Federal Register / Vol. 74, No. 106 / Thursday, June 4, 2009 / Rules and Regulations 26793 

[Reserved for Product Description] 

International Restricted Delivery 

[Reserved for Product Description] 

Address List Services 

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Caller Service 

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Change-of-Address Credit Card 

Authentication 

[Reserved for Product Description] 

Confirm 

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International Reply Coupon Service 

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International Business Reply Mail Service 

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Money Orders 

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Post Office Box Service 

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Negotiated Service Agreements 

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HSBC North America Holdings Inc. 

Negotiated Service Agreement 

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Bookspan Negotiated Service Agreement 

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Bank of America Corporation Negotiated 

Service Agreement 

The Bradford Group Negotiated Service 

Agreement 

Part B—Competitive Products 

Competitive Product List 

Express Mail 

Express Mail 

Outbound International Expedited Services 

Inbound International Expedited Services 

Inbound International Expedited Services 1 

(CP2008–7) 

Inbound International Expedited Services 2 

(MC2009–10 and CP2009–12) 

Priority Mail 

Priority Mail 

Outbound Priority Mail International 

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Royal Mail Group Inbound Air Parcel Post 

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International Priority Airlift (IPA) 

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International Direct Sacks—M–Bags 

Global Customized Shipping Services 

Inbound Surface Parcel Post (at Non-UPU 

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Canada Post—United States Postal Service 

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8 and CP2009–9) 

International Money Transfer Service 

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Special Services 

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Express Mail Contract 1 (MC2008–5) 

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Express Mail & Priority Mail Contract 1 

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Priority Mail Contract 1 (MC2008–8 and 

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Priority Mail Contract 3 (MC2009–4 and 

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Priority Mail Contract 4 (MC2009–5 and 

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Priority Mail Contract 5 (MC2009–21 and 

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Outbound International 

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CP2009–10, and CP2009–11) 

Global Expedited Package Services (GEPS) 

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GEPS 1 (CP2008–5, CP2008–11, CP2008– 

12, and CP2008–13, CP2008–18, 

CP2008–19, CP2008–20, CP2008–21, 

CP2008–22, CP2008–23, and CP2008–24) 

Global Plus Contracts 

Global Plus 1 (CP2008–9 and CP2008–10) 

Global Plus 2 (MC2008–7, CP2008–16 and 

CP2008–17) 

Inbound International 

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CP2009–20) 

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Priority 

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Priority Mail 

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Outbound Priority Mail International 

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Inbound Air Parcel Post 

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Parcel Select 

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International 

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International Priority Airlift (IPA) 

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International Surface Airlift (ISAL) 

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International Direct Sacks—M-Bags 

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Global Customized Shipping Services 

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International Money Transfer Service 

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Part C—Glossary of Terms and Conditions 

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Mail [Reserved] 

[FR Doc. E9–13046 Filed 6–3–09; 8:45 am] 

BILLING CODE 7710–FW–P 

NATIONAL SCIENCE FOUNDATION 

45 CFR Part 681 

RIN 3145–AA50 

Program Fraud Civil Remedies Act 

AGENCY: National Science Foundation. 

ACTION: Final rule. 

SUMMARY: This final rule implements 

the Program Fraud Civil Remedies Act 

of 1986 (PFCRA), which authorizes NSF 

to impose, through administrative 

adjudication, civil penalties and 

assessments against any person who 

makes, submits, or presents, or causes to 

be made, submitted, or presented, a 

false, fictitious, or fraudulent claim or 

written statement to the agency. The 

regulations establish the procedures that 

NSF will follow in implementing 

PFCRA, and specify the hearing and 

appeal rights of persons subject to 

penalties and assessments under 

PFCRA. 

DATES: Effective Date: These regulations 

are effective July 6, 2009. 

FOR FURTHER INFORMATION CONTACT: Eric 

S. Gold, Assistant General Counsel, 

Office of the General Counsel, National 

Science Foundation, 4201 Wilson 

Boulevard, Room 1265, Arlington, 

Virginia 22230, Telephone: 703–292– 

8060. 

SUPPLEMENTARY INFORMATION: 

Background 

In October 1986, Congress enacted the 

Program Fraud Civil Remedies Act, 

Public Law 99–509 (codified at 31 

U.S.C. 3801–3812) to establish an 

administrative remedy against any 

26794 Federal Register / Vol. 74, No. 106 / Thursday, June 4, 2009 / Rules and Regulations 

person who makes, or causes to be 

made, a false claim or written statement 

to any of certain Federal agencies. In 

brief, it requires the affected Federal 

agencies to follow certain procedures in 

recovering penalties and assessments 

against individuals who file false claims 

or statements for which the liability is 

$150,000 or less. When PFCRA was 

enacted, its coverage did not extend to 

NSF. However, pursuant to section 7017 

of the America COMPETES Act (Pub. L. 

110–69), the scope of PFCRA’s coverage 

has been expanded to include NSF. 

PFCRA requires each affected agency 

to promulgate rules and regulations 

necessary to implement its provisions. 

Following PFCRA’s enactment, at the 

request of the President’s Council on 

Integrity and Efficiency (PCIE), an interagency task force was established under 

the leadership of the Department of 

Health and Human Services to develop 

model regulations for implementation of 

PFCRA by all affected agencies. This 

action was in keeping with the stated 

desire of the Senate Governmental 

Affairs Committee that ‘‘the regulations 

would be substantially similar 

throughout the government.’’ (S. Rep. 

No. 99–212, 99th Cong., 1st Sess. 12 

(1985)). The PCIE recommended 

adoption of the model rules by all 

affected agencies. 

NSF published a proposed rule with 

request for comment in the Federal 

Register on December 30, 2008 [73 FR 

79761]. No comments were received. 

Thus, NSF has decided to issue the final 

rule as proposed. 

Statutory and Regulatory Analysis 

Under the Act, false claims and 

statements subject to its provisions are 

to be investigated by an agency’s 

investigating official. The results of the 

investigation are then reviewed by an 

agency reviewing official who 

determines whether there is adequate 

evidence to believe that the person 

named in the report is liable under the 

Act. Upon an affirmative finding of 

adequate evidence, the reviewing 

official sends to the Attorney General a 

written notice of the official’s intent to 

refer the matter to a presiding officer for 

an administrative hearing. The agency 

may institute administrative 

proceedings against the person only if 

the Attorney General (or his/her 

designee) approves. Any penalty or 

assessment imposed under the Act may 

be collected by the Attorney General 

through the filing of a civil action, or by 

offsetting amounts, other than tax 

refunds, owed the particular party by 

the Federal government. 

The regulations designate the NSF 

General Counsel or his or her designee 

as the reviewing official. Any 

administrative adjudication under the 

Act will be presided over by an 

Administrative Law Judge and any 

appeals from the Administrative Law 

Judge’s decision will be decided by the 

NSF Director or his or her designee. 

Paperwork Reduction Act of 1995 (44 

U.S.C., Chapter 35) 

This rule will not impose any 

additional reporting or recordkeeping 

requirements under the Paperwork 

Reduction Act. 

Executive Order 12866 

OMB has determined this rule to be 

nonsignificant. 

Regulatory Flexibility Act of 1980 (5 

U.S.C. 605(b)) 

This rule will not have a significant 

adverse impact on a substantial number 

of small entities. 

Unfunded Mandates Act of 1995 

(Section 202, Pub. L. 104–4) 

This rule does not contain a Federal 

mandate that will result in the 

expenditure by State, local, and tribal 

governments, in aggregate, or by the 

private sector of $100 million or more 

in any one year. 

Federalism (Executive Order 13132) 

This rule does not have Federalism 

implications, as set forth in Executive 

Order 13132. It will not have substantial 

direct effects on the States, on the 

relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. 

List of Subjects in 45 CFR Part 681 

Claims, Fraud, Penalties. 

■ For the reasons stated in the preamble, 

NSF adds a new part 681 to chapter VI 

of title 45 of the Code of Federal 

Regulations to read as follows: 

PART 681—PROGRAM FRAUD CIVIL 

REMEDIES ACT REGULATIONS 

Purpose, Definitions, and Basis for Liability 

Sec. 

681.1 Purpose. 

681.2 Definitions. 

681.3 What is the basis for the imposition 

of civil penalties and assessments? 

Procedures Leading to Issuance of a 

Complaint 

681.4 Who investigates program fraud? 

681.5 What happens if program fraud is 

suspected? 

681.6 When may NSF issue a complaint? 

681.7 What is contained in a complaint? 

681.8 How will the complaint be served? 

Procedures Following Service of a 

Complaint 

681.9 How does a defendant respond to the 

complaint? 

681.10 What happens if a defendant fails to 

file an answer? 

681.11 What happens once an answer is 

filed? 

Hearing Procedures 

681.12 What kind of hearing is 

contemplated? 

681.13 At the hearing, what rights do the 

parties have? 

681.14 What is the role of the ALJ? 

681.15 How are the functions of the ALJ 

separated from those of the investigating 

official and the reviewing official? 

681.16 Can the reviewing official or the ALJ 

be disqualified? 

681.17 What rights are there to review 

documents? 

681.18 What type of discovery is authorized 

and how is it conducted? 

681.19 Are witness lists exchanged before 

the hearing? 

681.20 Can witnesses be subpoenaed? 

681.21 Who pays the costs for a subpoena? 

681.22 Are protective orders available? 

681.23 How are documents filed and served 

with the ALJ? 

681.24 How is time computed? 

681.25 Where is the hearing held? 

681.26 How will the hearing be conducted 

and who has the burden of proof? 

681.27 How is evidence presented at the 

hearing? 

681.28 How is witness testimony 

presented? 

681.29 Will the hearing proceedings be 

recorded? 

681.30 Are ex parte communications 

between a party and the ALJ permitted? 

681.31 Are there sanctions for misconduct? 

681.32 Are post-hearing briefs required? 

Decisions and Appeals 

681.33 How is the case decided? 

681.34 How are penalty and assessment 

amounts determined? 

681.35 Can a party request reconsideration 

of the initial decision? 

681.36 When does the initial decision of the 

ALJ become final? 

681.37 What are the procedures for 

appealing the ALJ decision? 

681.38 What happens if an initial decision 

is appealed? 

681.39 Are there any limitations on the 

right to appeal to the authority head? 

681.40 How does the authority head 

dispose of an appeal? 

681.41 What judicial review is available? 

681.42 Can the administrative complaint be 

settled voluntarily? 

681.43 How are civil penalties and 

assessments collected? 

681.44 Is there a right to administrative 

offset? 

681.45 What happens to collections? 

681.46 What if the investigation indicates 

criminal misconduct? 

Federal Register / Vol. 74, No. 106 / Thursday, June 4, 2009 / Rules and Regulations 26795 

Purpose, Definitions, and Basis for 

Liability 

§ 681.1 Purpose. 

This part implements the Program 

Fraud Civil Remedies Act of 1986, 31 

U.S.C. 3801–3812 (‘‘PFCRA’’). PFCRA 

provides NSF, and other Federal 

agencies, with an administrative remedy 

to impose civil penalties and 

assessments against persons who make, 

submit, or present, or cause to be made, 

submitted or presented, false, fictitious, 

or fraudulent claims or written 

statements to NSF. PFCRA also provides 

due process protections to all persons 

who are subject to administrative 

proceedings under this part. 

§ 681.2 Definitions. 

For the purposes of this part— 

ALJ means an Administrative Law 

Judge in the authority appointed 

pursuant to section 3105 of title 5 or 

detailed to the authority pursuant to 

section 3344 of title 5. 

Authority means the National Science 

Foundation. 

Authority head means the Director of 

the National Science Foundation or the 

Director’s designee. 

Benefit is intended to cover anything 

of value, including but not limited to, 

any advantage, preference, privilege, 

license, permit, favorable decision, 

ruling, status, or loan guarantee. 

Claim is defined in section 3801(a)(3) 

of title 31 of the United States Code. 

Complaint means the administrative 

complaint served by the reviewing 

official on the defendant under § 681.8. 

Defendant means any person alleged 

in a complaint under § 681.7 to be liable 

for a civil penalty or assessment 

pursuant to PFCRA. 

Government means the United States 

Government. 

Individual means a natural person. 

Initial decision means the written 

decision of the ALJ required by § 681.33, 

and includes a revised initial decision 

issued following a remand or a motion 

for reconsideration. 

Investigating official means the NSF 

Inspector General or an employee of the 

Office of Inspector General designated 

by the Inspector General. 

Knows or has reason to know is 

defined in section 3801(a)(5) of title 31 

of the United States Code. 

Makes shall include the terms 

presents, submits, and causes to be 

made, presented, or submitted. As the 

context requires, making or made shall 

likewise include the corresponding 

forms of such terms. 

Person means any individual, 

partnership, corporation, association, or 

private organization, and includes the 

plural of that term. 

Representative means an attorney 

who is in good standing of the bar of 

any State, Territory, or possession of the 

United States, or of the District of 

Columbia, or the Commonwealth of 

Puerto Rico, or any other individual 

designated in writing by the defendant. 

Reviewing official means the General 

Counsel of NSF or the General Counsel’s 

designee. 

Statement is defined in section 

3801(a)(9) of title 5 of the United States 

Code. 

§ 681.3 What is the basis for the 

imposition of civil penalties and 

assessments? 

(a) Claims. (1) Any person shall be 

subject, in addition to any other remedy 

that may be prescribed by law, to a civil 

penalty of not more than $5,000 for each 

claim if that person makes a claim that 

the person knows or has reason to 

know— 

(i) Is false, fictitious, or fraudulent; 

(ii) Includes or is supported by any 

written statement which asserts a 

material fact which is false, fictitious, or 

fraudulent; 

(iii) Includes or is supported by any 

written statement that— 

(A) Omits a material fact; 

(B) Is false, fictitious, or fraudulent as 

a result of such omission; and 

(C) Is a statement in which the person 

making such statement has a duty to 

include such material fact; or 

(iv) Is for payment for the provision 

of property or services which the person 

has not provided as claimed. 

(2) Each voucher, invoice, claim form, 

or other individual request or demand 

for property, services, or money 

constitutes a separate claim. 

(3) A claim shall be considered made 

to the authority, recipient, or party 

when such a claim is actually made to 

an agent, fiscal intermediary, or other 

entity, including any State or political 

subdivision of a State, acting for or on 

behalf of NSF. 

(4) Each claim for property, services, 

or money is subject to a civil penalty 

regardless of whether such property, 

services, or money is actually delivered 

or paid. 

(5) If the Government has made any 

payment on a claim, a person subject to 

a civil penalty under paragraph (a)(1) of 

this section may also be subject to an 

assessment of not more than twice the 

amount of such claim or that portion 

thereof that is determined to be in 

violation of paragraph (a)(1) of this 

section. Such assessment shall be in lieu 

of damages sustained by the 

Government because of such a claim. 

(b) Statements. (1) Any person shall 

be subject, in addition to any other 

remedy that may be prescribed by law, 

to a civil penalty of not more than 

$5,000 for each statement if that person 

makes a written statement that the 

person knows or has reason to know— 

(i) Asserts a material fact which is 

false, fictitious, or fraudulent; or 

(ii) Is false, fictitious, or fraudulent 

because it omits a material fact that the 

person making the statement has a duty 

to include in such a statement; and 

(iii) Contains or is accompanied by an 

express certification or affirmation of 

the truthfulness and accuracy of the 

contents of this statement. 

(2) A person will only be subject to a 

civil penalty under 681.3(b)(1) if the 

written statement made by the person 

contains or is accompanied by an 

express certification or affirmation of 

the truthfulness and accuracy of the 

contents of this statement. 

(3) Each written representation, 

certification, or affirmation constitutes a 

separate statement. 

(4) A statement shall be considered 

made to NSF when it is actually made 

to an agent, fiscal intermediary, or other 

entity, including any State or political 

subdivision of a State, acting for or on 

behalf of NSF. 

(c) No proof of specific intent to 

defraud is required to establish liability 

under this section. 

(d) In any case in which it is 

determined that more than one person 

is liable for making a false, fictitious, or 

fraudulent claim or statement under this 

section, each such person may be held 

liable for a civil penalty and assessment, 

where appropriate, under this section. 

(e) In any case in which it is 

determined that more than one person 

is liable for making a claim under this 

section on which the Government has 

made payment, an assessment may be 

imposed against any such person or 

jointly and severally against any 

combination of persons. 

Procedures Leading to Issuance of a 

Complaint 

§ 681.4 Who investigates program fraud? 

The Inspector General, or his or her 

designee, is the investigating official 

responsible for investigating allegations 

that a false claim or statement has been 

made. In this regard, the Inspector 

General has authority under PFCRA and 

the Inspector General Act of 1978 (5 

U.S.C. App. 3), as amended, to issue 

administrative subpoenas for the 

production of records and documents. 

§ 681.5 What happens if program fraud is 

suspected? 

(a) If the investigating official 

concludes that an action under this part 

is warranted, the investigating official 

26796 Federal Register / Vol. 74, No. 106 / Thursday, June 4, 2009 / Rules and Regulations 

submits a report containing the findings 

and conclusions of the investigation to 

the reviewing official. If the reviewing 

official determines that the report 

provides adequate evidence that a 

person made a false, fictitious or 

fraudulent claim or statement, the 

reviewing official shall transmit to the 

Attorney General written notice of an 

intention to refer the matter for 

adjudication, with a request for 

approval of such referral. This notice 

will include the reviewing official’s 

statements concerning: 

(1) The reasons for the referral; 

(2) The claims or statements upon 

which liability would be based; 

(3) The evidence that supports 

liability; 

(4) An estimate of the amount of 

money or the value of property, 

services, or other benefits requested or 

demanded in the false claim or 

statement; 

(5) Any exculpatory or mitigating 

circumstances that may relate to the 

claims or statements known by the 

reviewing official or the investigating 

official; and 

(6) A statement that there is a 

reasonable prospect of collecting an 

appropriate amount of penalties and 

assessments. 

(b) If, at any time, the Attorney 

General or his or her designee requests 

in writing that this administrative 

process be stayed, the authority head, as 

identified in § 681.2(c) of this part, must 

stay the process immediately. The 

authority head may order the process 

resumed only upon receipt of the 

written authorization of the Attorney 

General. 

§ 681.6 When may NSF issue a complaint? 

NSF may issue a complaint: 

(a) If the Attorney General (or 

designee) approves the referral of the 

allegations for adjudication; and 

(b) In a case of submission of false 

claims, if the amount of money or the 

value of property or services demanded 

or requested in a false claim, or a group 

of related claims submitted at the same 

time, does not exceed $150,000. 

§ 681.7 What is contained in a complaint? 

(a) A complaint is a written statement 

giving notice to the person alleged to be 

liable under 31 U.S.C. 3802 of the 

specific allegations being referred for 

adjudication and of the person’s right to 

request a hearing with respect to those 

allegations. 

(b) The complaint will state that NSF 

seeks to impose civil penalties, 

assessments, or both, against the 

defendant and will include: 

(1) The allegations of liability against 

the defendant, including the statutory 

basis for liability, identification of the 

claims or statements involved, and the 

reasons liability allegedly arises from 

such claims or statements; 

(2) The maximum amount of penalties 

and assessments for which the 

defendant may be held liable; 

(3) A statement that the defendant 

may request a hearing by filing an 

answer and may be represented by a 

representative; 

(4) Instructions for filing such an 

answer; and 

(5) A warning that failure to file an 

answer within 30 days of service of the 

complaint will result in imposition of 

the maximum amount of penalties and 

assessments. 

(c) The reviewing official must serve 

any complaint on the defendant and, if 

a hearing is requested by the defendant, 

provide a copy to the ALJ assigned to 

the case. 

§ 681.8 How will the complaint be served? 

(a) The complaint must be served on 

individual defendants directly, a 

partnership through a general partner, 

and on corporations or on 

unincorporated associations through an 

executive officer or a director, except 

that service also may be made on any 

person authorized by appointment or by 

law to receive process for the defendant. 

(b) The complaint may be served 

either by: 

(1) Registered or certified mail; or 

(2) Personal delivery by anyone 18 

years of age or older. 

(c) The date of service is the date of 

personal delivery or, in the case of 

service by registered or certified mail, 

the date of postmark. 

(d) When served with the complaint, 

the defendant should also be served 

with a copy of this part 681 and 31 

U.S.C. 3801–3812. 

Procedures Following Service of a 

Complaint 

§ 681.9 How does a defendant respond to 

the complaint? 

(a) A defendant may file an answer 

with the reviewing official within 30 

days of service of the complaint. An 

answer will be considered a request for 

an oral hearing. 

(b) In the answer, a defendant— 

(1) Must admit or deny each of the 

allegations of liability contained in the 

complaint (a failure to deny an 

allegation is considered an admission); 

(2) Must state any defense on which 

the defendant intends to rely; 

(3) May state any reasons why he or 

she believes the penalties, assessments, 

or both should be less than the statutory 

maximum; and 

(4) Must state the name, address, and 

telephone number of the person 

authorized by the defendant to act as the 

defendant’s representative, if any. 

(c) If the defendant is unable to file a 

timely answer which meets the 

requirements set forth in paragraph (b) 

of this section, the defendant may file 

with the reviewing official a general 

answer denying liability, requesting a 

hearing, and requesting an extension of 

time in which to file a complete answer. 

A general answer must be filed within 

30 days of service of the complaint. 

(d) If the defendant initially files a 

general answer requesting an extension 

of time, the reviewing official must 

promptly file with the ALJ the 

complaint, the general answer, and the 

request for an extension of time. 

(e) For good cause shown, the ALJ 

may grant the defendant up to 30 

additional days within which to file an 

answer meeting the requirements of 

paragraph (b) of this section. Such 

answer must be filed with the ALJ and 

a copy must be served on the reviewing 

official. 

§ 681.10 What happens if a defendant fails 

to file an answer? 

(a) If a defendant does not file any 

answer within 30 days after service of 

the complaint, the reviewing official 

may refer the complaint to the ALJ. 

(b) Once the complaint is referred, the 

ALJ will promptly serve on the 

defendant a notice that an initial 

decision will be issued. 

(c) The ALJ will assume the facts 

alleged in the complaint to be true and, 

if such facts establish liability under the 

statute, the ALJ will issue an initial 

decision imposing the maximum 

amount of penalties and assessments 

allowed under PFCRA. 

(d) Except as otherwise provided in 

this section, when a defendant fails to 

file a timely answer, the defendant 

waives any right to further review of the 

penalties and assessments imposed in 

the initial decision. 

(e) The initial decision becomes final 

30 days after it is issued. 

(f) At any time before an initial 

decision becomes final, a defendant may 

file a motion with the ALJ asking that 

the case be reopened. An ALJ may only 

reopen a case if, in this motion, he or 

she determines that the defendant set 

forth extraordinary circumstances that 

prevented the defendant from filing a 

timely answer. The initial decision will 

be stayed until the ALJ makes a decision 

on the motion. The reviewing official 

may respond to the motion. 

(g) If the ALJ determines that a 

defendant has demonstrated 

extraordinary circumstances excusing 

his failure to file a timely answer, the 

ALJ will withdraw the initial decision, 

Federal Register / Vol. 74, No. 106 / Thursday, June 4, 2009 / Rules and Regulations 26797 

and grant the defendant an opportunity 

to answer the complaint. 

(h) A decision by the ALJ to deny a 

defendant’s motion to reopen a case is 

not subject to reconsideration under 

§ 681.35. 

(i) The defendant may appeal to the 

authority head the decision denying a 

motion to reopen by filing a notice of 

appeal with the authority head within 

15 days after the ALJ denies the motion. 

The timely filing of a notice of appeal 

shall stay the initial decision until the 

authority head decides the issue. 

(j) If the defendant files a timely 

notice of appeal with the authority 

head, the ALJ shall forward the record 

of the proceeding to the authority head. 

(k) The authority head shall decide 

expeditiously, based solely on the 

record before the ALJ, whether 

extraordinary circumstances excuse the 

defendant’s failure to file a timely 

answer. 

(l) If the authority head decides that 

extraordinary circumstances excused 

the defendant’s failure to file a timely 

answer, the authority head shall remand 

the case to the ALJ with instructions to 

grant the defendant an opportunity to 

answer. 

(m) If the authority head decides that 

the defendant’s failure to file a timely 

answer is not excused, the authority 

head shall reinstate the initial decision 

of the ALJ, which shall become final 

and binding upon the parties 30 days 

after the authority head issues such a 

decision. 

§ 681.11 What happens once an answer is 

filed? 

(a) When the reviewing official 

receives an answer, he or she must file 

concurrently, the complaint and the 

answer with the ALJ, along with a 

designation of NSF’s representative. 

(b) When the ALJ receives the 

complaint and the answer, the ALJ will 

promptly serve a notice of hearing upon 

the defendant and the NSF 

representative, in the same manner as 

the complaint, which is described in 

§ 681.8. The notice of oral hearing must 

be served within six years of the date on 

which the claim or statement is made. 

(c) The notice must include: 

(1) The tentative date, time, and place 

of the hearing; 

(2) The legal authority and 

jurisdiction under which the hearing is 

being held; 

(3) The matters of fact and law to be 

asserted; 

(4) A description of the procedures for 

the conduct of the hearing; 

(5) The name, address, and telephone 

number of the defendant’s 

representative and the representative for 

NSF; and 

(6) Such other matters as the ALJ 

deems appropriate. 

Hearing Procedures 

§ 681.12 What kind of hearing is 

contemplated? 

The hearing is a formal proceeding 

conducted by the ALJ during which a 

defendant will have the opportunity to 

cross-examine witnesses, present 

testimony, and dispute liability. 

§ 681.13 At the hearing, what rights do the 

parties have? 

Each party has the right to: 

(a) Be represented by a representative; 

(b) Request a pre-hearing conference 

and participate in any conference held 

by the ALJ; 

(c) Conduct discovery; 

(d) Agree to stipulations of fact or law 

which will be made a part of the record; 

(e) Present evidence relevant to the 

issues at the hearing; 

(f) Present and cross-examine 

witnesses; 

(g) Present arguments at the hearing as 

permitted by the ALJ; and 

(h) Submit written briefs and 

proposed findings of fact and 

conclusions of law after the hearing, as 

permitted by the ALJ. 

§ 681.14 What is the role of the ALJ? 

An ALJ retained by NSF serves as the 

presiding officer at all hearings. 

(a) The ALJ shall conduct a fair and 

impartial hearing, avoid delay, maintain 

order, and assure that a record of the 

proceeding is made. 

(b) The ALJ has the authority to— 

(1) Set and change the date, time, and 

place of the hearing upon reasonable 

notice to the parties; 

(2) Continue or recess the hearing in 

whole or in part for a reasonable period 

of time; 

(3) Hold conferences to identify or 

simplify the issues, or to consider other 

matters that may aid in the expeditious 

disposition of the proceeding; 

(4) Administer oaths and affirmations; 

(5) Issue subpoenas requiring the 

attendance of witnesses and the 

production of documents at depositions 

or at hearings; 

(6) Rule on motions and other 

procedural matters; 

(7) Regulate the scope and timing of 

discovery; 

(8) Regulate the course of the hearing 

and the conduct of representatives and 

parties; 

(9) Examine witnesses; 

(10) Receive, rule on, exclude, or limit 

evidence; 

(11) Upon motion of a party, take 

official notice of facts; 

(12) Upon motion of a party, decide 

cases, in whole or in part, by summary 

judgment where there is no disputed 

issue of material fact; 

(13) Conduct any conference, 

argument or hearing on motions in 

person or by telephone; and 

(14) Exercise such other authority as 

is necessary to carry out the 

responsibilities of the ALJ under this 

part. 

(c) The ALJ does not have the 

authority to find Federal statutes or 

regulations invalid. 

§ 681.15 How are the functions of the ALJ 

separated from those of the investigating 

official and the reviewing official? 

(a) The investigating official, the 

reviewing official, and any employee or 

agent of the authority who takes part in 

investigating, preparing, or presenting a 

particular case may not, in such case or 

a factually related case: 

(1) Participate in the hearing as the 

ALJ; 

(2) Participate or advise in the review 

of the initial decision by the authority 

head; or 

(3) Make the collection of penalties 

and assessment under 31 U.S.C. 3806. 

(b) The ALJ shall not be responsible 

to or subject to the supervision or 

direction of the investigating official or 

the reviewing official. 

§ 681.16 Can the reviewing official or ALJ 

be disqualified? 

(a) A reviewing official or an ALJ may 

disqualify himself or herself at any time. 

(b) Upon motion of any party, the 

reviewing official or ALJ may be 

disqualified as follows: 

(1) The motion must be supported by 

an affidavit containing specific facts 

establishing that personal bias or other 

reason for disqualification exists, 

including the time and circumstances of 

the discovery of such facts; 

(2) The motion must be filed promptly 

after discovery of the grounds for 

disqualification or the objection will be 

deemed waived; and 

(3) The party, or representative of 

record, must certify in writing that the 

motion is made in good faith. 

(c) Once a motion has been filed to 

disqualify the reviewing official, the ALJ 

will halt the proceedings until resolving 

the matter of disqualification. If the ALJ 

determines that the reviewing official is 

disqualified, the ALJ will dismiss the 

complaint without prejudice. If the ALJ 

disqualifies himself or herself, the case 

will be promptly reassigned to another 

ALJ. 

§ 681.17 What rights are there to review 

documents? 

(a) Once the ALJ issues a hearing 

notice pursuant to § 681.11(b), and upon 

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written request to the reviewing official, 

the defendant may: 

(1) Review any relevant and material 

documents, transcripts, records, and 

other materials that relate to the 

allegations set out in the complaint and 

upon which the findings and 

conclusions of the investigating official 

are based, unless such documents are 

subject to a privilege under Federal law. 

Upon payment of fees for duplication, 

the defendant may obtain copies of such 

documents; and 

(2) Obtain a copy of all exculpatory 

information in the possession of the 

reviewing official or investigating 

official relating to the allegations in the 

complaint, even if it is contained in a 

document that would otherwise be 

privileged. If the document would 

otherwise be privileged, only that 

portion containing exculpatory 

information must be disclosed. 

(b) The notice sent to the Attorney 

General from the reviewing official as 

described in § 681.5(a) is not 

discoverable under any circumstances. 

(c) If the reviewing official does not 

respond to the defendant’s request 

within 20 days, the defendant may file 

a motion to compel disclosure of the 

documents with the ALJ subject to the 

provisions of this section. Such a 

motion may only be filed with the ALJ 

following the filing of an answer 

pursuant to § 681.9. 

§ 681.18 What type of discovery is 

authorized and how is it conducted? 

(a) The following types of discovery 

are authorized: 

(1) Requests for production of 

documents for inspection and copying; 

(2) Requests for admissions of 

authenticity of any relevant document 

or of the truth of any relevant fact; 

(3) Written interrogatories; and 

(4) Depositions. 

(b) For the purpose of this section, the 

term ‘‘documents’’ includes 

information, documents, reports, 

answers, records, accounts, papers, and 

other data and documentary evidence. 

Nothing contained herein shall be 

interpreted to require the creation of a 

document. 

(c) Unless mutually agreed to by the 

parties, discovery is available only as 

ordered by the ALJ. The ALJ shall 

regulate the timing of discovery. 

(d) Motions for Discovery. (1) A party 

seeking discovery may file a motion 

with the ALJ. Such a motion shall be 

accompanied by a copy of the requested 

discovery, or in the case of depositions, 

a summary of the scope of the proposed 

deposition. 

(2) Within ten days of service, a party 

may file an opposition to the motion 

and/or a motion for protective order as 

provided in § 681.22. 

(3) The ALJ may grant a motion for 

discovery only if he or she finds that the 

discovery sought— 

(i) Is necessary for the expeditious, 

fair, and reasonable consideration of the 

issues; 

(ii) Is not unduly costly or 

burdensome; 

(iii) Will not unduly delay the 

proceeding; and 

(iv) Does not seek privileged 

information. 

(4) The burden of showing that 

discovery should be allowed is on the 

party seeking discovery. 

(5) The ALJ may grant discovery 

subject to a protective order under 

§ 681.22. 

(e) Depositions. (1) If a motion for 

deposition is granted, the ALJ shall 

issue a subpoena for the deponent, 

which may require the deponent to 

produce documents. The subpoena shall 

specify the time and place at which the 

deposition will be held. 

(2) The party seeking to depose shall 

serve the subpoena in the manner 

prescribed by § 681.8. 

(3) The deponent may file with the 

ALJ a motion to quash the subpoena or 

a motion for a protective order within 

ten days of service. 

(4) The party seeking to depose shall 

provide for the taking of a verbatim 

transcript of the deposition, which it 

shall make available to all other parties 

for inspection and copying. 

(f) Each party shall bear its own costs 

of discovery. 

§ 681.19 Are witness lists exchanged 

before the hearing? 

(a) As ordered by the ALJ, the parties 

must exchange witness lists and copies 

of proposed hearing exhibits, including 

copies of any written statements or 

transcripts of deposition testimony that 

each party intends to offer in lieu of live 

testimony. 

(b) If a party objects, the ALJ will not 

admit into evidence the testimony of 

any witness whose name does not 

appear on the witness list or any exhibit 

not provided to an opposing party in 

advance unless the ALJ finds good cause 

for the omission or concludes that there 

is no prejudice to the objecting party. 

(c) Unless a party objects within the 

time set by the ALJ, documents 

exchanged in accordance with this 

section are deemed to be authentic for 

the purpose of admissibility at the 

hearing. 

§ 681.20 Can witnesses be subpoenaed? 

(a) A party wishing to procure the 

appearance and testimony of any 

individual at the hearing may request 

that the ALJ issue a subpoena. 

(b) A subpoena requiring the 

attendance and testimony of an 

individual may also require the 

individual to produce documents at the 

hearing. 

(c) A party seeking a subpoena shall 

file a written request not less than 15 

days before the date of the hearing 

unless otherwise allowed by the ALJ for 

good cause shown. Such request shall 

specify any documents to be produced 

and shall designate the witnesses and 

describe the address and location 

thereof with sufficient particularity to 

permit such witnesses to be found. 

(d) The subpoena shall specify the 

time and place at which the witness is 

to appear and any documents the 

witness is to produce. 

(e) The party seeking the subpoena 

shall serve it in the manner prescribed 

in § 681.8. A subpoena on a party or 

upon an individual under the control of 

a party may be served by first class mail. 

(f) A party or the individual to whom 

the subpoena is directed may file with 

the ALJ a motion to quash the subpoena 

within ten days after service or on or 

before the time specified in the 

subpoena for compliance if it is less 

than ten days after service. 

§ 681.21 Who pays the costs for a 

subpoena? 

The party requesting a subpoena shall 

pay the cost of the fees and mileage of 

any witness subpoenaed in the amounts 

that would be payable to a witness in a 

proceeding in United States District 

Court. A check for witness fees and 

mileage shall accompany the subpoena 

when served, except that when a 

subpoena is issued on behalf of NSF, a 

check of fees and mileage need not 

accompany the subpoena. 

§ 681.22 Are protective orders available? 

(a) A party or prospective witness or 

deponent may file a motion for a 

protective order with respect to 

discovery sought by an opposing party 

or with respect to the hearing, seeking 

to limit the availability or disclosure of 

evidence. 

(b) In issuing a protective order, the 

ALJ may make any order which justice 

requires to protect a party or person 

from annoyance, embarrassment, 

oppression, or undue burden or 

expense, including one or more of the 

following: 

(1) That the discovery not be had; 

(2) That the discovery may be had 

only on specified terms and conditions; 

(3) That the discovery may be had 

only through a method of discovery 

other than requested; 

Federal Register / Vol. 74, No. 106 / Thursday, June 4, 2009 / Rules and Regulations 26799 

(4) That certain matters not be 

inquired into, or that the scope of 

discovery be limited to certain matters; 

(5) That discovery be conducted with 

no one present except persons 

designated by the ALJ; 

(6) That the contents of the discovery 

be sealed; 

(7) That a deposition after being 

sealed be opened only by order of the 

ALJ; 

(8) That a trade secret or other 

confidential research, development, 

commercial information, or facts 

pertaining to any criminal investigation, 

proceeding, or other administrative 

investigation not be disclosed or be 

disclosed only in a designated way; or 

(9) That the parties simultaneously 

file specified documents or information 

enclosed in sealed envelopes to be 

opened as directed by the ALJ. 

§ 681.23 How are documents filed and 

served with the ALJ? 

(a) Documents filed with the ALJ must 

include an original and two copies. 

Every document filed in the proceeding 

must contain a title (e.g., motion to 

quash subpoena), a caption setting forth 

the title of the action, and the case 

number assigned by the ALJ. Every 

document must be signed by the person 

on whose behalf the paper was filed, or 

his or her representative. 

(b) Documents are considered filed 

when they are mailed. The date of 

mailing may be established by a 

certificate from the party or its 

representative, or by proof that the 

document was sent by certified or 

registered mail. 

(c) A party filing a document with the 

ALJ must, at the time of filing, serve a 

copy of such document on every other 

party. When a party is represented by a 

representative, the party’s representative 

must be served in lieu of the party. 

(d) A certificate of the individual 

serving the document constitutes proof 

of service. The certificate must set forth 

the manner in which the document was 

served. 

§ 681.24 How is time computed? 

(a) In computing any period of time 

under this part or in an order issued 

thereunder, the time begins with the day 

following the act, event, or default, and 

includes the last day of the period, 

unless it is a Saturday, Sunday, or legal 

holiday observed by the Federal 

government, in which event it includes 

the next business day. 

(b) When the period of time allowed 

is less than seven days, intermediate 

Saturdays, Sundays, and legal holidays 

observed by the Federal government are 

excluded from the computation. 

(c) Where a document has been served 

or issued by placing it in the mail, an 

additional five days will be added to the 

time permitted for any response. 

§ 681.25 Where is the hearing held? 

The ALJ will hold the hearing in any 

judicial district of the United States: 

(a) In which the defendant resides or 

transacts business; or 

(b) In which the claim or statement on 

which liability is based was made to 

NSF; or 

(c) As agreed upon by the defendant 

and the ALJ. 

§ 681.26 How will the hearing be 

conducted and who has the burden of 

proof? 

(a) The ALJ conducts a hearing in 

order to determine whether a defendant 

is liable for a civil penalty, assessment, 

or both and, if so, the appropriate 

amount of the penalty and/or 

assessment. The hearing will be 

recorded and transcribed, and the 

transcript of testimony, exhibits 

admitted at the hearing, and all papers 

filed in the proceeding constitute the 

record for a decision by the ALJ. 

(b) NSF must prove a defendant’s 

liability and any aggravating factors by 

a preponderance of the evidence. 

(c) A defendant must prove any 

affirmative defenses and any mitigating 

factors by a preponderance of the 

evidence. 

§ 681.27 How is evidence presented at the 

hearing? 

(a) The ALJ shall determine the 

admissibility of evidence. 

(b) Except as provided in this part, the 

ALJ shall not be bound by the Federal 

Rules of Evidence. However, the ALJ 

may apply the Federal Rules of 

Evidence where he or she deems 

appropriate. 

(c) The ALJ shall exclude irrelevant 

and immaterial evidence. 

(d) Although relevant, evidence may 

be excluded if its probative value is 

substantially outweighed by the danger 

of unfair prejudice, confusion of the 

issues, or by considerations of undue 

delay or needless presentation of 

cumulative evidence. 

(e) Although relevant, evidence shall 

be excluded if it is privileged under 

Federal law. 

(f) Evidence concerning offers of 

compromise or settlement shall be 

inadmissible to the extent provided in 

Rule 408 of the Federal Rules of 

Evidence. 

(g) The ALJ shall permit the parties to 

introduce rebuttal witnesses and 

evidence. 

§ 681.28 How is witness testimony 

presented? 

(a) Except as provided in paragraph 

(b) of this section, testimony at the 

hearing shall be given orally by 

witnesses under oath or affirmation. 

(b) At the discretion of the ALJ, 

testimony may be admitted in the form 

of a written statement or deposition. 

Any such statement must be provided to 

all other parties along with the last 

known address of such witness, in a 

manner which allows sufficient time for 

other parties to subpoena such witness 

for cross-examination at the hearing. 

Prior written statements of witnesses 

proposed to testify at the hearing and 

deposition transcripts shall be 

exchanged as provided in § 681.19. 

(c) The ALJ shall exercise reasonable 

control over the mode and order of 

interrogating witnesses and presenting 

evidence. 

(d) The ALJ shall permit the parties to 

conduct such cross examination as may 

be required for a full and true disclosure 

of the facts. 

(e) Upon motion of any party, the ALJ 

shall order witnesses excluded from the 

hearing room so that they cannot hear 

the testimony of other witnesses. This 

rule does not authorize exclusion of— 

(1) A party who is an individual; 

(2) In the case of a party that is not 

an individual, an officer or employee of 

the party appearing for the entity pro se 

or designated by the party’s 

representative; or 

(3) An individual whose presence is 

shown by a party to be essential to the 

presentation of its case, including an 

individual employed by the 

Government engaged in assisting the 

representative for the Government. 

§ 681.29 Will the hearing proceedings be 

recorded? 

The hearing will be recorded and 

transcribed. The transcript of testimony, 

exhibits and other evidence admitted at 

the hearing, and all papers and requests 

filed in the proceeding constitute the 

record for the decision by the ALJ and 

the authority head. 

§ 681.30 Are ex parte communications 

between a party and the ALJ permitted? 

Ex parte communications between a 

party and the ALJ are not permitted 

unless the other party consents to such 

a communication taking place. This 

does not prohibit a party from inquiring 

about the status of a case or asking 

routine questions concerning 

administrative functions or procedures. 

§ 681.31 Are there sanctions for 

misconduct? 

(a) The ALJ may sanction a person, 

including any party or representative, 

26800 Federal Register / Vol. 74, No. 106 / Thursday, June 4, 2009 / Rules and Regulations 

for failing to comply with an order, or 

for engaging in other misconduct that 

interferes with the speedy, orderly, and 

fair conduct of a hearing. 

(b) Any such sanction shall 

reasonably relate to the severity and 

nature of the misconduct. 

(c) When a party fails to comply with 

an order, including an order for taking 

a deposition, the production of evidence 

within the party’s control, or a request 

for admission, the ALJ may: 

(1) Draw an inference in favor of the 

requesting party with regard to the 

information sought; 

(2) In the case of requests for 

admission, deem each matter of which 

an admission is requested to be 

admitted; 

(3) Prohibit the party failing to 

comply with such order from 

introducing evidence concerning, or 

otherwise relying upon testimony 

relating to the information sought; and 

(4) Strike any part of the pleadings or 

other submissions of the party failing to 

comply with such a request. 

(d) The ALJ may refuse to consider 

any motion, request, response, brief or 

other document which is not filed in a 

timely fashion. 

(e) If a party fails to prosecute or 

defend an action under this part 

commenced by service of a notice of 

hearing, the ALJ may dismiss the action 

or may issue an initial decision 

imposing penalties and assessments. 

§ 681.32 Are post-hearing briefs required? 

Post-hearing briefs are not required, 

but the ALJ may permit them at his or 

her discretion. 

Decisions and Appeals 

§ 681.33 How is the case decided? 

(a) The ALJ will issue an initial 

decision based only on the record. It 

will contain findings of fact, 

conclusions of law, and the amount of 

any penalties and assessments imposed. 

(b) The ALJ will serve the initial 

decision on all parties within 90 days 

after the close of the hearing or, if the 

filing of post-hearing briefs were 

permitted, within 90 days after the final 

post-hearing brief was filed. 

(c) The findings of fact must include 

a finding on each of the following 

issues: 

(1) Whether any one or more of the 

claims or statements identified in the 

complaint violate this part; and 

(2) If the defendant is liable for 

penalties or assessments, the 

appropriate amount of any such 

penalties or assessments, considering 

any mitigating or aggravating factors. 

(d) The initial decision will include a 

description of the right of a defendant 

found liable for a civil penalty or 

assessment to file a motion for 

reconsideration with the ALJ or a notice 

of appeal with the authority head. 

§ 681.34 How are penalty and assessment 

amounts determined? 

(a) In determining an appropriate 

amount of civil penalties and 

assessments, the ALJ and the authority 

head, upon appeal, should evaluate any 

circumstances that mitigate or aggravate 

the violation and should articulate in 

their opinions the reasons that support 

the penalties and assessments they 

impose. Although not exhaustive, the 

following factors are among those that 

may influence the ALJ and the authority 

head in determining the amount of 

penalties and assessments to impose 

with respect to the misconduct charged 

in the complaint: 

(1) The number of false, fictitious, or 

fraudulent claims or statements; 

(2) The time period over which such 

claims or statements were made; 

(3) The degree of the defendant’s 

culpability with respect to the 

misconduct; 

(4) The amount of money or the value 

of the property, services, or benefit 

falsely claimed; 

(5) The value of the Government’s 

actual loss as a result of the misconduct, 

including foreseeable consequential 

damages and the cost of the 

investigation; 

(6) The relationship of the amount 

imposed as civil penalties to the amount 

of the Government’s loss; 

(7) The potential or actual impact of 

the misconduct upon public confidence 

in the management of Government 

programs and operations; 

(8) Whether the defendant has 

engaged in a pattern of the same or 

similar misconduct; 

(9) Whether the defendant attempted 

to conceal the misconduct; 

(10) The degree to which the 

defendant has involved others in the 

misconduct or in concealing it; 

(11) Where the misconduct of 

employees or agents is imputed to the 

defendant, the extent to which the 

defendant’s practices fostered or 

attempted to preclude such misconduct; 

(12) Whether the defendant 

cooperated in or obstructed an 

investigation of the misconduct; 

(13) Whether the defendant assisted 

in identifying and prosecuting other 

wrongdoers; 

(14) The complexity of the program or 

transaction, and the degree of the 

defendant’s sophistication with respect 

to it, including the extent of the 

defendant’s prior participation in the 

program or in similar transactions; 

(15) Whether the defendant has been 

found, in any criminal, civil, or 

administrative proceeding to have 

engaged in similar misconduct or to 

have dealt dishonestly with the 

Government of the United States or a 

state, directly or indirectly; and 

(16) The need to deter the defendant 

and others from engaging in the same or 

similar misconduct. 

(b) Nothing in this section shall be 

construed to limit the ALJ or the 

authority head from considering any 

other factors that in any given case may 

mitigate or aggravate the offense for 

which penalties and assessments are 

imposed. 

§ 681.35 Can a party request 

reconsideration of the initial decision? 

(a) Any party may file a motion for 

reconsideration of the initial decision 

with the ALJ within 20 days of receipt 

of the initial decision. If the initial 

decision was served by mail, there is a 

rebuttable presumption that the initial 

decision was received by the party 5 

days from the date of mailing. 

(b) A motion for reconsideration must 

be accompanied by a supporting brief 

and must describe specifically each 

allegedly erroneous decision. 

(c) Any response to a motion for 

reconsideration will only be allowed if 

it is requested by the ALJ. 

(d) The ALJ will dispose of a motion 

for reconsideration by denying it or by 

issuing a revised initial decision. 

(e) If the ALJ issues a revised initial 

decision upon motion of a party, no 

further motions for reconsideration may 

be filed by any party. 

§ 681.36 When does the initial decision of 

the ALJ become final? 

(a) The initial decision of the ALJ 

becomes the final decision of NSF, and 

shall be binding on all parties 30 days 

after it is issued, unless any party timely 

files a motion for reconsideration or any 

defendant adjudged to have submitted a 

false, fictitious, or fraudulent claim or 

statement timely appeals to the 

authority head of NSF, as set forth in 

§ 681.37. 

(b) If the ALJ disposes of a motion for 

reconsideration by denying it or by 

issuing a revised initial decision, the 

ALJ’s order on the motion for 

reconsideration becomes the final 

decision of NSF 30 days after the order 

is issued, unless a defendant adjudged 

to have submitted a false, fictitious, 

fraudulent claim or statement timely 

appeals to the authority head of NSF, as 

set forth in § 681.37. 

Federal Register / Vol. 74, No. 106 / Thursday, June 4, 2009 / Rules and Regulations 26801 

§ 681.37 What are the procedures for 

appealing the ALJ decision? 

(a) Any defendant who submits a 

timely answer and is found liable for a 

civil penalty or assessment in an initial 

decision may appeal the decision. 

(b) The defendant may file a notice of 

appeal with the authority head within 

30 days following issuance of the initial 

decision, serving a copy of the notice of 

appeal on all parties and the ALJ. The 

authority head may extend this deadline 

for up to an additional 30 days if an 

extension request is filed within the 

initial 30-day period and shows good 

cause. 

(c) The defendant’s appeal will not be 

considered until all timely motions for 

reconsideration have been resolved. 

(d) If a timely motion for 

reconsideration is denied, a notice of 

appeal may be filed within 30 days 

following such denial or issuance of a 

revised initial decision, whichever 

applies. 

(e) A notice of appeal must be 

supported by a written brief specifying 

why the initial decision should be 

reversed or modified. 

(f) The NSF representative may file a 

brief in opposition to the notice of 

appeal within 30 days of receiving the 

defendant’s appeal and supporting brief. 

(g) If a defendant timely files a notice 

of appeal, and the time for filing 

reconsideration motions has expired, 

the ALJ will forward the record of the 

proceeding to the authority head. 

§ 681.38 What happens if an initial 

decision is appealed? 

(a) An initial decision is stayed 

automatically pending disposition of a 

motion for reconsideration or of an 

appeal to the authority head. 

(b) No administrative stay is available 

following a final decision of the 

authority head. 

§ 681.39 Are there any limitations on the 

right to appeal to the authority head? 

(a) A defendant has no right to appear 

personally, or through a representative, 

before the authority head. 

(b) There is no right to appeal any 

interlocutory ruling. 

(c) The authority head will not 

consider any objection or evidence that 

was not raised before the ALJ unless the 

defendant demonstrates that the failure 

to object was caused by extraordinary 

circumstances. If the defendant 

demonstrates to the satisfaction of the 

authority head that extraordinary 

circumstances prevented the 

presentation of evidence at the hearing, 

and that the additional evidence is 

material, the authority head may 

remand the matter to the ALJ for 

consideration of the additional 

evidence. 

§ 681.40 How does the authority head 

dispose of an appeal? 

(a) The authority head may affirm, 

reduce, reverse, compromise, remand, 

or settle any penalty or assessment 

imposed by the ALJ in the initial 

decision or reconsideration decision. 

(b) The authority head will promptly 

serve each party to the appeal and the 

ALJ with a copy of his or her decision. 

This decision must contain a statement 

describing the right of any person, 

against whom a penalty or assessment 

has been made, to seek judicial review. 

§ 681.41 What judicial review is available? 

31 U.S.C. 3805 authorizes judicial 

review by the appropriate United States 

District Court of any final NSF decision 

imposing penalties or assessments, and 

specifies the procedures for such 

review. To obtain judicial review, a 

defendant must file a petition with the 

appropriate court in a timely manner. 

§ 681.42 Can the administrative complaint 

be settled voluntarily? 

(a) Parties may make offers of 

compromise or settlement at any time. 

Any compromise or settlement must be 

in writing. 

(b) The reviewing official has the 

exclusive authority to compromise or 

settle the case from the date on which 

the reviewing official is permitted to 

issue a complaint until the ALJ issues 

an initial decision. 

(c) The authority head has exclusive 

authority to compromise or settle the 

case from the date of the ALJ’s initial 

decision until initiation of any judicial 

review or any action to collect the 

penalties and assessments. 

(d) The Attorney General has 

exclusive authority to compromise or 

settle the case while any judicial review 

or any action to recover penalties and 

assessments is pending. 

(e) The investigating official may 

recommend settlement terms to the 

reviewing official, the authority head, or 

the Attorney General, as appropriate. 

§ 681.43 How are civil penalties and 

assessments collected? 

Section 3806 and 3808(b) of title 31, 

United States Code, authorize actions 

for collection of civil penalties and 

assessments imposed under this part 

and specify the procedures for such 

actions. 

§ 681.44 Is there a right to administrative 

offset? 

The amount of any penalty or 

assessment which has become final, or 

for which a judgment has been entered, 

or any amount agreed upon in a 

compromise or settlement, may be 

collected by administrative offset under 

31 U.S.C. 3716, except that an 

administrative offset may not be made 

under this subsection against a refund of 

an overpayment of Federal taxes, then 

or later owing by the United States to 

the defendant. 

§ 681.45 What happens to collections? 

All amounts collected pursuant to this 

part shall be deposited as miscellaneous 

receipts in the Treasury of the United 

States, except as provided in 31 U.S.C. 

3806(g). 

§ 681.46 What if the investigation indicates 

criminal misconduct? 

(a) Any investigating official may: 

(1) Refer allegations of criminal 

misconduct directly to the Department 

of Justice for prosecution or for suit 

under the False Claims Act or other civil 

proceeding; 

(2) Defer or postpone a report or 

referral to the reviewing official to avoid 

interference with a criminal 

investigation or prosecution; or 

(3) Issue subpoenas under any other 

statutory authority. 

(b) Nothing in this part limits the 

requirement that NSF employees report 

suspected violations of criminal law to 

the NSF Office of Inspector General or 

to the Attorney General. 

Dated: May 19, 2009. 

Lawrence Rudolph, 

General Counsel. 

[FR Doc. E9–12170 Filed 6–3–09; 8:45 am] 

BILLING CODE 7555–01–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 73 

[DA 09–1160; MB Docket No. 08–208; RM– 

11495] 

Television Broadcasting Services; Fort 

Wayne, IN 

AGENCY: Federal Communications 

Commission. 

ACTION: Final rule. 

SUMMARY: The Commission grants a 

petition for rulemaking filed WISE–TV 

License, LLC, licensee of WISE–TV, 

analog channel 33, and WISE–DT, DTV 

channel 19, Fort Wayne, Indiana, to 

substitute DTV channel 18 for its 

assigned post-transition DTV channel 19 

at Fort Wayne. 

DATES: This rule is effective June 4, 

2009.