point in the State, 
                territory, possession, or the District of Columbia and 
                any point outside thereof;
                    ``(C) all commerce between points within the same 
                State through any place outside such State; or
                    ``(D) all other commerce over which the United 
                States has jurisdiction; and
            ``(4) the term `State' includes any State, the District of 
        Columbia, the Commonwealth of Puerto Rico, the Northern Mariana 
        Islands, the Virgin Islands, American Samoa, and the Trust 
        Territory of the Pacific Islands.
``Sec. 1034. Civil penalties and injunctions for violations of section 
              1033
    ``(a) The Attorney General may bring a civil action in the 
appropriate United States district court against any person who engages 
in conduct constituting an offense under section 1033 and, upon proof 
of such conduct by a preponderance of the evidence, such person shall 
be subject to a civil penalty of not more than $50,000 for each 
violation or the amount of compensation which the person received or 
offered for the prohibited conduct, whichever amount is greater. If the 
offense has contributed to the decision of a court of appropriate 
jurisdiction to issue an order directing the conservation, 
rehabilitation, or liquidation of an insurer, such penalty shall be 
remitted to the appropriate regulatory official for the benefit of the 
policyholders, claimants, and creditors of such insurer. The imposition 
of a civil penalty under this subsection does not preclude any other 
criminal or civil statutory, common law, or administrative remedy, 
which is available by law to the United States or any other person.
    ``(b) If the Attorney General has reason to believe that a person 
is engaged in conduct constituting an offense under section 1033, the 
Attorney General may petition an appropriate United States district 
court for an order prohibiting that person from engaging in such 
conduct. The court may issue an order prohibiting that person from 
engaging in such conduct if the court finds that the conduct 
constitutes such an offense. The filing of a petition under this 
section does not preclude any other remedy which is available by law to 
the United States or any other person.''.
    (b) Clerical Amendment.--The table of sections for chapter 47 of 
such title is amended by adding at the end the following new items:

``1033. Crimes by or affecting persons engaged in the business of 
                            insurance whose activities affect 
                            interstate commerce.
``1034. Civil penalties and injunctions for violations of section 
                            1033.''.

SEC. 3. MISCELLANEOUS AMENDMENTS TO TITLE 18, UNITED STATES CODE.

    (a) Tampering With Insurance Regulatory Proceedings.--Section 
1515(a)(1) of title 18, United States Code, is amended--
            (1) by striking ``or'' at the end of subparagraph (B);
            (2) by inserting ``or'' at the end of subparagraph (C); and
            (3) by adding at the end thereof the following new 
        subparagraph:
                    ``(D) a proceeding involving the business of 
                insurance whose activities affect interstate commerce 
                before any insurance regulatory official or agency or 
                any agent or examiner appointed by such official or 
                agency to examine the affairs of any person engaged in 
                the business of insurance whose activities affect 
                interstate commerce; or''.
    (b) Limitations.--Section 3293 of such title is amended by 
inserting ``1033,'' after ``1014,''.
    (c) Obstruction of Criminal Investigations.--Section 1510 of title 
18, United States Code, is amended by adding at the end the following 
new subsection:
    ``(d)(1) Whoever--
            ``(A) acting as, or being, an officer, director, agent or 
        employee of a person engaged in the business of insurance whose 
        activities affect interstate commerce, or
            ``(B) is engaged in the business of insurance whose 
        activities affect interstate commerce or is involved (other 
        than as an insured or beneficiary under a policy of insurance) 
        in a transaction relating to the conduct of affairs of such a 
        business,
with intent to obstruct a judicial proceeding, directly or indirectly 
notifies any other person about the existence or contents of a subpoena 
for records of that person engaged in such business or information that 
has been furnished to a Federal grand jury in response to that 
subpoena, shall be fined as provided by this title or imprisoned not 
more than 5 years, or both.
    ``(2) As used in paragraph (1), the term `subpoena for records' 
means a Federal grand jury subpoena for records that has been served 
relating to a violation of, or a conspiracy to violate, section 1033 of 
this title.''.