Monday, May 25, 2009

Fraud Enforcement Recovery Act of 2009

Passed by both the House and Senate, the Fraud Enforcement and Recovery Act of 2009 (FERA) was signed it into law by the President with the following statement -

Today I have signed into law S. 386, the "Fraud Enforcement and Recovery Act of 2009." This Act provides Federal investigators and prosecutors with significant new criminal and civil tools to assist in holding accountable those who have committed financial fraud. These legislative enhancements will help the Department of Justice to combat mortgage fraud, securities and commodities fraud, and related offenses, and to protect taxpayer money that has been expended on recent economic stimulus and rescue packages. With the tools that the Act provides, the Department of Justice and others will be better equipped to address the challenges that face the Nation in difficult economic times and to do their part to help the Nation respond to this challenge.

Section 5(d) of the Act requires every department, agency, bureau, board, commission, office, independent establishment, or instrumentality of the United States to furnish to the Financial Crisis Inquiry Commission, a legislative entity, any information related to any Commission inquiry. As my Administration communicated to the Congress during the legislative process, the executive branch will construe this subsection of the bill not to abrogate any constitutional privilege.

May 20, 2009.

There are many important provisions related to white collar crime in this new law, including changes in the Civil False Claims area, changes to the money laundering statute, areas related to TARP, and changes to a host of statutes like 18 U.S.C. ss 1014, 1031, 1348, and 1956.  Over the next week I will be offering commentary on what FERA says and how it changes the prosecution and defense of white collar matters. 


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Commission inquiry - what does this mean?

Has there been a new entity created?

If so - where?

How does one go about the task of reporting on going organized criminal efforts that has escaped culpability for more than $300 million in fraud for almost a decade?

Is this the ONE?

Posted by: Laser Haas | May 25, 2009 11:36:18 PM

The Fraud Enforcement and Recovery Act will continue the government's recent efforts to hold accountable those that contributed to the mortgage meltdown, and re-build public confidence in the financial markets. However, it remains to be seen whether FERA will have any significant prospective impact on lending policies and practices. The 9/11-style commission may have much to offer on that topic, while prosecutors attempt to address prior misconduct.

Posted by: Fred Rivera | May 28, 2009 9:51:33 PM

The bill included Section 4 to roll back recent Libertarian-leaning rulings by the Supreme Court which tended to muzzle antitrust and fraud enforcement. Parts (A) and (B) repeated below:


‘‘(A) knowingly presents, or causes to be presented,
a false or fraudulent claim for payment or approval;
‘‘(B) knowingly makes, uses, or causes to be made
or used, a false record or statement material to a false
or fraudulent claim;

My question is this: Do you think, with this new definition of FCA, bid-rigging on federal contracts would be classified as a violation of FCA?

Posted by: Turner Bond | Jun 25, 2009 11:21:51 AM

FERA is great but it takes someone in authority to act on complaints and there is no such person or entity- our DOJ, our judicial and legislative leaders could care less about infringements of 18 USC Section 4 which requires anyone to report crime or be held accountable for a crime of not reporting same.

The very system that Obama proclaimed as "broken" gets worse everyday because the FBI does not prosecute corrupt judges.

Posted by: R Hettler | Aug 11, 2009 7:22:01 AM

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