S. 1430 — Introduced in Senate

II 116th CONGRESS 1st Session S. 1430 IN THE SENATE OF THE UNITED STATES May 13, 2019 Mr. Lankford (for himself, Mr. Peters, and Ms. Sinema) introduced the following bill; which was read twice and referred to the Committee on Homeland Security and Governmental Affairs A BILL To amend title 5, United States Code, to prevent fraud by representative payees. 1. Short title This Act may be cited as the Representative Payee Fraud Prevention Act of 2019. 2. Representative payee fraud (a) Definitions (1) CSRS Section 8331 of title 5, United States Code, is amended— (A) in paragraph (31), by striking and at the end; (B) in paragraph (32), by striking the period at the end and inserting ; and; and (C) by adding at the end the following: (33) representative payee means a person (including an organization) appointed under section 8345(e)(1) to receive payments on behalf of a minor or an individual mentally incompetent or under other legal disability. . (2) FERS Section 8401 of title 5, United States Code, is amended— (A) in paragraph (37), by striking and at the end; (B) in paragraph (38), by striking the period at the end and inserting ; and; and (C) by adding at the end the following: (39) representative payee means a person (including an organization) appointed under section 8466(c)(1) to receive payments on behalf of a minor or an individual mentally incompetent or under other legal disability. . (b) Embezzlement or conversion (1) CSRS Subchapter III of chapter 83 of title 5, United States Code, is amended by inserting after section 8345 the following: 8345a. Embezzlement or conversion of payments (a) Embezzling and conversion generally (1) In general It shall be unlawful for a representative payee to embezzle or in any manner convert all or any part of the amounts received from payments received as a representative payee to a use other than for the use and benefit of the minor or individual on whose behalf such payments were received. (2) Revocation If the Office determines that a representative payee has embezzled or converted payments as described in paragraph (1), the Office shall promptly revoke payments to the representative payee. (b) Penalty Any person who violates subsection (a)(1) shall be fined under title 18, imprisoned for not more than 5 years, or both. (c) Prima facie evidence Any willful neglect or refusal by a representative payee to make and file proper accountings or reports concerning the amounts received from payments authorized under section 8345(e) as required by law shall be taken to be sufficient evidence prima facie of the embezzlement or conversion of such amounts. . (2) FERS Subchapter VI of chapter 84 of title 5, United States Code, is amended by inserting after section 8466 the following: 8466a. Embezzlement or conversion of payments (a) Embezzling and conversion generally (1) In general It shall be unlawful for a representative payee to embezzle or in any manner convert all or any part of the amounts received from payments received as a representative payee to a use other than for the use and benefit of the minor or individual on whose behalf such payments were received. (2) Revocation If the Office determines that a representative payee has embezzled or converted payments as described in paragraph (1), the Office shall promptly revoke payments to the representative payee. (b) Penalty Any person who violates subsection (a)(1) shall be fined under title 18, imprisoned for not more than 5 years, or both. (c) Prima facie evidence Any willful neglect or refusal by a representative payee to make and file proper accountings or reports concerning the amounts received from payments authorized under section 8466(c) as required by law shall be taken to be sufficient evidence prima facie of the embezzlement or conversion of such amounts. . (3) Technical and conforming amendments (A) The table of sections for chapter 83 of title 5, United States Code, is amended by inserting after the item relating to section 8345 the following: 8345a. Embezzlement or conversion of payments. . (B) The table of sections for chapter 84 of title 5, United States Code, is amended by inserting after the item relating to section 8466 the following: 8466a. Embezzlement or conversion of payments. . (c) Deferral of payment pending appointment of representative payee (1) CSRS Section 8345(e) of title 5, United States Code, is amended— (A) by inserting (1) after (e); (B) in the first sentence, by inserting (including an organization) after person; (C) in the second sentence— (i) by inserting (including an organization) after any person; and (ii) by inserting and may appropriately receive such payments on behalf of the claimant after claimant; and (D) by adding at the end the following: (2) If the Office determines that direct payment of a benefit to an individual mentally incompetent or under other legal disability would cause substantial harm to the individual, the Office may defer or suspend direct payment of the benefit until such time as the appointment of a representative payee is made. . (2) FERS Section 8466(c) of title 5, United States Code, is amended— (A) by inserting (1) after (c); (B) in the first sentence, by inserting (including an organization) after person; (C) in the second sentence— (i) by inserting (including an organization) after any person; and (ii) by inserting and may appropriately receive such payments on behalf of the claimant after claimant; and (D) by adding at the end the following: (2) If the Office determines that direct payment of a benefit to an individual mentally incompetent or under other legal disability would cause substantial harm to the individual, the Office may defer or suspend direct payment of the benefit until such time as the appointment of a representative payee is made. . (d) Limitations on appointments of representative payees (1) CSRS Section 8345 of title 5, United States Code, is amended by inserting after subsection (e) the following: (f) The Office may not authorize a person to receive payments on behalf of a minor or individual of legal disability under subsection (e) if that person has been convicted of a violation of— (1) section 8345a or 8466a; (2) section 208 or 1632 of the Social Security Act (42 U.S.C. 408 and 1383a); or (3) section 6101 of title 38. . (2) FERS Section 8466 of title 5, United States Code, is amended by adding at the end the following: (d) The Office may not authorize a person to receive payments on behalf of a minor or individual of legal disability under subsection (c) if that person has been convicted of a violation of— (1) section 8345a or 8466a; (2) section 208 or 1632 of the Social Security Act (42 U.S.C. 408 and 1383a); or (3) section 6101 of title 38. . 3. Implementation (a) Authorization of payments Amounts in the Civil Service Retirement and Disability Fund may be used by the Office of Personnel Management, without further appropriation, for the cost of activities of the Office relating to preventing fraud by representative payees (as defined in section 8331 and 8401 of title 5, United States Code, as amended by this Act). (b) Regulations Not later than 1 year after the date of enactment of this Act, the Office of Personnel Management— (1) shall promulgate regulations to carry out the amendments made by this Act; and (2) may promulgate additional regulations relating to the administration of the representative payee program. 4. Effective date The amendments made by this Act— (1) shall take effect on the date of the enactment of this Act; and (2) apply on and after the effective date of the regulations promulgated under section 3(b)(1).