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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 2462 Introduced in Senate (IS)]

103d CONGRESS
  2d Session
                                S. 2462

To amend section 1956 of title 18, United States Code to include equity 
  skimming as a predicate offense, to amend section 1516 of title 18, 
United States Code to curtail delays in the performance of audits, and 
                          for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

           September 26 (legislative day, September 12), 1994

   Mr. Cohen introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL

 
To amend section 1956 of title 18, United States Code to include equity 
  skimming as a predicate offense, to amend section 1516 of title 18, 
United States Code to curtail delays in the performance of audits, and 
                          for other purposes.

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

SECTION 1. FINDINGS.

    The Congress finds that--
            (1) the Federal Government makes available mortgage 
        insurance and other assistance to encourage investors and 
        lending institutions to provide housing to low-income 
        individuals and families;
            (2) in general, this current system functions well;
            (3) some unscrupulous owners of federally assisted housing, 
        however, have diverted Federal housing subsidies and other 
        funds to personal and other improper uses, while failing to 
        make payments on their insured mortgages or maintain the 
        assisted housing;
            (4) this practice of diverting funds, known as equity 
        skimming, has cost the Nation's taxpayers an estimated 
        $6,000,000,000; and
            (5) current law is inadequate to deter or prevent the 
        practice of equity skimming.

SEC. 2. INCLUSION OF EQUITY SKIMMING AS A LAUNDERING OFFENSE.

    Section 1956(c)(7)(D) of title 18, United States Code, is amended 
by inserting ``section 254 of the National Housing Act (relating to 
equity skimming),'' before ``or any felony violation of the Foreign 
Corrupt Practices Act''.

SEC. 3. OBSTRUCTION OF FEDERAL AUDIT.

    Section 1516(a) of title 18, United States Code, is amended by 
inserting ``or relating to any property that is security for a mortgage 
note that is insured, guaranteed, acquired, or held by the Secretary of 
the Department of Housing and Urban Development pursuant to section 
203, 207, 213, 220, 221, 223, 231, 232, 236, 238, 241, 242, 244, 608, 
or 810 of the National Housing Act,'' after ``under a contract or 
subcontract,''.

SEC. 4. EFFECT OF EQUITY SKIMMING ON MORTGAGE INSURANCE.

    Section 254 of the National Housing Act (12 U.S.C. 1715z-19) is 
amended--
            (1) by inserting ``(a)'' before ``Whoever''; and
            (2) by adding at the end the following new subsection:
    ``(b) Effect of Violation.--Each contract for insurance under any 
provision of law listed in subsection (a) shall provide that if an 
owner, agent, manager, or other person who is otherwise in custody, 
control, or possession of any property described in subsection (a) is 
convicted of a violation of this subsection (a), the Secretary may 
recover from such owner, agent, manager, or other person an amount 
equal to the sum of--
            ``(1) any benefit of insurance conferred on the mortgagee 
        by the Secretary with respect to such property; and
            ``(2) any other losses incurred by the Secretary in 
        connection with such property;
to the extent that such benefit was conferred or loss was incurred as a 
result of the violation.''.
                                 <all>
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