Emergency and Disaster Assistance Fraud Penalty Enhancement Act of 2005

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4356) to amend title 18, United States Code, with respect to fraud in connection with major disaster or emergency funds.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 4356 currently under consideration.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in support of H.R. 4356, the Emergency and Disaster Assistance Fraud Penalty Enhancement Act of 2005. Since Hurricanes Katrina and Rita last year, Congress has provided more than $68 billion in relief to the region, including funding for human services like unemployment, housing assistance, and crisis counseling. In addition, charities like the Red Cross and the Salvation Army have contributed more than $5 billion to relief efforts.

With such vast resources put into the pipeline so quickly, fraudsters and scam artists went into high gear in an effort to take advantage of these government programs as well as the generosity of the American people contributing to nongovernment organizations.

Earlier this month, the United States Government Accountability Office testified that the Federal Emergency Management Agency paid an estimated $600 million to $1.4 billion in improper and potentially fraudulent disaster assistance claims in the aftermath of Hurricanes Katrina and Rita.

GAO also reported examples of the types of disaster assistance crimes typically perpetrated on the American taxpayer. In one common scam, FEMA provided millions of dollars of rental assistance to cover a thousand individuals who used the names and Social Security numbers of prison inmates to obtain benefits.

In another instance, 750 debit cards, containing more than $1.5 million in disaster assistance funds, were provided to individuals who were not actual victims of the storms. GAO determined that some of these funds were used to procure things like diamond jewelry, Caribbean vacations, professional football tickets, and divorce lawyer services. In another case, FEMA paid $139,000 in fraudulent claims so that an individual who used 13 different Social Security numbers could obtain benefits.

To its credit, the Department of Justice has responded quickly to the problem. In September 2005, the Attorney General established a Hurricane Katrina Fraud Task Force, which includes DOJ, Homeland Security, Treasury, the FBI, Federal Trade Commission, and other Federal partners, as well as representatives of State and local law enforcement. Since its formation, 24 United States attorneys have charged 261 people in 218 cases with various criminal activities, and have obtained so far 44 guilty pleas or convictions.

Despite these efforts, it is clear the current criminal penalties are insufficient to deter disaster fraud. In March 2006 alone, DOJ announced 17 new indictments and four guilty pleas for Katrina- and Rita-related disaster fraud. In May of this year, the United States Attorney for the Middle District of Florida charged 26 people with similar acts of fraud.

To enhance Federal law enforcement's ability to combat and deter disaster fraud, this bill contains the following substantive provisions: first, the bill creates a new Federal crime to prohibit fraud in connection with any emergency or disaster relief, including Federal assistance or private charitable contributions, as long as the benefit was authorized or paid in interstate commerce, transported through the mail, or is anything of value to the United States. The penalty for engaging in such fraud is a fine or imprisonment of up to 30 years.

Second, the bill amends the Federal mail and wire fraud statute to add emergency or disaster benefits fraud to the 30-year maximum penalties in those statutes. Currently, the 30-year maximum is reserved only for cases involving fraud against financial institutions.

Finally, the bill directs the United States Sentencing Commission to review existing penalties for disaster assistance fraud, amend the sentencing guidelines as necessary, and report back to Judiciary Committees of Congress.

Mr. Speaker, I urge my colleagues to support this important antifraud and protaxpayer legislation.

I reserve the balance of my time.

Mr. Speaker, I yield 3 minutes to the gentleman from Texas (Mr. McCaul).

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I yield myself such time as I may consume, and I rise in support of H.R. 4356, the Emergency and Disaster Assistance Fraud Penalty Enhancement Act of 2005.

In the aftermath of Hurricane Katrina, we were all appalled to learn of the rampant schemes of fraudulent benefiting of government funding intended for victims of the disasters. While these crimes are now being prosecuted under existing fraud laws, I believe that the crime warrants specific and enhanced emphasis to put on notice those who would take criminal advantage of the government's need to focus on speed and comprehensive assistance in times of disasters and emergencies. This bill would establish the specific crime of fraud in connection with major disaster or emergency benefits and increases the penalties currently available for such acts.

Recognizing the particular egregiousness of fraud claims surrounding emergencies like Hurricane Katrina, the bill also directs the U.S. Sentencing Commission to increase penalties under the sentencing guidelines for those individuals who would fraudulently seek to benefit from funding intended for victims of natural disasters and Presidentially declared emergencies.

While I generally do not support specific directives to the Sentencing Commission to increase penalties for crimes, I believe this particular category of crime is egregious enough to warrant more punishment than fraud in general, with appropriate considerations for mitigating and aggravating circumstances.

Mr. Speaker, I am in favor, as we all are, of seeing increased benefits being made available for victims of disasters such as Hurricane Katrina. Many have lost everything and are now without a permanent home or compensation for their losses. Many are still not able to return to the area. Many still need ongoing assistance.

We can all agree that the limited disaster and emergency benefits that are made available to victims should only go to legitimate victims, not to scam artists or cheats who recognize that humanitarian concerns in the middle of a disaster require a waiver of traditional checks and balances in favor of speed and getting the relief to the suffering victims. Those who cheat and scheme at these times deserve more punishment.

Accordingly, I am supportive of this legislation, and I urge my colleagues to support the bill.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield back the balance of my time.

I thank the gentleman for his leadership on this, and, Mr. Speaker, I rise today in support of this important piece of legislation that will work to deter fraud in the wake of disasters like Hurricanes Katrina and Rita.

Disaster assistance fraud is something I have been fighting for quite some time now. I recently held a hearing in the Homeland Security Investigation Subcommittee to uncover the findings of a 6-month fraud investigation by the GAO. What they found was nothing short of shocking.

The GAO testified before my subcommittee that FEMA disaster assistance after Hurricanes Katrina and Rita was applied for and received by criminals who used deceased individuals' identities, and even a cemetery as an address to receive the emergency funding. Federal investigators also testified that prisoners in jail before the hurricanes were able to receive almost $11 million from their jail cells by fraudulently applying for the FEMA disaster assistance funds.

The total price tag for the fraud committed after Hurricanes Katrina and Rita is not yet known; but GAO investigators have testified that it will, at the very least, be in the billions of dollars. This is an insult to the victims of these natural disasters and an insult to the ultimate victim, the American taxpayer.

Through this investigation, we have referred over 7,000 fraud cases to the Department of Justice Task Force for prosecution, and this legislation will ensure that they receive the harshest penalty for their actions.

It saddens me to think about the gulf coast families that could have used this money to rebuild their homes and their lives. We need to make sure that these disaster victims and the American taxpayer are never robbed like this again. This legislation is a great first step in making that happen, and I strongly urge my colleagues to vote for the Emergency and Disaster Assistance Fraud Penalty Enhancement Act.