FRAUD Act

Key Points

• State officials such as governors, state agency heads, and state inspectors general would have to report serious fraud involving federal money to the FBI within 180 days of finding out about it.
• To keep getting federal funding, a state's governor would have to certify each year that state officials mostly followed this reporting rule during the previous year.
• Officials who knowingly ignore the reporting duty or interfere with a fraud investigation could be fined and sent to prison for up to 10 years.
• Officials convicted under this law can be permanently banned by federal agencies from overseeing the distribution of federal funds again.
• The bill only applies to fraud cases involving at least $250,000 in federal grant, cooperative agreement, or other federal funding to a state.
• The bill states it cannot be used to remove an elected state official from office or to override state powers protected by the Tenth Amendment.