I
103D CONGRESS
2D SESSION
H. R. 4399
To combat telemarketing fraud.
IN THE HOUSE OF REPRESENTATIVES
MAY 12, 1994
Mr. CARR of Michigan introduced the following bill; which was referred to the
Committee on the Judiciary
A BILL
To combat telemarketing fraud.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Senior Citizens
Against Marketing Scams Act of 1994’’.
SEC. 2. ENHANCED PENALTIES FOR TELEMARKETING
FRAUD.
(a) OFFENSE.—Part I of title 18, United States
Code, is amended—
(1) by redesignating chapter 113A as chapter
113B; and
(2) by inserting after chapter 113 the following
new chapter:
‘‘CHAPTER 113A—TELEMARKETING FRAUD
‘‘Sec.
‘‘2325. Definition.
‘‘2326. Enhanced penalties.
‘‘2327. Restitution.
‘‘§ 2325. Definition
‘‘In this chapter, ‘telemarketing’—
‘‘(1) means a plan, program, promotion, or
campaign that is conducted to induce—
‘‘(A) purchases of goods or services; or
‘‘(B) participation in a contest or sweep-
stakes,
by use of 1 or more interstate telephone calls initi-
ated either by a person who is conducting the plan,
program, promotion, or campaign or by a prospec-
tive purchaser or contest or sweepstakes participant;
but
‘‘(2) does not include the solicitation of sales
through the mailing of a catalog that—
‘‘(A) contains a written description or il-
lustration of the goods or services offered for
sale;
‘‘(B) includes the business address of the
seller;
‘‘(C) includes multiple pages of written
material or illustration; and
‘‘(D) has been issued not less frequently
than once a year,
if the person making the solicitation does not solicit
customers by telephone but only receives calls initi-
ated by customers in response to the catalog and
during those calls take orders without further solici-
tation.
‘‘§ 2326. Enhanced penalties
‘‘An offender that is convicted of an offense under
1028, 1029, 1341, 1342, 1343, or 1344 in connection with
the conduct of telemarketing—
‘‘(1) may be imprisoned for a term of 5 years
in addition to any term of imprisonment imposed
under any of those sections, respectively; and
‘‘(2) in the case of an offense under any of
those sections that—
‘‘(A) victimized a significant number of
persons over the age of 55; or
‘‘(B) targeted persons over the age of 55,
may be imprisoned for a term of 10 years in addi-
tion to any term of imprisonment imposed under any
of those sections, respectively.
‘‘§ 2327. Restitution
‘‘In sentencing an offender under section 2326, the
court shall order the offender to pay restitution to any
victims and may order the offender to pay restitution to
others who sustained losses as a result of the offender’s
fraudulent activity.’’.
(b) CLERICAL AMENDMENTS.—The table of chapters
at the beginning of part I of title 18, United States Code,
is amended by striking the item relating to chapter 113A
and inserting the following:
‘‘113A. Telemarketing fraud .................................................................... 2325
‘‘113B. Terrorism ..................................................................................... 2331’’.
SEC. 3. FORFEITURE OF FRAUD PROCEEDS.
Section 982(a) of title 18, United States Code, is
amended by adding at the end the following new para-
graph:
‘‘(6) The Court, in sentencing an offender
under section 2326, shall order that the offender
forfeit to the United States any real or personal
property constituting or derived from proceeds that
the offender obtained directly or indirectly as a
result of the offense.’’.
SEC. 4. INCREASED PENALTIES FOR FRAUD AGAINST
OLDER VICTIMS.
(a) REVIEW.—The United States Sentencing Com-
mission shall review and, if necessary, amend the sentenc-
ing guidelines to ensure that victim related adjustments
for fraud offenses against older victims over the age of
55 are adequate.
(b) REPORT.—Not later than 180 days after the date
of enactment of this Act, the Sentencing Commission shall
report to Congress the result of its review under sub-
section (a).
SEC. 5. REWARDS FOR INFORMATION LEADING TO PROS-
ECUTION AND CONVICTION.
Section 3059 of title 18, United States Code, is
amended by adding at the end the following new sub-
section:
‘‘(c)(1) In special circumstances and in the Attorney
General’s sole discretion, the Attorney General may make
a payment of up to $10,000 to a person who furnishes
information unknown to the Government relating to a pos-
sible prosecution under section 2325 which results in a
conviction.
‘‘(2) A person is not eligible for a payment under
paragraph (1) if—
‘‘(A) the person is a current or former officer
or employee of a Federal, State, or local government
agency or instrumentality who furnishes information
discovered or gathered in the course of government
employment;
‘‘(B) the person knowingly participated in the
offense;
‘‘(C) the information furnished by the person
consists of an allegation or transaction that has been
disclosed to the public—
‘‘(i) in a criminal, civil, or administrative
proceeding;
‘‘(ii) in a congressional, administrative, or
General Accounting Office report, hearing,
audit, or investigation; or
‘‘(iii) by the news media, unless the person
is the original source of the information; or
‘‘(D) when, in the judgment of the Attorney
General, it appears that a person whose illegal ac-
tivities are being prosecuted or investigated could
benefit from the award.
‘‘(3) For the purposes of paragraph (2)(C)(iii), the
term ‘original source’ means a person who has direct and
independent knowledge of the information that is fur-
nished and has voluntarily provided the information to the
Government prior to disclosure by the news media.
‘‘(4) Neither the failure of the Attorney General to
authorize a payment under paragraph (1) nor the amount
authorized shall be subject to judicial review.’’.
SEC. 6. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated for fiscal
year 1995 for the purposes of carrying out this Act and
the amendments made by this Act—
(1) $10,000,000 for the Federal Bureau of In-
vestigation to hire, equip, and train no fewer than
100 special agents and support staff to investigate
telemarketing fraud cases;
(2) $3,500,000 to hire, equip, and train no
fewer than 30 Department of Justice attorneys, as-
sistant United States Attorneys, and support staff to
prosecute telemarketing fraud cases; and
(3) $10,000,000 for the Department of Justice
to conduct, in cooperation with State and local law
enforcement agencies and senior citizen advocacy or-
ganizations, public awareness and prevention initia-
tives for senior citizens, such as seminars and
training.
SEC. 7. BROADENING APPLICATION OF MAIL FRAUD STAT-
UTE.
Section 1341 of title 18, United States Code, is
amended—
(1) by inserting ‘‘or deposits or causes to be de-
posited any matter or thing whatever to be sent or
delivered by any private or commercial interstate
carrier,’’ after ‘‘Postal Service,’’; and
(2) by inserting ‘‘or such carrier’’ after ‘‘causes
to be delivered by mail’’.
SEC. 8. FRAUD AND RELATED ACTIVITY IN CONNECTION
WITH ACCESS DEVICES.
Section 1029 of title 18, United States Code, is
amended—
(1) in subsection (a)—
(A) by striking ‘‘or’’ at the end of para-
graph (3); and
(B) by inserting after paragraph (4) the
following new paragraphs:
‘‘(5) knowingly and with intent to defraud ef-
fects transactions, with 1 or more access devices is-
sued to another person or persons, to receive pay-
ment or any other thing of value during any 1-year
period the aggregate value of which is equal to or
greater than $1,000;
‘‘(6) without the authorization of the issuer of
the access device, knowingly and with intent to de-
fraud solicits a person for the purpose of—
‘‘(A) offering an access device; or
‘‘(B) selling information regarding or an
application to obtain an access device; or
‘‘(7) without the authorization of the credit
card system member or its agent, knowingly and
with intent to defraud causes or arranges for an-
other person to present to the member or its agent,
for payment, 1 or more evidences or records of
transactions made by an access device;’’;
(2) in subsection (c)(1) by striking ‘‘(a)(2) or
(a)(3)’’ and inserting ‘‘(a) (2), (3), (5), (6), or (7)’’;
and
(3) in subsection (e)—
(A) by striking ‘‘and’’ at the end of para-
graph (5);
(B) by striking the period at the end of
paragraph (6) and inserting ‘‘; and’’; and
(C) by adding at the end the following new
paragraph:
‘‘(7) the term ‘credit card system member’
means a financial institution or other entity that is
a member of a credit card system, including an en-
tity, whether affiliated with or identical to the credit
card issuer, that is the sole member of a credit card
system.’’.
SEC. 9. INFORMATION NETWORK.
(a) HOTLINE.—The Attorney General shall establish
a national toll-free hotline for the purpose of—
(1) 
providing 
general 
information 
on
telemarketing fraud to interested persons; and
(2) gathering information related to possible
violations of this Act.
(b) ACTION ON INFORMATION GATHERED.—The At-
torney General shall work in cooperation with the Federal
Trade Commission to ensure that information gathered
through the hotline shall be acted on in an appropriate
manner.
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