FERA – Fraud Enforcement and Recovery Act has vested more powers to the Federal government to scrutinize and prosecute fraudulent activities such as mortgage frauds, corporate frauds, Medicare frauds and other financial frauds. The ultimate aim of the formulation of FERA is to enforce stringent actions and recover the taxpayer’s money lost in such fraudulent activities on medicare fraud.
The FERA mainly concentrates on:
Providing generous funding and resources to the Justice Department, the FBI (Federal Bureau of Investigation), the U.S. Postal Inspection Service, the U.S. Secret Service, and the Inspector General for the Department of Housing and Urban Development for administration activities.
Reinforces the present criminal and civil fraud statutes
More importantly reinforces the CFCA (Civil False Claims Act), under which the government can certainly recover the taxpayer’s amount lost to fraudulent activities.
It also establishes a FCIC (Financial Crisis Inquiry Commission) to carefully scrutinize the internal and global status of the economic crisis.
The most vital role of FERA against frauds and abuses are:
Generous Funding to Fight Fraud:
FERA is generous in funding extensive cash in order to hire more fraud prosecutors, investigators and adjudicators to strengthen its task force in the fight against fraud. It allocates funds to all the aforementioned departments and also allocates around $20 million to the SEC to carry out investigations and prosecution proceedings that involves financial institutions for which FERA and its corrections apply.
The funds allocated by FERA to the various departments will be utilized for bearing the cost of all investigation and prosecution of cases involving criminal, civil, administrative and financial violations. This has led to the increase of enforcement efforts in the fight against various types of frauds.
- Enhancements to Civil, Criminal and Money Laundering Statutes:
The FERA comes as an improved version of the fraud and money laundering laws. These improvements are mainly to bring all the mortgage brokers and other companies fully liable under the federal fraud laws. When these companies come under the direct scrutiny of the federal fraud statutes they become more watchful and fraudulent activities are reduced to a great extent, since they are aware that their activities are under close monitoring by the law enforcement agencies.
- Improvements on the False Claim Act:
FERA has amended and enhanced the FCA in many aspects after realizing that the scope of the FCA is limited under certain circumstances. In order to make strong enforcements and to enhance the powers of the FCA, the FERA has strengthened the hands of the FCA and given it additional powers. The main duty of the False Claim Act is to provide the federal and state governments with proper penalty structures to individuals and companies who have been found guilty of executing false claims. The FCA can also allow whistleblowers to file actions against lawbreakers under the FCA.
- FCIC – Financial Crisis Inquiry Commission:
Last but the most important of all FERA establishes a FCIC with extensive powers to carry out a detailed and thorough scrutiny on the causes of the financial crisis that is faced both domestically and globally. This FCIC team comprises of 10-member team, all of whom are experts in various fields such as banking, finance, economics, cutomer protection, taxation, legal, market regulation, etc., The main purpose of the FCIC would be to:
- Examine and investigate the causes of financial crisis in the U.S.
- The reason for the failure of institutions.
The Inferences of FERA:
The FERA was formulated for a cause and the cause was rather good. The Federal Institutions were strengthened with more powers for the enforcement of cases including fraudulent activities and abuse. The FERA has been the base of many recent developments in the Fraud Recovery Statute. There are many law firms specializing in this field of law and it has given rise to a strong task force in the combat against various fraudulent activities.
Justice Delayed is Justice Denied, keeping this mind more powers are vested with the investigating agencies and offenders are brought to trial. The taxpayer’s money that is lost to such fraudulent activities is being recovered by enforcement of stringent rules and regulations to curb fraudulent activities.
This has led to many companies and institutions exercise their tasks in a more ethical and fraud-free manner.