I

103D CONGRESS

2D SESSION H. R. 4070

To amend title 18, United States Code, to provide for criminal and civil

penalties for mail and wire fraud, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 17, 1994

Miss COLLINS of Michigan (by request) introduced the following bill; which

was referred jointly to the Committees on the Judiciary and Post Office

and Civil Service

A BILL

To amend title 18, United States Code, to provide for criminal and civil penalties for mail and wire fraud, and

for other purposes.

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

3 SECTION 1. CRIMINAL AND CIVIL FORFEITURE FOR MAIL

4 AND WIRE FRAUD.

5 (a) IN GENERAL.—Chapter 63 of title 18, United

6 States Code, is amended by adding at the end the follow7 ing new sections:
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1 ‘‘§ 1347. Criminal forfeiture for violation of section

2 1341 or 1343

3 ‘‘(a) IN GENERAL.—A person convicted of a violation

4 of sections 1341 or 1343 of this title shall, notwithstand5 ing any provision of State law, forfeit to the United States

6 any property constituting or derived from any proceeds

7 which the person obtained directly or indirectly from a

8 scheme in violation of either section.

9 ‘‘(b) PROCEDURES OF CONTROLLED SUBSTANCES

10 ACT APPLICABLE.—With respect to a forfeiture under

11 this section for a violation of this chapter, the provisions

12 of subsections (b), (c), (e), (f), (g), (i), (k), (l), (m), (n),

13 and (o) of section 413 of the Controlled Substances Act

14 apply as they would to a forfeiture under that section for

15 a violation of the Controlled Substances Act.

16 ‘‘(c) DISPOSITION OF PROPERTY.—After a seizure of

17 property ordered forfeited under this section, the Attorney

18 General shall dispose of the property under section 1349

19 of this title. The Postal Service shall turn any such seized

20 property over to the Attorney General for disposal under

21 such section.

22 ‘‘(d) SUBSTITUTE ASSETS.—If any of the property

23 subject to forfeiture under this section, as a result of con24 duct of the defendant—

25 ‘‘(1) cannot be located upon the exercise of due

26 diligence;
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1 ‘‘(2) has been transferred or sold to, or depos2 ited with, a third party;

3 ‘‘(3) has been placed beyond the jurisdiction of

4 the court;

5 ‘‘(4) has been substantially diminished in value;

6 or

7 ‘‘(5) has been commingled with other property

8 which cannot be divided without difficulty;

9 the court shall order the forfeiture of any other property

10 of the defendant up to the value of any property described

11 in paragraphs (1) through (5) of this subsection.

12 ‘‘§ 1348. Civil forfeiture for violation of section 1341

13 or 1343

14 ‘‘(a) PROPERTY SUBJECT TO CIVIL FORFEITURE.—

15 Any property, as defined by subsection (b) of section 413

16 of the Controlled Substances Act, constituting or derived

17 from any proceeds of a scheme in violation of sections

18 1341 or 1343 of this title shall be subject to forfeiture

19 to the United States.

20 ‘‘(b) SEIZURE.—(1) Except as provided in paragraph

21 (4), any property subject to forfeiture to the United States

22 under this section may be seized by the Attorney General

23 or the Postal Service upon process issued pursuant to the

24 Supplemental Rules for Certain Admiralty and Maritime
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1 Claims by a district court of the United States having ju2 risdiction over the property.

3 ‘‘(2) The Attorney General or the Postal Service may

4 seize such property without such process when—

5 ‘‘(A) the seizure is incident to a lawful arrest

6 or search; or

7 ‘‘(B) such property has been the subject of a

8 prior judgment in favor of the United States in a

9 criminal injunction or forfeiture proceeding under

10 section 1347 of this title.

11 ‘‘(3) The Government may seek the issuance of a

12 warrant authorizing the seizure of property subject to for13 feiture under this section in the same manner as provided

14 for a search warrant under the Federal Rules of Criminal

15 Procedure.

16 ‘‘(4) No property shall be forfeited under this section

17 to the extent of the interest of an owner or lienholder by

18 reason of any act or omission established by that owner

19 or lienholder to have been committed without the knowl20 edge of that owner or lienholder.

21 ‘‘(c) PROCEDURAL MATTERS.—(1) With respect to a

22 forfeiture of property under this section, the provisions of

23 subsections (c), (d), (h), and (j) of section 511 of the Con24 trolled Substances Act apply as they would to a forfeiture

25 of property under that section, and the Postal Service may
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1 also perform any of the functions the Attorney General

2 may perform under such subsections.

3 ‘‘(2) The filing of an indictment or information alleg4 ing a violation of section 1341 or 1343 of this title which

5 is also related to a civil forfeiture proceeding under either

6 section shall, upon motion of the United States and for

7 good cause shown, stay the civil forfeiture proceeding.

8 ‘‘(d) DISPOSITION OF PROPERTY.—After a seizure of

9 property ordered forfeited under this section, the Attorney

10 General or the Postal Service shall dispose of the property

11 under section 1349 of this title.

12 ‘‘§ 1349. Disposition of forfeited property

13 ‘‘(a) IN GENERAL.—After making due provision for

14 the rights of any innocent persons, the Attorney General,

15 after deducting the costs incurred by the United States

16 in conducting the seizure, forfeiture, and identification of

17 victims, shall deposit the property forfeited or the proceeds

18 from the sale of property forfeited under sections 1347

19 or 1348 of this title in the Department of Justice Assets

20 Forfeiture Fund established by section 524(c) of title 28.

21 The Postal Service may exercise the authority of the At22 torney General in conducting administrative forfeitures

23 and shall deposit the property forfeited or the proceeds

24 of the property forfeited in the Postal Service Fund under

25 section 2003(b)(7) of title 39. Any property right or inter-
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1 est not exercisable by, or transferable for value to, the

2 United States shall expire and shall not revert to the de3 fendant. Neither the defendant nor any person acting in

4 concert with the defendant or on the defendant’s behalf

5 is eligible to purchase forfeited property sold by the United

6 States.

7 ‘‘(b) RESTRAINT PENDING APPEAL.—Upon applica8 tion of a person other than the defendant or a person act9 ing in concert with the defendant or on the defendant’s

10 behalf, the court may restrain or stay the sale or disposi11 tion of the property pending the conclusion of any appeal

12 in the case giving rise to the forfeiture, if the applicant

13 demonstrates that proceeding with the sale or disposition

14 will result in irreparable harm to the applicant.

15 ‘‘(c) RULES FOR DISPOSITION.—The Attorney Gen16 eral and the Postal Service shall make rules providing for

17 the disposition of such property and proceeds. The rules

18 shall provide that the Attorney General or the Postal

19 Service may—

20 ‘‘(1) retain the property for official use;

21 ‘‘(2) transfer the property to Federal, State, or

22 local law enforcement agencies so as to reflect gen23 erally the contribution of such agencies to the sei24 zure or forfeiture of such property;
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1 ‘‘(3) sell any forfeited property which is not re2 quired to be destroyed by law and which is not

3 harmful to the public;

4 ‘‘(4) require that the General Services Adminis5 tration take custody of the property and dispose of

6 it in accordance with law;

7 ‘‘(5) restore forfeited property to victims of an

8 offense described in subsection (a);

9 ‘‘(6) destroy the property if it is harmful to the

10 public or the expense of sale would exceed the

11 amount realized from the sale; or

12 ‘‘(7) dispose of such funds or property as other13 wise provided by law.’’.

14 (b) CLERICAL AMENDMENT.—The table of sections

15 for chapter 63 of title 18, United States Code, is amended

16 by adding at the end the following new items:

‘‘1347. Criminal forfeiture for violation of section 1341 or 1343.

‘‘1348. Civil forfeiture for violation of section 1341 or 1343.

‘‘1349. Disposition of forfeited property.’’.

17 SEC. 2. POSTAL SERVICE FUND AMENDMENT.

18 Section 2003(b)(7) of title 39, United States Code,

19 is amended to read as follows:

20 ‘‘(7) amounts (including proceeds from the sale

21 of forfeited items) from any forfeiture conducted by

22 the Postal Service and from any forfeiture resulting

23 from an investigation conducted by the Postal Serv24 ice, except that nothing in this paragraph shall pre-
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1 clude the Postal Service from sharing such amounts

2 with any Federal or State agency whose efforts in

3 investigating or litigating the forfeiture contributed

4 to the receipt of such funds.’’.

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