Overview
Title
To enhance fraud prevention, improve recovery of improper payments, and for other purposes.
ELI5 AI
The Fraud Prevention and Recovery Act is like a plan to help catch and stop people who take money they're not supposed to, especially from COVID-19 programs. It gives more money to special helpers, like investigators, to find and fix these mistakes and also help people whose identities might have been stolen.
Summary AI
The bill titled "Fraud Prevention and Recovery Act" aims to enhance efforts to prevent fraud and recover improper payments, particularly those related to COVID-19 relief programs. It provides additional funding for inspectors general and the Department of Justice to investigate and prosecute fraud, and it includes measures to strengthen verification processes and improve the recovery of funds. The bill also establishes funding to improve identity verification, payment integrity, and support for victims of identity fraud, promoting collaboration across federal and state agencies to combat improper payments and identity theft.
Published
Keywords AI
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Bill Statistics
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Language
Complexity
AnalysisAI
The proposed legislation, the "Fraud Prevention and Recovery Act," aims to enhance the United States' ability to prevent and recover from fraudulent activities, particularly those related to improper payments. Introduced on April 9, 2024, in the U.S. Senate, this bill seeks to allocate significant funds towards fraud detection, improve data usage for unemployment claims, and provide support for identity fraud victims.
General Summary
The bill is structured into three main titles: Prosecute and Recover, Prevent, and Safeguard. Title I focuses on prosecuting and recovering funds, with large appropriations to support fraud investigations related to the COVID-19 pandemic. Title II centers on preventing fraudulent payments by enhancing systems like the “Do Not Pay” initiative, which involves verifying payment details more rigorously. Title III addresses safeguarding payment integrity and aiding victims of fraud through funding designated for identity verification and support services.
Significant Issues
One of the central concerns observed in this legislation is the allocation and potential oversight of large sums of money, particularly in the sections dealing with Inspectors General and the Department of Justice's (DOJ) fraud strike force teams. The bill proposes $250 million specifically for Inspectors General and $300 million for DOJ fraud strike teams with limited detailed oversight or clarifying measures for fund distribution and usage. This lack of specificity can lead to inefficiencies and potential waste of taxpayer funds.
Additionally, privacy concerns are raised in Title II, which authorizes redisclosure of sensitive information from the National Directory of New Hires. Without clear limitations or robust checks, this poses risks of unauthorized access to personal data. Increasing the dollar amount for false claims from $150,000 to $1,000,000 also raises concerns about increasing federal liability without adequate controls.
Title III proposes establishing a fund of $600 million for identity verification and fraud prevention. The issue lies in a lack of clear performance metrics or timelines, which might result in misallocation or indefinite projects without tangible outcomes.
Public Impact
Broadly, this bill intends to improve government accountability and protect public funds from fraud, which is a positive move for taxpayers. Effective fraud prevention and recovery efforts can potentially save the government billions of dollars in improperly disbursed funds. However, without clear oversight , the large allocation of taxpayer money could result in inefficiencies.
Impact on Stakeholders
For federal agencies and law enforcement, the bill provides substantial resources to strengthen fraud detection and prosecution efforts. This could enhance efficiency in dealing with large fraud cases, notably those from the COVID-19 relief efforts.
For the general public, particularly victims of identity theft, the funding intended for identity verification and victim support services could offer much-needed relief and assistance. However, the absence of specific guidelines and performance assessment might dilute these benefits if funds are not appropriately or effectively applied.
Government officials and departments are expected to coordinate and use shared data more rigorously to prevent improper payments. While this can lead to improved systems of accountability and efficiency, if not properly managed, it risks raising privacy concerns and potential misuse of sensitive data.
In conclusion, while the "Fraud Prevention and Recovery Act" is designed with the goal of strengthening fraud prevention mechanisms and recovery efforts, careful attention must be paid to its implementation and oversight to safeguard against inefficiencies and ensure the bill's intentions are fully realized.
Financial Assessment
The "Fraud Prevention and Recovery Act" outlines several financial allocations aimed at enhancing fraud prevention and recovery of improper payments. However, there are crucial considerations regarding oversight, efficiency, and privacy that need attention.
Summary of Financial Allocations
The bill earmarks substantial funds across various sections to address fraud prevention and recovery:
Section 101 allocates $250,000,000 in total: $100,000,000 is appropriated for the Office of the Inspector General of the Small Business Administration and $150,000,000 for the Office of the Inspector General of the Department of Labor. These funds are intended to support the investigation of organized fraud related to the COVID-19 pandemic through interagency strike forces.
Section 103 sets aside $300,000,000 for the Attorney General to focus on prosecuting severe COVID-19 benefit fraud cases and recovering stolen funds.
Section 301 establishes the "Identity Verification, Payment Integrity, and Victims of Identity Fraud Fund" with $600,000,000. This fund is meant to facilitate multiple initiatives, including creating services for identity verification and support for identity fraud victims.
Section 302 provides $175,000,000 for the Director of the Office for Victims of Crime to assist victims of identity theft.
Financial Allocations and Identified Issues
Oversight and Justification Concerns: The substantial funding under Section 101 for inspectors general prompts questions about accountability and potential inefficiency, as noted in the first issue. The bill does not lay out specific mechanisms for periodic reviews or justifications of these expenditures, which could potentially lead to misuse of taxpayer funds.
Privacy Implications: Section 201's provisions could lead to privacy concerns with the redisclosure of sensitive personal information. The lack of stipulations on how shared data can be used poses significant privacy risks, which require rigorous oversight and clear limitations.
Rising Federal Liability: The increase in the cap on claims from $150,000 to $1,000,000 could expand federal liability. This adjustment heightens the risk of potential exploitation without clear checks or balances, raising both financial and ethical concerns.
Efficiency and Coordination Challenges: The allocation of $300,000,000 in Section 103 could lead to inefficiencies without clear delineations of roles and coordination among the various agencies involved. The generic provision allowing fund transfers without defined responsibilities may result in overlapping efforts without maximizing effectiveness.
Ambiguous Metrics and Timeline: The establishment of the $600,000,000 fund in Section 301 relies on unspecified metrics and timelines, which could complicate proper fund allocation and oversight. Without detailed success criteria or deadlines, the financial accountability of this initiative may be insufficiently robust.
Potential Misuse of Data: Section 202 allows significant data access without specified checks. While intended for oversight purposes, the possibility of misuse exists unless stringent controls and auditing measures ensure compliance with authorized uses.
Definition Clarity: Finally, the lack of precise definitions, particularly concerning the initiative in Section 301, could lead to varying interpretations, potentially resulting in uneven application and financial inefficiency across identified programs.
These financial provisions illustrate an extensive commitment to combating fraud and improper payments but necessitate stronger oversight and detailed planning to ensure efficient and secure use of appropriated funds.
Issues
The allocation of significant funds in Section 101 for the Office of the Inspector General of the Department of Labor and the Small Business Administration raises questions about oversight and potential wastefulness, particularly given the $250,000,000 total allocation. The absence of clear justification or periodic review mechanisms could lead to inefficient use of taxpayer money.
Section 201 raises significant privacy concerns by allowing the Secretary of the Treasury to redisclose information from the National Directory of New Hires, which could result in unauthorized access to sensitive personal data. This provision lacks clear limitations on how this data may be used.
The increase in the dollar amount of claims from $150,000 to $1,000,000 in Section 102 may significantly increase federal liability. The potential for exploitation without robust checks and balances raises both financial and ethical concerns.
The $300,000,000 allocation in Section 103 for DOJ Covid-19 fraud strike force teams lacks clarity in terms of fund distribution and oversight, which could lead to inefficiencies and duplicative efforts among various agencies and offices involved.
Section 301 establishes a $600,000,000 fund for various identity and payment integrity initiatives but fails to provide clear metrics or timelines for assessing success. This lack of specificity could result in misallocation and use of funds over indefinite timelines, questioning the project’s financial accountability.
The broad authority granted to the Attorney General in Section 103 to transfer funds between various agencies without explicit roles and responsibilities could lead to overlap and bureaucratic inefficiencies. This could undermine accountability and effective use of resources.
Section 202 allows the Inspector General of the Department of Labor to access unemployment claims data, but it lacks specific oversight mechanisms to ensure data access remains within authorized purposes, raising the risk of misuse.
The bill lacks detailed definitions and criteria for some of its terms, such as those associated with the 'Identity Verification, Payment Integrity, and Victims of Identity Fraud Fund' in Section 301. This could lead to ambiguous interpretations and uneven implementation across various sectors.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title; table of contents Read Opens in new tab
Summary AI
The Fraud Prevention and Recovery Act is a proposed law that aims to address issues related to fraud through various measures. It includes provisions for funding to enhance fraud detection and recovery efforts, improve use of data for unemployment claims, and offer support to victims of identity fraud.
101. Additional funding for Inspectors General Read Opens in new tab
Summary AI
This section of the bill allocates $100 million to the Small Business Administration's Inspector General and $150 million to the Department of Labor's Inspector General. The funds are for hiring investigators to tackle COVID-19 related fraud and to support interagency efforts led by the Department of Justice, and they are available until 2028. Unused funds will be transferred to the Council of the Inspectors General on Integrity and Efficiency and designated as emergency spending.
Money References
- (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.
102. Administrative false claims Read Opens in new tab
Summary AI
The document outlines amendments to various sections of the United States Code related to administrative false claims. It makes changes to the procedures for handling false claims, increases the dollar amount involved in claims, adjusts reporting requirements, and mandates updates to regulations, all aimed at enhancing efficiency and clarity in how these cases are processed.
Money References
- (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.
103. DOJ Covid–19 fraud strike force teams Read Opens in new tab
Summary AI
The section allocates $300 million to the Attorney General to combat COVID-19 pandemic relief fraud. This funding will be used to set up strike force teams for prosecuting criminals, recovering stolen funds, and supporting law enforcement agencies in their efforts to address such fraud.
Money References
- (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—
201. Enhance Do Not Pay Read Opens in new tab
Summary AI
The section aims to improve the accuracy of government payments by requiring agencies to verify bank account information before payments are made, allowing access to the National Directory of New Hires to prevent improper payments, and permitting the use of credit reports to help identify and recover incorrect payments.
202. Use of unemployment claims data by the Inspector General of the Department of Labor Read Opens in new tab
Summary AI
The section allows the Inspector General of the Department of Labor to access unemployment claims data for audits and investigations related to unemployment programs but sets rules on how the data can be used and shared, including strict security and documentation guidelines. These provisions will take effect one year after the law is passed, and a report on how the data will be managed must be given to Congress and the Secretary of Labor within 180 days of the law's passage.
301. Identity Verification, Payment Integrity, and Victims of Identity Fraud Fund Read Opens in new tab
Summary AI
The bill establishes a fund called the "Identity Verification, Payment Integrity, and Victims of Identity Fraud Fund" to improve identity verification and prevent identity fraud, with a budget of $600 million for 2024, managed by both the Director of the Office of Management and Budget and the Administrator of General Services. The fund will support various initiatives, including enhancing Social Security verification services, developing systems to prevent fraud, and expanding resources for identity fraud victims, with the allocated money available for use until 2028 to improve digital services and secure data sharing.
Money References
- — (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—
- 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.
302. DOJ grants for victim services Read Opens in new tab
Summary AI
The section establishes a grant of $175,000,000 from the U.S. Treasury for the Director of the Office for Victims of Crime to aid identity theft victims. It designates these funds as an emergency requirement based on specific budget resolutions from 2022.
Money References
- — (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.).