SEC. 1. SHORT TITLE. The Act may be cited as the Seniors Safety Act of 2002.

SEC. 2. FINDINGS AND PURPOSES. The Act enumerates 14 findings on the incidence of crimes against seniors, the large percentages of seniors who can expect to spend time in nursing homes, the amount of Federal money spent on nursing home care and the estimated losses due to fraud and abuse in the health care industry.

The purposes of the Act are to combat abuse in nursing homes, enhance safeguards for pension plans and health benefit programs, preventing and deterring criminal activity that results in economic and physical harm to seniors, and ensuring appropriate restitution.

SEC. 3. DEFINITIONS. Definitions are provided for the following terms: (1)"Crime" is defined as any criminal offense under Federal or State law; (2)"Nursing home" is defined as any institution or residential care facility defined as such for licensing purposes under state law, or the federal equivalent; and (3) "Senior" is defined as an individual who is older than 55.

(a) DIRECTIVE TO THE UNITED STATES SENTENCING COMMISSION. The U.S. Sentencing Commission is directed to review and, if appropriate, amend the sentencing guidelines to include age as one of the criteria for determining whether a sentencing enhancement is appropriate.

(b) REQUIREMENTS. During its review, the Sentencing Commission shall: ensure that the guidelines adequately reflect the economic and physical harms associated with criminal activity targeted at seniors; consider providing increased penalties for offenses where the victim was a senior; consult with seniors, victims, judiciary, and law enforcement representatives; assure reasonable consistency with other relevant directives and guidelines; account for circumstances which may justify exceptions, including any circumstances already warranting sentencing enhancements; make any necessary conforming changes; and assure that the guidelines adequately meet the purposes of sentencing.

(c) REPORT. The sentencing commission shall report the results of the review required under (a) and include any recommendations for retention or modification of the current penalty levels by December 31, 2002.

(a) DIRECTIVE TO THE UNITED STATES SENTENCING COMMISSION. The U.S. Sentencing Commission is directed to review and, if appropriate, amend the sentencing guidelines applicable to health care fraud offenses.

(b) REQUIREMENTS. During its review, the Sentencing Commission shall: ensure that the guidelines reflect the serious harms associated with health care fraud and the need for law enforcement to prevent such fraud; consider enhanced penalties for persons convicted of health care fraud; consult with representatives of industry, judiciary, law enforcement, and victim groups; account for mitigating circumstances; assure reasonable consistency with other relevant directives and guidelines; make any necessary conforming changes; and assure that the guidelines adequately meet the purposes of sentencing.

(c) REPORT. The Sentencing Commission shall report the results of the review required under (a) and include any recommendations for retention or modification of the current penalty levels for health care fraud offenses, by December 31, 2002.

This section increases the penalties under the mail fraud statute, 18 U.S.C. § 1341, and the wire fraud statute, 18 U.S.C. § 1343, for fraudulent schemes that result in serious injury or death. Existing law provides such an enhancement for a narrow class of health care fraud schemes (see 18 U.S.C. 1347). This provision would extend this penalty enhancement to other forms of fraud under the mail and wire fraud statutes that result in death or serious injury. The maximum penalty if serious bodily harm occurred would be up to twenty years; if a death occurred, the maximum penalty would be a life sentence.

(a) IN GENERAL. This section would add new section 1348 to title 18, United States Code.

§1348: Fraud in Relation to Retirement Arrangements.

(a) This section defines retirement arrangements and provides an exception for plans established by the Employee Retirement Income Security Act (ERISA).

(b) This section punishes, with up to ten years’ imprisonment, the act of defrauding retirement arrangements, or obtaining by means of false or fraudulent pretenses money or property of any retirement arrangement. Retirement arrangements would include employee pension benefit plans under the Employee Retirement Income Security Act (ERISA), qualified retirement plans under section 4974(c) of the Internal Revenue Code (IRC), medical savings accounts under section 220 of the IRC, and funds established within the Thrift Savings Fund. This provision is modeled on existing statutes punishing bank fraud (see 18 U.S.C. § 1344) and health care fraud (see 18 U.S.C. § 1347). Any government plan defined under section 3(32) of title I of the ERISA, except funds established by the Federal Retirement Thrift Investment Board, is exempt from this section.

(c) The Attorney General is given authority to investigate offenses under the new section, but this authority expressly does not preclude other appropriate Federal agencies, including the Secretary of Labor, from investigating violations of ERISA.

(b) CONFORMING AMENDMENT. The table of sections for chapter 63 of title 18 United States Code, is modified to list new section "1348. Fraud in relation to retirement arrangements."

(a) IN GENERAL. This section would authorize the Attorney General to bring a civil action for a violation, or conspiracy to violate, new section 18 U.S.C. § 1348, relating to retirement fraud. Proof of such a violation established by a preponderance of the evidence would subject the violator to a civil penalty of the greater of the amount of pecuniary gain to the offender, the pecuniary loss to the victim, or up to $50,000 in the case of an individual, or $100,000 for an organization. Imposition of this civil penalty has no effect on other possible remedies.

(b) EXCEPTION. No civil penalties would be imposed for conduct involving an employee pension plan subject to penalties under ERISA, 29 U.S.C. § 1132.

(c) DETERMINATION OF PENALTY AMOUNT. In determining the amount of the penalty, the court is authorized to consider the effect of the penalty on the violator’s ability to restore all losses to the victims and to pay other important tax or criminal penalties.

This section would amend section 1954 of title 18, United States Code, by changing the title to "Bribery and graft in connection with employee benefit plans," and increasing the maximum penalty for bribery and graft in regard to the operation of an employee benefit plan from 3 to 5 years imprisonment. This section also broadens existing law under section 1954 to cover corrupt attempts to give or accept bribery or graft payments, and to proscribe bribery or graft payments to persons exercising de facto influence or control over employee benefit plans. Finally, this amendment clarifies that a violation under section 1954 requires a showing of corrupt intent to influence the actions of the recipient of the bribe or graft.

TITLE II - PREVENTING TELEMARKETING CRIME.

(a) CENTRALIZED SERVICE. This section directs the Commissioner of the Federal Trade Commission to establish a "Better Business"-style hotline to serve as a central information clearinghouse for victims of telemarketing fraud within one year. As part of this service, the FTC is required to establish procedures for logging in complaints of telemarketing fraud victims, providing information on telemarketing fraud schemes, referring complaints to appropriate law enforcement officials, and providing complaint or prior conviction information about specific companies.

(b) CREATION OF FRAUD CONVICTION DATABASE. The Attorney General is directed to establish a database of telemarketing fraud convictions secured against corporations or companies, for the use as described in (a).

(c) AUTHORIZATION OF APPROPRIATIONS. Authorization is provided for such sums as are necessary to carry out the section.

(a) EXPANSION OF SCOPE OF TELEMARKETING FRAUD SUBJECT TO ENHANCED CRIMINAL PENALTIES. Section 2325 of title 18, United States Code, is amended by replacing the term "telephone calls" with "wire communication utilizing a telephone service" to clarify that telemarketing fraud schemes executed using cellular telephone services are subject to the enhanced penalties for such fraud under 18 U.S.C. § 2326.

(b) BLOCKING OR TERMINATION OF TELEPHONE SERVICE ASSOCIATED WITH TELEMARKETING FRAUD. This section adds new section 2328 to title 18, United States Code, to authorize the termination of telephone service used to carry on telemarketing fraud, and is similar to the legal authority provided under 18 U.S.C. § 1084(d), regarding termination of telephone service used to engage in illegal gambling. The new section 2328 requires telephone companies, upon notification in writing from the Department of Justice that a particular phone number is being used to engage in fraudulent telemarketing or other fraudulent conduct, and after notice to the customer, to terminate the subscriber’s telephone service. The common carrier is exempt from civil and criminal penalties for any actions taken in compliance with any notice received from the Justice Department under this section. Persons affected by termination may seek an appropriate determination in Federal court that the service should not be discontinued or removed, and the court may direct the Department of Justice to present evidence supporting the notification of termination. Definitions are provided for "wire communication facility" and "reasonable notice to the subscriber."

TITLE III - PREVENTING HEALTH CARE FRAUD

(a) IN GENERAL. This section extends the provisions of 18 U.S.C. § 1345, which authorizes injunctions against frauds, to authorize the Attorney General to take immediate action to halt illegal health care fraud kickback schemes under the Social Security Act (42 U.S.C. § 1320a-7b). Under existing law, (18 U.S.C. § 1345 (a)(1)(C)), Federal prosecutors are able to obtain injunctive relief in connection with a wide variety of Federal health care offenses. This authority has proven to be extremely valuable in putting a halt to fraudulent behavior, but such relief is not available in connection with kickback offenses under section 1128B of the Social Security Act (42 U.S.C. §1320a-7b). Because of the large amounts of money involved in these kinds of cases, the Attorney General should have the authority to enjoin kickback schemes while they are in progress.

(b) CIVIL ACTIONS. This section would amend 42 U.S.C. § 1320a-7b by adding a new subsection (g) authorizing the Attorney General to seek a civil penalty of up to $50,000 per violation, or three times the remuneration, whichever is greater, for each offense under this section with respect to a Federal health care program. This penalty is in addition to other criminal and civil penalties. The procedures are governed by the Federal Rules of Civil Procedure and 31 U.S.C. 3731. If one or more of the purposes of the remuneration is unlawful, a violation exists and damages shall be the full amount of the remuneration.

This section would amend section 3486 of title 18, United States Code, to authorize the Attorney General or her designee to issue administrative subpoenas -- called "authorized investigative demands" -- to investigate civil health care fraud cases. Under section 248 of the Health Insurance Portability and Accountability Act of 1996 (Pub. L. 104-191), the Attorney General or her designee is authorized to issue an administrative subpoena in connection with an investigation relating to a Federal health care offense, defined under 18 U.S.C. § 24 to include only criminal offenses. In civil cases, however, the Department’s attorneys must rely upon subpoenas issued by the office of the Inspector General of the Department of Health and Human Services or upon civil investigative demands. To facilitate the Department of Justice’s ability to investigate civil health care fraud cases in an effective and efficient manner, this provision allows the Attorney General or her designee to issue an administrative subpoena in connection with any health care fraud case, criminal or civil.

This section also provides privacy safeguards for personally identifiable health information that may be obtained in response to an administrative subpoena and divulged in the course of a federal investigation. Information provided in response to a grand jury subpoena is generally required, under Rule 6(e) of the Federal Rules of Criminal Procedure, to be kept secret. By contrast, this secrecy rule would not apply to information obtained in response to an administrative subpoena. This section therefore protects the privacy and confidentiality of personally identifiable health information by limiting its disclosure to a federal prosecutor in the performance of official duties, to other government personnel where necessary to assist in the enforcement of Federal criminal law, or when directed by a court. The section requires that such information be destroyed within 90 days from production, unless otherwise ordered by a court. "Personally identifiable health information" is defined to mean any information relating to the physical or mental condition of an individual, the provision of, or payments for, health care, that either identifies an individual or with respect to which there is a reasonable basis to believe that the information can be used to identify an individual.

This section removes the anti-fraud exemption for the Federal Employee Health Benefits (FEHB) Act currently contained in section 1128B(f)(1) of the Social Security Act, thereby extending anti-fraud and anti-kickback safeguards applicable to the Medicare and Medicaid program to the FEHB. This would allow the Attorney General to use the same civil enforcement tools to fight fraud perpetrated against the FEHB program as are available to other Federal health care programs, and to recover civil penalties against persons or entities engaged in illegal kickback schemes under the anti-kickback provisions of the Social Security Act (42 U.S.C. §1320a-7b). Removal of this exemption would allow enhanced penalties for repeat offenders, additional anti-kickback enforcement, enhanced civil monetary penalties, and full participation in the Health Care Fraud and Abuse Control Account. Civil penalties are particularly important in health care fraud, since the complex business arrangements often employed in connection with kickback schemes pose difficulties in proving the necessary scienter needed to sustain a criminal prosecution.

This section would amend section 3322 of title 18, United States Code, to authorize federal prosecutors to seek a court order to share grand jury information regarding health care offenses, as defined in 18 U.S.C. § 24, with other federal prosecutors for use in civil proceedings or investigations relating to fraud or false claims in connection with any Federal health care program. Under current law, grand jury information may not be shared for use by government attorneys in civil investigations except "when so directed by a court preliminarily to or in connection with a judicial proceeding," and may require a hearing at which "other persons as the court may direct" are given a "reasonable opportunity to appear and be heard." F.R.Cr.P. 6(e)(3)(C)( i) & (D). The important policy reasons for protecting the secrecy of grand juries and allowing only narrow access to grand jury proceedings by Federal civil prosecutors are fully set forth in United States v. Sells Engineering, Inc., 463 U.S. 418 (1983).

Mindful of the reasons for grand jury secrecy, the proposed amendment would permit grand jury information regarding health care offenses to be shared with Federal civil prosecutors, only after ex parte court review and a finding that the information would assist in enforcement of federal laws or regulations. Simplifying the sharing of grand jury information by avoiding the need for a judicial proceeding or the possibility of a hearing, would avoid subverting the grand jury secrecy rule while enhancing the effectiveness of the Department of Justice’s overall health care anti-fraud effort. In particular, by facilitating the sharing of information between criminal investigators and civil prosecutors, this proposal would enable the Justice Department to proceed more quickly and efficiently to recover losses to federal health care programs and to prevent wrongdoers from dissipating illegally obtained assets before the Government can take action to recover the government’s losses. Privacy safeguards for personally identifiable health care information proposed in section 401 of this Act would also apply to information shared under this new provision.

This section amends section 3733 of title 31, United States Code, to permit the Attorney General to delegate authority to issue civil investigative demands to the Deputy Attorney General or an Assistant Attorney General. The Deputy Attorney General and Assistant Attorneys General already are authorized under current law to cause such discovery demands to be served.

In addition, section 3733 is amended to permit a person who initiated an investigation or proceeding under 31 U.S.C. § 3730, or such person’s counsel (i.e., whistle-blowers who have brought a qui tam suit under the False Claims Act) to seek permission from a district court to obtain information disclosed to the Justice Department in response to civil investigative demands. Whistle blowers who relay information for false claims actions to the government are often able to provide valuable assistance to the government in pursuing false claims law investigations and actions. This assistance may be further enhanced if they have an opportunity to review information obtained by the Justice Department in connection with the investigation.

This title may be cited as the "Nursing Home Resident Protection Act of 2002."

(a) PROTECTION OF RESIDENTS IN NURSING HOMES AND OTHER RESIDENTIAL HEALTH CARE FACILITIES. This section would add new section 1349 to title 18, United States Code, to punish persons who engage in a pattern of willful violations of Federal laws, regulations, rules, or State laws governing the health, safety, or care of individuals residing in residential health care facilities, and allows the Attorney General to bring civil penalties against those entities It also provides additional "whistle blower" protection by allowing a person who is retaliated against for reporting nursing home conditions to bring a civil action for damages, attorney’s fees, and other costs.

(b) AUTHORIZED INVESTIGATIVE DEMAND PROCEDURES. This section would amend section 3486(a)(1) of title 18, United States Code, to authorize the Attorney General or a designated representative to issue administrative subpoenas in cases under new section 1349 of title 18, United States Code.

(c) CONFORMING AMENDMENT. The table of sections for chapter 63 of title 18 United States Code, is modified to list new section "1349. Pattern of violations resulting in harm to residents of nursing homes and related facilities."

SEC. 501. USE OF FORFEITED FUNDS TO PAY RESTITUTION TO CRIME VICTIMS AND REGULATORY AGENCIES. This section would amend section 981(e) of title 18, United States Code, to allow the use of forfeited funds to pay restitution to crime victims and regulatory agencies.

SEC. 502. VICTIM RESTITUTION. The section adds a new subsection "(r) VICTIM RESTITUTION" to the Controlled Substances Act (21 U.S.C. §853) to allow the government to move to dismiss forfeiture proceedings to allow the defendant to use the property subject to forfeiture for the payment of restitution to victims. If forfeiture proceedings are complete and there is no other source of restitution available to the victims, the Government may return the forfeited property so it may be used for restitution.

(a) CERTAIN ACTIONS NOT STAYED BY BANKRUPTCY PROCEEDINGS. This section provides that an action under the False Claims Act may be brought and continued despite concurrent bankruptcy proceedings.

(b) CERTAIN DEBTS NOT DISCHARGEABLE IN BANKRUPTCY. This section prohibits the discharge in bankruptcy of debts resulting from judgments or settlements in Medicare and Medicaid fraud cases under the False Claims Act. Currently, in some cases, persons who rip off the Medicare or Medicaid system can avoid repaying their ill-gotten gains or penalties by filing for bankruptcy.

(c) REPAYMENT OF CERTAIN DEBTS CONSIDERED FINAL. This section adds a new §111 to chapter I of title II of the United States Code which provides that no debt owed for a violation of the False Claims act or under a compromise order or other agreement resolving such a debt may be avoided under bankruptcy provisions.

(a) CRIMINAL FORFEITURE. This section adds a new subsection to 18 U.S.C. § 982(a) to require the forfeiture of proceeds of a criminal retirement offense, including a violation of new section 1348 of title 18, United States Code.

(b) CIVIL FORFEITURE. This section adds a new subsection to 18 U.S.C. § 981(a)(1) to permit the civil forfeiture of proceeds from a criminal retirement offense.