U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

1 

49–010 

" ! SENATE 

114TH CONGRESS

1st Session 

REPORT

2015

114–95 

Calendar No. 167 

REPRESENTATIVE PAYEE FRAUD 

PREVENTION ACT OF 2015 

R E P O R T 

OF THE

COMMITTEE ON HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

TO ACCOMPANY

S. 1576 

TO AMEND TITLE 5, UNITED STATES CODE, TO PREVENT FRAUD 

BY REPRESENTATIVE PAYEES. 

JULY 27, 2015.—Ordered to be printed 


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(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

RON JOHNSON, Wisconsin Chairman 

JOHN MCCAIN, Arizona 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

JAMES LANKFORD, Oklahoma 

MICHAEL B. ENZI, Wyoming 

KELLY AYOTTE, New Hampshire 

JONI ERNST, Iowa 

BEN SASSE, Nebraska 

THOMAS R. CARPER, Delaware 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

TAMMY BALDWIN, Wisconsin 

HEIDI HEITKAMP, North Dakota 

CORY A. BOOKER, New Jersey 

GARY C. PETERS, Michigan 

KEITH B. ASHDOWN, Staff Director 

CHRISTOPHER R. HIXON, Chief Counsel 

PATRICK J. BAILEY, Chief Counsel for Governmental Affairs 

GABRIELLE D’ADAMO SINGER, Deputy Chief Counsel for Governmental Affairs 

GABRIELLE A. BATKIN, Minority Staff Director 

JOHN P. KILVINGTON, Minority Deputy Staff Director 

MARY BETH SCHULTZ, Minority Chief Counsel 

PETER P. TYLER, Minority Senior Professional Staff Member 

LAURA W. KILBRIDE, Chief Clerk 


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Calendar No. 167 

114TH CONGRESS REPORT " ! SENATE 1st Session 114–95 

REPRESENTATIVE PAYEE FRAUD PREVENTION ACT OF 

2015 

JULY 27, 2015.—Ordered to be printed 

Mr. JOHNSON, from the Committee on Homeland Security and 

Governmental Affairs, submitted the following 

R E P O R T 

[To accompany S. 1576] 

The Committee on Homeland Security and Governmental Affairs, 

to which was referred the bill (S. 1576) to amend title 5, United 

States Code, to prevent fraud by representative payees having considered the same, reports favorably thereon with amendments and 

recommends that the bill as amended do pass. 

CONTENTS 

Page 

I. Purpose and Summary .................................................................................. 1 

II. Background and Need for the Legislation ................................................... 2 

III. Legislative History ......................................................................................... 3 

IV. Section-by-Section Analysis .......................................................................... 3 

V. Evaluation of Regulatory Impact .................................................................. 4 

VI. Congressional Budget Office Cost Estimate ................................................ 5 

VII. Changes in Existing Law Made by the Bill, as Reported ........................... 5 

I. PURPOSE AND SUMMARY

The purpose of S. 1576, the Representative Payee Fraud Prevention Act of 2015, is to protect recipients of government federal retiree benefits from unscrupulous caretakers who take the retiree’s 

payments and use them not for the retiree’s benefit, but for their 

own. S. 1576 closes a loophole that currently exists in statute 

whereby the embezzlement or conversion of federal Social Security 

and Veterans’ benefits by representative payees is a federal felony, 

but the same embezzlement or conversion of benefits provided to 

federal retirees through the federal retirement system is not. 


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1 5 U.S.C. § 8401, et seq. 2 5 U.S.C. § 8331, et seq. 3 5 U.S.C. § 8466(c); 5 U.S.C. § 8345(e). 

4Meetings and written communication between OPM IG staff and Committee staff in May, 

June, and July, 2015. 5Meetings between OPM IG staff and Committee staff in May, June, and July, 2015. 

6 42 U.S.C. § 408 (characterizing the conversion of another’s Social Security benefit payments 

as a felony, punishable by fine pursuant to title 18 and/or up to five years in prison). 7 42 U.S.C. § 1383a. 

8 38 U.S.C. § 6101 (criminalizing fiduciary misuse of money or property intended for the veteran’s use). 9 18 U.S.C. § 3571(b)(3). 

10Meetings between OPM IG staff and Committee staff in May, June, and July, 2015. 11 Information provided to Committee staff by the OPM IG; see also Court shuts down West 

Philly mental health facility, Philly.com (Jan. 18, 2008). 12See Court shuts down West Philly mental health facility, Philly.com (Jan. 18, 2008). 13 Information provided to Committee staff by the OPM IG; see also Court shuts down West 

Philly mental health facility, Philly.com (Jan. 18, 2008). 

II. BACKGROUND AND THE NEED FOR LEGISLATION

In addition to other federal benefits, federal employees may be 

eligible for federal retiree benefits processed through the Office of 

Personnel and Management (OPM): Federal Employees Retirement 

System (FERS) benefits,1 and Civil Service Retirement System 

(CSRS) benefits.2 Under federal statute, individuals who are minors, mentally incompetent, or under some other qualifying legal 

disability can have their benefits paid on their behalf through a 

court-appointed or agency-approved representative.3 Such individuals authorized to receive the payments under these circumstances 

are frequently referred to as ‘‘representative payees.’’ 

The OPM Office of Inspector General (OIG) has reported to Congress an increase during recent years in the number of representative payees who take advantage of their position and use the 

money they receive for purposes other than to benefit the federal 

retiree.4 The OPM OIG has further reported that OPM has an extremely antequated paper system for tracking representative payees, and does very little, if any, oversight work to ensure representative payees are using federal monies for the benefit of the retiree.5

From 2004 to 2005, Congress created penalties for anyone who 

takes the funds from Social Security Disability Insurance Benefits,6

Social Security Supplemental Income,7 or Veterans’ Benefits 8 and 

fraudulently uses them for their own purposes, rather than on behalf of the intended recipient. These statutes criminalize such misuse of government benefits as a felony, punishable by a fine of up 

to $250,000,9 up to five years in prison, or both. 

No similar penalty was created for those representatives who 

misuse or embezzle CSRS or FERS benefits distributed by OPM. 

The absence of federal statutory authority often dissuades U.S. Attorneys from bringing to justice those appointed to take care of government retirees’ benefits when they use these funds for any purpose other than for the benefit of the retiree that they represent.10

In one example provided by the OPM OIG, Sakina Park represented that she was running a personal care facility out of her 

home in Philadelphia, housing at least seven people with mentalhealth problems.11 However, Ms. Park did not have a license to do 

so.12 At least one of the individuals alleged to be under her care 

was a federal annuitant entitled to OPM benefits, but mentally incompetent and unable to accept federal payments for herself.13 Ms. 

Park was listed as that individual’s representative payee, authorVerDate Sep 11 2014 05:31 Jul 31, 2015 Jkt 049010 PO 00000 Frm 00004 Fmt 6659 Sfmt 6602 E:\HR\OC\SR095.XXX SR095

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14 Information provided to Committee staff by the OPM IG. 15 Information provided to Committee staff by the OPM IG; see also Court shuts down West 

Philly mental health facility, Philly.com (Jan. 18, 2008). 16 Information provided to Committee staff by the OPM IG. 17 Id. 18Meetings between OPM IG staff and Committee staff in May, June, and July, 2015. 

ized to collect OPM benefits on the annuitant’s behalf.14 In 2009, 

investigators arrived with police at the home and removed the occupants of the home.15 At that time, it was discovered that the annuitant was not present—Ms. Park stated that the retiree was ‘‘always running away’’ and investigators found she had been admitted to another facility after being found on a street unconscious.16

The OPM OIG determined that Ms. Park had received just under 

$8,000 from OPM on the annuitant’s behalf and did not use any 

of those funds to care for the annuitant.17

The local district attorney prosecuted Ms. Park in 2013 because 

she also embezzled Social Security benefits from other individuals 

that were supposed to be in her care. Federal prosecutors may be 

reluctant to prosecute the misuse of OPM benefit payments alone 

because while such conduct may violate state embezzlement or conversion laws, it is not a specific federal crime.18

The Committee believes this lack of federal penalty leaves some 

of its most vulnerable civil servants, including those who may be 

mentally incompetent, with less legal recourse when they are taken 

advantage of and their retirement funds are misused. This legislation criminalizes the misuse of CSRS and FERS funds in the same 

manner as already exists for Social Security and Veterans’ benefits. 

In addition to prosecuting those who abscond with benefits intended for government retirees, S. 1576 prevents those who have 

committed this crime before (whether for CSRS, FERS, Social Security, or Veterans’ benefits) from future services as a representative 

payee. 

III. LEGISLATIVE HISTORY

Senators James Lankford and Heidi Heitkamp introduced S. 

1576 on June 15, 2015. The bill was referred to the Committee on 

Homeland Security and Governmental Affairs. Senator Ron Johnson joined as a cosponsor on June 24, 2015. 

The Committee considered S. 1576 at a business meeting on 

June 24, 2015. The Committee ordered the bill reported favorably 

by voice vote. Senators present for the vote on the bill were Senators Johnson, McCain, Lankford, Ayotte, Ernst, Sasse, Carper, 

Tester, Baldwin, and Heitkamp. 

IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED

Section 1. Short title 

This section provides the bill’s short title, the ‘‘Representative 

Payee Fraud Prevention Act of 2015.’’ 

Section 2. Representative payee fraud 

Paragraphs (a)(1) and (a)(2) of this section amend Title 5, chapter 83, subchapter III of the United States Code to add a new section 8345a following section 8345, and Title 5, chapter 84, subVerDate Sep 11 2014 05:31 Jul 31, 2015 Jkt 049010 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\SR095.XXX SR095

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chapter VI of the United States Code to add a new section 8466a 

following section 8466, respectively. 

New section 8345a makes it unlawful for any person authorized 

by the Office of Personnel Management to receive CSRS payments 

on behalf of a minor or other qualifying individual (a representative payee) to embezzle or in any manner convert any portion of the 

amount received from such payments to a use other than for the 

use and benefit of such individual. Such conduct is punishable by 

a fine under title 18 of the United States Code or imprisonment for 

not more than 5 years, or both. A representative payee’s willful neglect or refusal to make and file proper accountings concerning use 

of the received payments as required by law shall be considered 

prima facie evidence of embezzlement or conversion of such 

amounts. 

New section 8466a makes it unlawful for any person authorized 

by the Office of Personnel Management to receive FERS payments 

on behalf of a minor or other qualifying individual (a representative payee) to embezzle or in any manner convert any portion of the 

amount received from such payments to a use other than for the 

use and benefit of such individual. Such conduct is punishable by 

a fine under title 18 of the United States Code or imprisonment for 

not more than 5 years, or both. A representative payee’s willful neglect or refusal to make and file proper accountings concerning use 

of the received payments as required by law shall be considered 

prima facie evidence of embezzlement or conversion of such 

amounts. 

Paragraph (a)(3) makes technical and conforming amendments to 

the table of sections of chapters 83 and 84 of Title 5, United States 

Code, to reflect the new sections added in paragraphs (1) and (2). 

Paragraph (b) prohibits an individual from being appointed as a 

representative payee to receive CSRS or FERS payments on behalf 

of a minor or individual with a legal disability if he or she has been 

convicted of violating the new sections 8345a or 8466a created by 

this bill), 42 U.S.C. 408 or 1383a (similar prohibitions on embezzlement of Social Security benefits), or 38 U.S.C. 6101 (similar prohibitions on embezzlement of Veterans’ benefits). 

V. EVALUATION OF REGULATORY IMPACT

Pursuant to the requirements of paragraph 11(b) of rule XXVI of 

the Standing Rules of the Senate, the Committee has considered 

the regulatory impact of this bill and determined that the bill will 

have no regulatory impact within the meaning of the rules. The 

Committee agrees with the Congressional Budget Office’s statement that the bill contains no intergovernmental or private-sector 

mandates as defined in the Unfunded Mandates Reform Act 

(UMRA) and would impose no costs on state, local, or tribal governments. 


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VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

JULY 10, 2015. 

Hon. RON JOHNSON, Chairman, 

Committee on Homeland Security and Governmental Affairs, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 1576, the Representative 

Payee Fraud Prevention Act of 2015. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Matthew Pickford. 

Sincerely, 

KEITH HALL. 

Enclosure. 

S. 1576—Representative Payee Fraud Prevention Act of 2015 

CBO estimates that implementing S. 1576 would have no significant cost to the federal government. Enacting the bill could affect 

direct spending and revenues; therefore, pay-as-you-go procedures 

apply. However, CBO estimates that any effects on direct spending 

or revenues would be insignificant. 

S. 1576 would establish new federal crimes relating to federal retiree representatives who misuse funds from the Federal Employees Retirement System and the Civil Service Retirement System. 

A federal retiree representative is a person or an organization that 

manages federal retirement benefits for recipients who are unable 

to do so themselves under the Representative Payee Program. As 

a result of enacting S. 1576, the government would be able to pursue cases that it otherwise would not be able to prosecute. CBO expects that S. 1576 would apply to a relatively small number of offenders, however, so any increase in costs for law enforcement, 

court proceedings, or prison operations would not be significant. 

Any such costs would be subject to the availability of appropriated 

funds. 

Because those prosecuted and convicted under S. 1576 could be 

subject to civil and criminal fines, the federal government might 

collect additional fines if the legislation is enacted. Civil fines are 

recorded in the budget as revenues and deposited into the general 

fund of the Treasury. Criminal fines are recorded as revenues, deposited in the Crime Victims Fund, and are available to spend 

without future appropriation action. CBO expects that any net effects associated with collecting and spending such penalties would 

not be significant in any year because of the relatively small number of cases likely to be affected. 

S. 1576 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

not affect the budgets of state, local, or tribal governments. 

The CBO staff contact for this estimate is Matthew Pickford. The 

estimate was approved by H. Samuel Papenfuss, Deputy Assistant 

Director for Budget Analysis. 

VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with paragraph 12 of rule XXVI of the Standing 

Rules of the Senate, changes in existing law made by S. 1576 as 


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reported are shown as follows (existing law proposed to be omitted 

is enclosed in brackets, new matter is printed in italic, and existing 

law in which no change is proposed is shown in roman): 

TITLE 5 

* * * * * * * 

PART III—EMPLOYEES 

* * * * * * * 

SUBPART G—INSURANCE AND ANNUITIES 

* * * * * * * 

CHAPTER 83—RETIREMENT 

* * * * * * * 

SUBCHAPTER III—CIVIL SERVICE RETIREMENT 

* * * * * * * 

SEC. 8345. PAYMENTS OF BENEFITS; COMMENCEMENT, TERMINATION, 

AND WAIVER OF ANNUITY. 

(a) * * * 

* * * * * * * 

(f) The Office may not authorize a person to receive payments on 

behalf of a minor or individual of legal disability under subsection 

(e) if that person has been convicted of a violation of— 

(1) section 8345a or 8466a; 

(2) section 208 or 1632 of the Social Security Act (42 U.S.C. 

408 and 1383a); or 

(3) section 6101 of title 38, United States Code. 

* * * * * * * 

SEC. 8345a. EMBEZZLEMENT OR CONVERSION OF PAYMENTS. 

(a) IN GENERAL.—It shall be unlawful for any person that is authorized by the Office under section 8345(e) to receive payments on 

behalf of a minor or an individual mentally incompetent or under 

other legal disability to embezzle or in any manner convert all or 

any part of the amounts received from such payments to a use other 

than for the use and benefit of such minor or individual. 

(b) PENALTY.—Any person who violates subsection (a) shall be 

fined under title 18, imprisoned for not more than 5 years, or both. 

(c) PRIMA FACIE EVIDENCE.—Any willful neglect or refusal to 

make and file proper accountings or reports concerning the amounts 

received from payments authorized under section 8345(e) as required by law shall be taken to be sufficient evidence prima facie 

of the embezzlement or conversion of such amounts. 

* * * * * * * 


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TITLE 5 

* * * * * * * 

PART III—EMPLOYEES 

* * * * * * * 

SUBPART G—INSURANCE AND ANNUITIES 

* * * * * * * 

CHAPTER 84—FEDERAL EMPLOYEES’ RETIREMENT 

SYSTEM 

* * * * * * * 

SUBCHAPTER VI—GENERAL AND ADMINISTRATIVE 

PROVISIONS 

* * * * * * * 

SEC. 8466. APPLICATION FOR BENEFITS. 

(a) * * * 

* * * * * * * 

(d) The Office may not authorize a person to receive payments on 

behalf of a minor or individual of legal disability under subsection 

(c) if that person has been convicted of a violation of— 

(1) section 8345a or 8466a; 

(2) section 208 or 1632 of the Social Security Act (42 U.S.C. 

408 and 1383a); or 

(3) section 6101 of title 38, United States Code. 

SEC. 8466a. EMBEZZLEMENT OR CONVERSION OF PAYMENTS. 

(a) IN GENERAL.—It shall be unlawful for any person that is authorized by the Office under section 8466(c) to receive payments on 

behalf of a minor or an individual mentally incompetent or under 

other legal disability to embezzle or in any manner convert all or 

any part of the amounts received from such payments to a use other 

than for the use and benefit of such minor or individual. 

(b) PENALTY.—Any person who violates subsection (a) shall be 

fined under title 18, imprisoned for not more than 5 years, or both. 

(c) PRIMA FACIE EVIDENCE.—Any willful neglect or refusal to 

make and file proper accountings or reports concerning the amounts 

received from payments authorized under section 8466(c) as required by law shall be taken to be sufficient evidence prima facie 

of the embezzlement or conversion of such amounts. 

* * * * * * * 

Æ 


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