In a big boost to the Justice Department’s financial fraud efforts, Congress on Monday sent the Fraud Enforcement and Recovery Act (FERA) to President Obama for his signature.
The legislation is in response to the mortgage fraud and financial services meltdown. It strengthens the False Claims Act, the whistleblowing legislation that has helped the U.S. recover more than $15 billion over the last eight years. As we reported last month, the bill also authorizes $245 million a year over two years to hire more than 300 federal agents, 200 prosecutors and 200 forensic analysts to rebuild “white collar” enforcement efforts that took a back seat after the 9/11 attacks to counter-terrorism. “This bill is a step toward holding accountable those who have caused so much damage to our economy,” Senate Judiciary Committee Chairman Pat Leahy (D-Vt.), a leading sponsor of the bill, said in a floor statement.
Sen. Ted Kaufman (D-Del.), another leading sponsor, said in a statement: “We can’t have separate sets of rules for people who rob banks and banks who rob people.” Sen. Charles Grassley (R-Iowa) also introduced the bill and made the following statement upon its passage:
This legislation will send a message to those who have defrauded homeowners and mortgage lenders and will send an even stronger message to those who are thinking about committing a future fraud. It includes the most significant amendments to the False Claims Act since 1986, which will ensure that court decisions that limit the FCA are overturned and congressional intent is restored. Congress has done the right thing by passing this legislation, and I hope the president signs it as quickly as possible.
The Federal Bureau of Investigation currently has fewer than 250 assigned to financial fraud cases throughout the country, and can’t investigate the more than 5000 mortgage fraud allegations the Treasury Department receives each month, Leahy’s statement said.