I

103D CONGRESS

2D SESSION H. R. 4399

To combat telemarketing fraud.

IN THE HOUSE OF REPRESENTATIVES

MAY 12, 1994

Mr. CARR of Michigan introduced the following bill; which was referred to the

Committee on the Judiciary

A BILL

To combat telemarketing fraud.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Senior Citizens

5 Against Marketing Scams Act of 1994’’.

6 SEC. 2. ENHANCED PENALTIES FOR TELEMARKETING

7 FRAUD.

8 (a) OFFENSE.—Part I of title 18, United States

9 Code, is amended—

10 (1) by redesignating chapter 113A as chapter

11 113B; and
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1 (2) by inserting after chapter 113 the following

2 new chapter:

3 ‘‘CHAPTER 113A—TELEMARKETING FRAUD

‘‘Sec.

‘‘2325. Definition.

‘‘2326. Enhanced penalties.

‘‘2327. Restitution.

4 ‘‘§ 2325. Definition

5 ‘‘In this chapter, ‘telemarketing’—

6 ‘‘(1) means a plan, program, promotion, or

7 campaign that is conducted to induce—

8 ‘‘(A) purchases of goods or services; or

9 ‘‘(B) participation in a contest or sweep10 stakes,

11 by use of 1 or more interstate telephone calls initi12 ated either by a person who is conducting the plan,

13 program, promotion, or campaign or by a prospec14 tive purchaser or contest or sweepstakes participant;

15 but

16 ‘‘(2) does not include the solicitation of sales

17 through the mailing of a catalog that—

18 ‘‘(A) contains a written description or il19 lustration of the goods or services offered for

20 sale;

21 ‘‘(B) includes the business address of the

22 seller;
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1 ‘‘(C) includes multiple pages of written

2 material or illustration; and

3 ‘‘(D) has been issued not less frequently

4 than once a year,

5 if the person making the solicitation does not solicit

6 customers by telephone but only receives calls initi7 ated by customers in response to the catalog and

8 during those calls take orders without further solici9 tation.

10 ‘‘§ 2326. Enhanced penalties

11 ‘‘An offender that is convicted of an offense under

12 1028, 1029, 1341, 1342, 1343, or 1344 in connection with

13 the conduct of telemarketing—

14 ‘‘(1) may be imprisoned for a term of 5 years

15 in addition to any term of imprisonment imposed

16 under any of those sections, respectively; and

17 ‘‘(2) in the case of an offense under any of

18 those sections that—

19 ‘‘(A) victimized a significant number of

20 persons over the age of 55; or

21 ‘‘(B) targeted persons over the age of 55,

22 may be imprisoned for a term of 10 years in addi23 tion to any term of imprisonment imposed under any

24 of those sections, respectively.
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1 ‘‘§ 2327. Restitution

2 ‘‘In sentencing an offender under section 2326, the

3 court shall order the offender to pay restitution to any

4 victims and may order the offender to pay restitution to

5 others who sustained losses as a result of the offender’s

6 fraudulent activity.’’.

7 (b) CLERICAL AMENDMENTS.—The table of chapters

8 at the beginning of part I of title 18, United States Code,

9 is amended by striking the item relating to chapter 113A

10 and inserting the following:

‘‘113A. Telemarketing fraud .................................................................... 2325

‘‘113B. Terrorism ..................................................................................... 2331’’.

11 SEC. 3. FORFEITURE OF FRAUD PROCEEDS.

12 Section 982(a) of title 18, United States Code, is

13 amended by adding at the end the following new para14 graph:

15 ‘‘(6) The Court, in sentencing an offender

16 under section 2326, shall order that the offender

17 forfeit to the United States any real or personal

18 property constituting or derived from proceeds that

19 the offender obtained directly or indirectly as a

20 result of the offense.’’.

21 SEC. 4. INCREASED PENALTIES FOR FRAUD AGAINST

22 OLDER VICTIMS.

23 (a) REVIEW.—The United States Sentencing Com24 mission shall review and, if necessary, amend the sentenc-
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1 ing guidelines to ensure that victim related adjustments

2 for fraud offenses against older victims over the age of

3 55 are adequate.

4 (b) REPORT.—Not later than 180 days after the date

5 of enactment of this Act, the Sentencing Commission shall

6 report to Congress the result of its review under sub7 section (a).

8 SEC. 5. REWARDS FOR INFORMATION LEADING TO PROS9 ECUTION AND CONVICTION.

10 Section 3059 of title 18, United States Code, is

11 amended by adding at the end the following new sub12 section:

13 ‘‘(c)(1) In special circumstances and in the Attorney

14 General’s sole discretion, the Attorney General may make

15 a payment of up to $10,000 to a person who furnishes

16 information unknown to the Government relating to a pos17 sible prosecution under section 2325 which results in a

18 conviction.

19 ‘‘(2) A person is not eligible for a payment under

20 paragraph (1) if—

21 ‘‘(A) the person is a current or former officer

22 or employee of a Federal, State, or local government

23 agency or instrumentality who furnishes information

24 discovered or gathered in the course of government

25 employment;
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1 ‘‘(B) the person knowingly participated in the

2 offense;

3 ‘‘(C) the information furnished by the person

4 consists of an allegation or transaction that has been

5 disclosed to the public—

6 ‘‘(i) in a criminal, civil, or administrative

7 proceeding;

8 ‘‘(ii) in a congressional, administrative, or

9 General Accounting Office report, hearing,

10 audit, or investigation; or

11 ‘‘(iii) by the news media, unless the person

12 is the original source of the information; or

13 ‘‘(D) when, in the judgment of the Attorney

14 General, it appears that a person whose illegal ac15 tivities are being prosecuted or investigated could

16 benefit from the award.

17 ‘‘(3) For the purposes of paragraph (2)(C)(iii), the

18 term ‘original source’ means a person who has direct and

19 independent knowledge of the information that is fur20 nished and has voluntarily provided the information to the

21 Government prior to disclosure by the news media.

22 ‘‘(4) Neither the failure of the Attorney General to

23 authorize a payment under paragraph (1) nor the amount

24 authorized shall be subject to judicial review.’’.
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1 SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

2 There are authorized to be appropriated for fiscal

3 year 1995 for the purposes of carrying out this Act and

4 the amendments made by this Act—

5 (1) $10,000,000 for the Federal Bureau of In6 vestigation to hire, equip, and train no fewer than

7 100 special agents and support staff to investigate

8 telemarketing fraud cases;

9 (2) $3,500,000 to hire, equip, and train no

10 fewer than 30 Department of Justice attorneys, as11 sistant United States Attorneys, and support staff to

12 prosecute telemarketing fraud cases; and

13 (3) $10,000,000 for the Department of Justice

14 to conduct, in cooperation with State and local law

15 enforcement agencies and senior citizen advocacy or16 ganizations, public awareness and prevention initia17 tives for senior citizens, such as seminars and

18 training.

19 SEC. 7. BROADENING APPLICATION OF MAIL FRAUD STAT20 UTE.

21 Section 1341 of title 18, United States Code, is

22 amended—

23 (1) by inserting ‘‘or deposits or causes to be de24 posited any matter or thing whatever to be sent or

25 delivered by any private or commercial interstate

26 carrier,’’ after ‘‘Postal Service,’’; and
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1 (2) by inserting ‘‘or such carrier’’ after ‘‘causes

2 to be delivered by mail’’.

3 SEC. 8. FRAUD AND RELATED ACTIVITY IN CONNECTION

4 WITH ACCESS DEVICES.

5 Section 1029 of title 18, United States Code, is

6 amended—

7 (1) in subsection (a)—

8 (A) by striking ‘‘or’’ at the end of para9 graph (3); and

10 (B) by inserting after paragraph (4) the

11 following new paragraphs:

12 ‘‘(5) knowingly and with intent to defraud ef13 fects transactions, with 1 or more access devices is14 sued to another person or persons, to receive pay15 ment or any other thing of value during any 1-year

16 period the aggregate value of which is equal to or

17 greater than $1,000;

18 ‘‘(6) without the authorization of the issuer of

19 the access device, knowingly and with intent to de20 fraud solicits a person for the purpose of—

21 ‘‘(A) offering an access device; or

22 ‘‘(B) selling information regarding or an

23 application to obtain an access device; or

24 ‘‘(7) without the authorization of the credit

25 card system member or its agent, knowingly and
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1 with intent to defraud causes or arranges for an2 other person to present to the member or its agent,

3 for payment, 1 or more evidences or records of

4 transactions made by an access device;’’;

5 (2) in subsection (c)(1) by striking ‘‘(a)(2) or

6 (a)(3)’’ and inserting ‘‘(a) (2), (3), (5), (6), or (7)’’;

7 and

8 (3) in subsection (e)—

9 (A) by striking ‘‘and’’ at the end of para10 graph (5);

11 (B) by striking the period at the end of

12 paragraph (6) and inserting ‘‘; and’’; and

13 (C) by adding at the end the following new

14 paragraph:

15 ‘‘(7) the term ‘credit card system member’

16 means a financial institution or other entity that is

17 a member of a credit card system, including an en18 tity, whether affiliated with or identical to the credit

19 card issuer, that is the sole member of a credit card

20 system.’’.

21 SEC. 9. INFORMATION NETWORK.

22 (a) HOTLINE.—The Attorney General shall establish

23 a national toll-free hotline for the purpose of—

24 (1) providing general information on

25 telemarketing fraud to interested persons; and
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1 (2) gathering information related to possible

2 violations of this Act.

3 (b) ACTION ON INFORMATION GATHERED.—The At4 torney General shall work in cooperation with the Federal

5 Trade Commission to ensure that information gathered

6 through the hotline shall be acted on in an appropriate

7 manner.

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