H.R. 5548 — Fraud Accountability and Recovery Act

This section prohibits assistance under the Foreign Assistance Act of 1961 to the government of any country the President determines (1) has failed to extradite an individual convicted of committing fraud against the United States or benefiting from the proceeds of defrauding the United States; or (2) has failed to take all appropriate legal, administrative, or enforcement measures to assist in the recoupment of Federal funds fraudulently stolen from the United States by identifying, freezing, seizing, and repatriating such funds. (Thus, the provision adds a new subsection (z) to Section 620, which lists restrictions on foreign assistance to certain governments.)

This section states congressional findings on federal fraud losses, including Government Accountability Office estimates of $233 billion to $521 billion annually from FY2018 through FY2022 (with 90% of estimated losses in that range), and details the Feeding Our Future fraud scheme in Minnesota—the largest COVID-19 pandemic fraud—which stole over $250 million in child nutrition funds, led to charges against 75 defendants (with multiple convictions), and involved crimes such as wire fraud, money laundering, and theft of government funds.

This section states the sense of Congress that (1) the United States lacks adequate tools to recover stolen taxpayer funds and property transferred overseas, leaving taxpayers without recourse when foreign jurisdictions fail to cooperate; (2) strengthening program integrity, recouping stolen funds, and preventing individuals convicted of defrauding federal programs from seeking international harbor are essential to safeguarding taxpayer dollars and ensuring programs assist those Congress intended; and (3) providing additional deterrence by ensuring potential fraudsters lack a safe harbor abroad is critical to preventing future fraud schemes.

This section authorizes the President to waive the limitation on assistance under section 620(z) of the Foreign Assistance Act of 1961—added by section 2—upon certification to Congress that prohibiting such assistance would be contrary to U.S. national security. The President must notify the House Committee on Foreign Affairs and the Senate Committee on Foreign Relations at least 15 days prior to the waiver's effective date, including a justification.

This section requires the Secretary of State to submit to the House Committee on Foreign Affairs and the Senate Committee on Foreign Relations, not later than 180 days after enactment and annually thereafter, a report that (1) lists each country the President determines has failed to take all appropriate legal, administrative, or enforcement measures as described in section 620(z)(2) of the Foreign Assistance Act of 1961 (as added by section 2); and (2) describes the total amount of fraudulently obtained funds and court-ordered remedies—such as recoveries, restitution, or fines—along with seizures and forfeitures from the United States attributable to each such country's failure.