Fraud Prevention and Recovery Act

Bill: 118-s-4089
Sponsor: full_name: Sen. Peters, Gary C. [D-MI]
Introduced: 2024-04-09
Policy area: Government Operations and Politics
Latest action: action_date: 2024-04-09
text: Read twice and referred to the Committee on the Judiciary.

Summaries:

tv_txt: II 118th CONGRESS 2d Session S. 4089 IN THE SENATE OF THE UNITED STATES April 9, 2024 Mr. Peters (for himself, Mr. Durbin , and Mr. Wyden ) introduced the following bill; which was read twice and referred to the Committee on the Judiciary A BILL To enhance fraud prevention, improve recovery of improper payments, and for other purposes.

1. Short title; table of contents (a) Short title This Act may be cited as the Fraud Prevention and Recovery Act . (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. TITLE I—Prosecute and recover Sec. 101. Additional funding for Inspectors General. Sec. 102. Administrative false claims. Sec. 103. DOJ Covid–19 fraud strike force teams. TITLE II—Prevent Sec. 201. Enhance Do Not Pay. Sec. 202. Use of unemployment claims data by the Inspector General of the Department of Labor. TITLE III—Safeguard Sec. 301. Identity Verification, Payment Integrity, and Victims of Identity Fraud Fund. Sec. 302. DOJ grants for victim services. I Prosecute and recover 101. Additional funding for Inspectors General (a) In general There is appropriated, out of amounts in the Treasury not otherwise appropriated, for fiscal year 2024, the following: (1) $100,000,000 for the Office of the Inspector General of the Small Business Administration, to remain available through fiscal year 2028— (A) for the long-term hiring of investigators to pursue special cases of organized fraud related to the COVID–19 pandemic; and (B) to support the interagency strike forces led by the Director for COVID–19 Fraud Enforcement in the Department of Justice. (2) $150,000,000 for the Office of the Inspector General of the Department of Labor, to remain available through fiscal year 2028— (A) for the long-term hiring of investigators to pursue special cases of organized fraud related to the COVID–19 pandemic; and (B) to support the interagency strike forces led by the Director for COVID–19 Fraud Enforcement in the Department of Justice. (b) Transfer of unobligated amounts Any unobligated balances of amounts appropriated under paragraph (1) or (2) of subsection (a) remaining after September 30, 2028, shall— (1) be transferred to the Council of the Inspectors General on Integrity and Efficiency to carry out the duties of the Council; and (2) remain available until expended. (c) Emergency designation (1) In general The amounts provided by this section are designated as an emergency requirement pursuant to section 4(g) of the Statutory Pay-As-You-Go Act of 2010 ( 2 U.S.C. 933(g) ). (2) Designation in House and Senate This section is designated as being for an emergency requirement pursuant to section 4001(a)(1) of S. Con. Res. 14 (117th Congress), the concurrent resolution on the budget for fiscal year 2022, and section 1(e) of H. Res. 1151 (117th Congress), as engrossed in the House of Representatives on June 8, 2022. 102. Administrative false claims (a) Change in short title (1) In general Subtitle B of title VI of the Omnibus Budget Reconciliation Act of 1986 ( Public Law 99–509 ; 100 Stat. 1934) is amended— (A) in the subtitle heading, by striking Program Fraud Civil Remedies and inserting Administrative False Claims ; and (B) in section 6101 ( 31 U.S.C. 3801 note), by striking Program Fraud Civil Remedies Act of 1986 and inserting Administrative False Claims Act . (2) References Any reference to the Program Fraud Civil Remedies Act of 1986 in any provision of law, regulation, map, document, record, or other paper of the United States shall be deemed a reference to the Administrative False Claims Act. (b) Reverse false claims Chapter 38 of title 31, United States Code, is amended— (1) in section 3801(a)(3), by amending subparagraph (C) to read as follows: (C) made to an authority which has the effect of concealing or improperly avoiding or decreasing an obligation to pay or transmit property, services, or money to the authority, ; and (2) in section 3802(a)(3)— (A) by striking An assessment and inserting (A) Except as provided in subparagraph (B), an assessment ; and (B) by adding at the end the following: (B) In the case of a claim described in section 3801(a)(3)(C), an assessment shall not be made under the second sentence of paragraph (1) in an amount that is more than double the value of the property, services, or money that was wrongfully withheld from the authority. . (c) Increasing dollar amount of claims Section 3803(c) of title 31, United States Code, is amended— (1) in paragraph (1), by striking $150,000 each place that term appears and inserting $1,000,000 ; and (2) by adding at the end the following: (3) The maximum amount in paragraph (1) shall be adjusted for inflation in the same manner and to the same extent as civil monetary penalties under the Federal Civil Penalties Inflation Adjustment Act ( 28 U.S.C. 2461 note). . (d) Recovery of costs Section 3806(g)(1) of title 31, United States Code, is amended to read as follows: (1) (A) Except as provided in paragraph (2)— (i) any amount collected under this chapter shall be credited first to reimburse the authority or other Federal entity that expended costs in support of the investigation or prosecution of the action, including any court or hearing costs; and (ii) amounts reimbursed under clause (i) shall— (I) be deposited in— (aa) the appropriations account of the authority or other Federal entity from which the costs described in subparagraph (A) were obligated; (bb) a similar appropriations account of the authority or other Federal entity; or (cc) if the authority or other Federal entity expended nonappropriated funds, another appropriate account; and (II) remain available until expended. (B) Any amount remaining after reimbursements described in subparagraph (A) shall be deposited as miscellaneous receipts in the Treasury of the United States. . (e) Semiannual reporting Section 405(c) of title 5, United States Code, is amended— (1) in paragraph (4), by striking and at the end; (2) by redesignating paragraph (5) as paragraph (6); and (3) by inserting after paragraph (4) the following: (5) information relating to cases under chapter 38 of title 31, including— (A) the number of reports submitted by investigating officials to reviewing officials under section 3803(a)(1) of such title; (B) actions taken in response to reports described in subparagraph (A), which shall include statistical tables showing— (i) pending cases; (ii) resolved cases; (iii) the average length of time to resolve each case; (iv) the number of final agency decisions that were appealed to a district court of the United States or a higher court; and (v) if the total number of cases in a report is greater than 2— (I) the number of cases that were settled; and (II) the total penalty or assessment amount recovered in each case, including through a settlement or compromise; and (C) instances in which the reviewing official declined to proceed on a case reported by an investigating official; and . (f) Increasing efficiency of DOJ processing Section 3803(j) of title 31, United States Code, is amended— (1) by inserting (1) before The reviewing ; and (2) by adding at the end the following: (2) A reviewing official shall notify the Attorney General in writing not later than 30 days before entering into any agreement to compromise or settle allegations of liability under section 3802 and before the date on which the reviewing official is permitted to refer allegations of liability to a presiding officer under subsection (b). . (g) Revision of definition of hearing officials (1) In general Chapter 38 of title 31, United States Code, is amended— (A) in section 3801(a)(7)— (i) in subparagraph (A), by striking or at the end; (ii) in subparagraph (B)(vii), by adding or at the end; and (iii) by adding at the end the following: (C) a member of the board of contract appeals pursuant to section 7105 of title 41, if the authority does not employ an available presiding officer under subparagraph (A); ; and (B) in section 3803(d)(2)— (i) in subparagraph (A), by striking and at the end; (ii) in subparagraph (B)— (I) by striking the presiding and inserting (i) in the case of a referral to a presiding officer described in subparagraph (A) or (B) of section 3801(a)(7), the presiding ; (II) in clause (i), as so designated, by striking the period at the end and inserting ; or ; and (III) by adding at the end the following: (ii) in the case of a referral to a presiding officer described in subparagraph (C) of section 3801(a)(7)— (I) the reviewing official shall submit a copy of the notice required by under paragraph (1) and of the response of the person receiving such notice requesting a hearing— (aa) to the board of contract appeals that has jurisdiction over matters arising from the agency of the reviewing official pursuant to section 7105(e)(1) of title 41; or (bb) if the Chair of the board of contract appeals declines to accept the referral, to any other board of contract appeals; and (II) the reviewing official shall simultaneously mail, by registered or certified mail, or shall deliver, notice to the person alleged to be liable under section 3802 that the referral has been made to an agency board of contract appeals with an explanation as to where the person may obtain the relevant rules of procedure promulgated by the board; and ; and (iii) by adding at the end the following: (C) in the case of a hearing conducted by a presiding officer described in subparagraph (C) of section 3801(a)(7)— (i) the presiding officer shall conduct the hearing according to the rules and procedures promulgated by the board of contract appeals; and (ii) the hearing shall not be subject to the provisions in subsection (g)(2), (h), or (i). . (2) Agency boards Section 7105(e) of title 41, United States Code, is amended— (A) in paragraph (1), by adding at the end the following: (E) Administrative False Claims Act (i) In general The boards described in subparagraphs (B), (C), and (D) shall have jurisdiction to hear any case referred to a board of contract appeals under section 3803(d) of title 31. (ii) Declining referral If the Chair of a board described in subparagraph (B), (C), or (D) determines that accepting a case under clause (i) would prevent adequate consideration of other cases being handled by the board, the Chair may decline to accept the referral. ; and (B) in paragraph (2), by inserting or, in the event that a case is filed under chapter 38 of title 31, any relief that would be available to a litigant under that chapter before the period at the end. (3) Regulations Not later than 180 days after the date of enactment of this Act, each authority head, as defined in section 3801 of title 31, United States Code, and each board of contract appeals of a board described in subparagraph (B), (C), or (D) of section 7105(e) of title 41, United States Code, shall amend procedures regarding proceedings as necessary to implement the amendments made by this subsection. (h) Revision of limitations Section 3808 of title 31, United States Code, is amended by striking subsection (a) and inserting the following: (a) A notice to the person alleged to be liable with respect to a claim or statement shall be mailed or delivered in accordance with section 3803(d)(1) not later than the later of— (1) 6 years after the date on which the violation of section 3802 is committed; or (2) 3 years after the date on which facts material to the action are known or reasonably should have been known by the authority head, but in no event more than 10 years after the date on which the violation is committed. . (i) Definitions Section 3801 of title 31, United States Code, is amended— (1) in subsection (a)— (A) in paragraph (8), by striking and at the end; (B) in paragraph (9), by striking the period at the end and inserting a semicolon; and (C) by adding at the end the following: (10) material has the meaning given the term in section 3729(b) of this title; and (11) obligation has the meaning given the term in section 3729(b) of this title. ; and (2) by adding at the end the following: (d) For purposes of subsection (a)(10), materiality shall be determined in the same manner as under section 3729 of this title. . (j) Promulgation of regulations Not later than 180 days after the date of enactment of this Act, each authority head, as defined in section 3801 of title 31, United States Code, shall— (1) promulgate regulations and procedures to carry out this section and the amendments made by this section; and (2) review and update existing regulations and procedures of the authority to ensure compliance with this section and the amendments made by this section. 103. DOJ Covid–19 fraud strike force teams (a) In general There is appropriated, out of amounts in the Treasury not otherwise appropriated, $300,000,000, to remain available until expended, to the Attorney General to— (1) prosecute the full range of COVID–19 pandemic relief benefit fraud; (2) bring the most egregious and sophisticated offenders of COVID–19 benefit fraud to justice; and (3) recover stolen COVID–19 benefit funds for the people of the United States. (b) Use of funds The Attorney General may use amounts appropriated under subsection (a) to support— (1) COVID–19 fraud enforcement strike forces— (A) comprised of prosecutors, analysts, law enforcement officers, and support staff; and (B) tasked with prosecuting criminal networks and individuals who defrauded COVID–19 pandemic relief benefit programs, including— (i) the paycheck protection program established under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) ) and economic injury disaster loans made under section 7(b)(2) of the Small Business Act ( 15 U.S.C. 636(b)(2) ) related to COVID–19; and (ii) the unemployment insurance benefit programs authorized during the COVID–19 pandemic; (2) data scientists and analysts supporting COVID–19 pandemic relief fraud investigations and the recovery of fraudulently obtained pandemic relief funds; and (3) prosecutors and support staff focused on— (A) investigating and prosecuting COVID–19 pandemic fraud; and (B) recovering fraudulently obtained COVID–19 pandemic relief funds. (c) Transfers The Attorney General may transfer amounts appropriated under subsection (a) to Federal law enforcement agencies for the purposes described in subsections (a) and (b), including— (1) the Fraud Section of the Criminal Division of the Department of Justice; (2) relevant offices of inspector general; (3) the Federal Bureau of Investigation; (4) Homeland Security Investigations; (5) the United States Secret Service; (6) the United States Postal Inspection Service; (7) the criminal investigation unit of the Internal Revenue Service; and (8) the Organized Crime and Drug Enforcement Task Forces. (d) Emergency designation (1) In general The amounts provided by this section are designated as an emergency requirement pursuant to section 4(g) of the Statutory Pay-As-You-Go Act of 2010 ( 2 U.S.C. 933(g) ). (2) Designation in house and senate This section is designated as being for an emergency requirement pursuant to section 4001(a)(1) of S. Con. Res. 14 (117th Congress), the concurrent resolution on the budget for fiscal year 2022, and section 1(e) of H. Res. 1151 (117th Congress), as engrossed in the House of Representatives on June 8, 2022. II Prevent 201. Enhance Do Not Pay (a) Bank account verification and precertification Section 3325 of title 31, United States Code, is amended by adding at the end the following: (e) (1) Before certifying a voucher to a disbursing official, the head of an executive agency or an officer or employee of an executive agency referred to in subsection (a)(1)(B), as applicable, shall take necessary actions to accurately disburse payments to the recipients of such payments, including by— (A) verifying the accuracy of the bank account information to which a payment is to be disbursed; and (B) comparing the bank account of the proposed recipient to other payment records available to the agency. (2) The Secretary of the Treasury and, with the approval of the Secretary of the Treasury, the head of the executive agency having jurisdiction over a disbursing official, may issue guidance to carry out this subsection. . (b) Do not pay initiative access to the national directory of new hires Section 453(j) of the Social Security Act ( 42 U.S.C. 653(j) ) is amended by adding at the end the following: (12) Information to assist in the prevention of improper payments (A) In general The Secretary of the Treasury shall have access to the information in the National Directory of New Hires for the purpose of assisting entities in identifying, preventing, and recovering improper payments. (B) Redisclosure For the purpose of identifying, preventing, and recovering improper payments, the head of the agency operating the Do Not Pay Working System may redisclose information in the National Directory of New Hires to— (i) its agents and contractors; (ii) Federal and non-Federal agencies authorized to receive information in the National Directory of New Hires directly from the Secretary; and (iii) such additional persons and entities as agreed to by the Secretary and the head of the agency operating the Do Not Pay Working System. (C) Reimbursement of hhs costs The head of the agency operating the Do Not Pay Working System shall reimburse the Secretary, in accordance with subsection (k)(3), for the costs incurred by the Secretary in furnishing the information transmitted under this paragraph. . (c) Access to information covered by FCRA (1) Definitions Section 603(k)(1) of the Fair Credit Reporting Act ( 15 U.S.C. 1681a(k)(1) ) is amended— (A) in subparagraph (A), by striking and at the end; (B) in subparagraph (B), by striking the period at the end and inserting ; and ; and (C) by adding at the end the following: (C) does not include— (i) any change to a Federal disbursement, including the termination of such disbursement, that is— (I) based on a consumer report; and (II) made to improve the accuracy of the disbursement; or (ii) any action taken by an authorized user of the Working System of the Do Not Pay Initiative authorized by section 3354 of title 31, United States Code, in connection with the disbursement of a payment, as defined in section 3351 of that title, that is based on a consumer report. . (2) Permissible uses of consumer reports Section 604(a) of the Fair Credit Reporting Act ( 15 U.S.C. 1681b(a) ) is amended by adding at the end the following: (7) To the Secretary of the Treasury for the purpose of assisting Federal and non-Federal entities identify, prevent, and recover improper payments, including redisclosing information in a consumer report to— (A) agents and contractors of the Department of the Treasury; and (B) Federal and non-Federal entities authorized to receive such information directly from the Secretary. . 202. Use of unemployment claims data by the Inspector General of the Department of Labor (a) In general Subject to subsection (b), the Inspector General of the Department of Labor (in this section referred to as the Inspector General ) shall, for the purpose of conducting audits, investigations, and other oversight activities authorized under chapter 4 of part I of title 5, United States Code, relating to unemployment compensation programs, be allowed to access data submitted to each of the following systems: (1) The system designated by the Secretary of Labor for the electronic transmission of requests for information relating to interstate claims for unemployment compensation. (2) The system designated by the Secretary of Labor for cross-matching claimants of unemployment compensation under State law against databases to prevent and detect fraud and improper payments. (b) Requirements (1) Use The Inspector General may only use unemployment compensation claim and wage data for the purpose of conducting audits, investigations, and other oversight activities authorized under chapter 4 of part I of title 5, United States Code, for unemployment compensation programs. (2) Redisclosure The Inspector General may only redisclose unemployment compensation claim and wage data to Federal, State, or local government officials. Any such redisclosure may only be made for purposes of auditing, investigating, or conducting other oversight activities authorized under chapter 4 of part I of title 5, United States Code, for unemployment compensation programs. The Inspector General may not redisclose unemployment compensation claim and wage data to nongovernment officials or foreign officials. (3) Cybersecurity and privacy The Inspector General shall appropriately and securely store, and establish data access, entry, and deletion requirements for, unemployment compensation claim and wage data following best practices identified in consultation with the Director of the National Institute of Standards and Technology and the Director of the Cybersecurity and Infrastructure Security Agency. (4) Documentation The Inspector General shall appropriately document the reasons for accessing unemployment compensation claim and wage data, including the reasons for accessing the data of an individual claimant. (c) Effective date The provisions of subsections (a) and (b) shall apply beginning on the date that is one year after the date of enactment of this section. (d) Report to Congress and the Secretary Not later than 180 days after the date of enactment of this section, the Inspector General shall submit to the appropriate committees of jurisdiction of the Senate and the House of Representatives and to the Secretary of Labor a report on the Inspector General’s plan to use, redisclose, store, and delete unemployment compensation claim and wage data. Such plan shall incorporate the requirements under paragraphs (1), (2), (3), and (4) of subsection (b). III Safeguard 301. Identity Verification, Payment Integrity, and Victims of Identity Fraud Fund (a) Definitions (1) Administrator The term Administrator means the Administrator of General Services. (2) Director The term Director means the Director of the Office of Management and Budget. (3) Federal agency The term Federal agency has the meaning given the term agency in section 306(f) of title 5, United States Code. (4) Fund The term Fund means the Identity Verification, Payment Integrity, and Victims of Identity Fraud Fund established under subsection (b)(1). (b) Establishment (1) In general There is established within the Treasury of the United States a fund, which shall be known as the Identity Verification, Payment Integrity, and Victims of Identity Fraud Fund . (2) Administration The Director and the Administrator shall jointly administer the Fund. (c) Use of funds (1) Mandatory transfer Upon the date of enactment of this Act, the Director and the Administrator shall jointly transfer from the Fund— (A) not less than $75,000,000 to the Commissioner of Social Security to support— (i) the development of a Social Security number verification service for use by Federal agencies— (I) that compares identity information of an individual, including the name, date of birth, and Social Security number of the individual, provided by a Federal agency against the identity information of the individual maintained by the Social Security Administration; (II) that, based on the comparison performed under subclause (I), will provide a Federal agency with a privacy-preserving response of Match or No match to confirm or not confirm the validity of the identity information provided by the Federal agency described in subclause (I); (III) the development of which may not begin until the date on which the Commissioner of Social Security receives the full amount of the transfer required under this subparagraph; and (IV) subject to safeguards determined necessary by the Commissioner of Social Security, the full cost for the use of which the heads of Federal agencies shall reimburse the Social Security Administration, including for the costs of administration and associated ongoing maintenance; and (ii) the implementation of the Social Security number verification service developed under clause (i) by Federal agencies; (B) not less than $25,000,000 to the Office of Payment Integrity of the Department of the Treasury to support the development and enhancement of governmentwide solutions and data sharing to prevent fraud and enhance payment integrity in Federal programs and federally funded programs administered by States; (C) not less than $25,000,000 to the Administrator to support— (i) the development by the Secretary of the Treasury, in coordination with the Director and the Administrator, of a pilot program for an identity fraud early warning system; and (ii) the implementation of the pilot program described in clause (i) by Federal agencies and State, local, Tribal, and territorial governments; and (D) not less than $200,000,000 to the Federal Trade Commission to support— (i) the enhancement of IdentityTheft.gov to offer a single platform that combines services from across Federal agencies for victims of identity fraud; and (ii) the implementation of IdentifyTheft.gov by Federal agencies and State, local, Tribal, and territorial governments. (2) Other amounts The Director and the Administrator shall make the amounts remaining in the Fund after the completion of the transfers required under paragraph (2) available to the heads of Federal agencies to— (A) develop, deploy, and support the adoption by Federal agencies and State, local, Tribal, and territorial governments of capabilities to reduce identity fraud; (B) improve eligibility verification processes; (C) improve the integrity of Federal programs and State, local, Tribal and territorial government programs; (D) improve the secure, reliable, and equitable digital access to services of the Federal Government and State, local, Tribal, and territorial governments; (E) combat improper payments by the Federal Government; (F) expand services for victims of identity fraud, including by— (i) providing individualized training and program development assistance to legal services organizations, nonprofit organizations, and Federal agencies and State, local, Tribal, and territorial governments that directly assist victims of identity fraud in need of remediation; (ii) expanding data protection and other enforcement efforts relating to identity fraud; (iii) coordinating with Federal agencies and State, local, Tribal, and territorial governments with respect to identity fraud prevention and remediation services; and (iv) enhancing fraud and identity fraud services and information, such as reporting websites, information technology systems, and outreach to the public, including collaboration with consumer service organizations and Federal agencies and State, local, Tribal, and territorial governments; (G) support the operations of the Fund; and (H) in support of the goals of the Fund, support investments in the development of foundational privacy-enhancing technology, including secure multiparty computation and other privacy-preserving data sharing capabilities, for use by Federal agencies and State, local, Tribal, and territorial governments. (d) Appropriations (1) In general There is appropriated, out of amounts in the Treasury not otherwise appropriated, $600,000,000 to the Fund for fiscal year 2024. (2) Availability (A) In general Subject to subparagraph (B), amounts appropriated under paragraph (1) shall remain available until September 30, 2028. (B) Exception Amounts appropriated under paragraph (1) that are transferred in accordance with subsection (c)(1)(A) shall remain available until expended. (e) Emergency designation (1) In general The amounts provided by this section are designated as an emergency requirement pursuant to section 4(g) of the Statutory Pay-As-You-Go Act of 2010 ( 2 U.S.C. 933(g) ). (2) Designation in house and senate This section is designated as being for an emergency requirement pursuant to section 4001(a)(1) of S. Con. Res. 14 (117th Congress), the concurrent resolution on the budget for fiscal year 2022, and section 1(e) of H. Res. 1151 (117th Congress), as engrossed in the House of Representatives on June 8, 2022. 302. DOJ grants for victim services (a) In general (1) Appropriation Out of amounts in the Treasury not otherwise appropriated, there are appropriated to the Director of the Office for Victims of Crime $175,000,000, to remain available until expended, to award discretionary grants under the Victims of Crime Act of 1984 ( 34 U.S.C. 20101 et seq. ). (2) Use The Director of the Office for Victims of Crime shall use the amounts appropriated under paragraph (1) to award grants to assist victims of identity theft. (b) Emergency designation (1) In general The amounts provided by this section are designated as an emergency requirement pursuant to section 4(g) of the Statutory Pay-As-You-Go Act of 2010 ( 2 U.S.C. 933(g) ). (2) Designation in house and senate This section is designated as being for an emergency requirement pursuant to section 4001(a)(1) of S. Con. Res. 14 (117th Congress), the concurrent resolution on the budget for fiscal year 2022, and section 1(e) of H. Res. 1151 (117th Congress), as engrossed in the House of Representatives on June 8, 2022.