S. 3652

119 S3652 IS: Welfare Fraud Deterrence and Recovery Act of 2026
 U.S. Senate
 2026-01-15
 text/xml
 EN
 Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
 II  119th CONGRESS  2d Session  S. 3652  IN THE SENATE OF THE UNITED STATES   January 15, 2026   Mr. Cotton  introduced the following bill; which was read twice and referred to the  Committee on the Judiciary    A BILL
To enhance criminal penalties for welfare fraud, to provide adequate immigration consequences for fraud convictions, to establish a welfare fraud recovery task force, and for other purposes.
1.
Short title
This Act may be cited as the   Welfare Fraud Deterrence and Recovery Act of 2026  .
2.
Enhanced criminal penalties for welfare fraud
Section 1001 of title 18, United States Code, is amended by adding at the end the following:
(d)
(1)
In this subsection, the terms  Federal welfare program  and  noncitizen  have the meanings given such terms in section 4 of the  Welfare Fraud Deterrence and Recovery Act of 2026 .
(2)
If a person violates subsection (a) with respect to a matter that relates to a Federal welfare program—
(A)
the term of imprisonment imposed under this section shall be not more than 15 years;
(B)
if the defendant is a noncitizen or a naturalized citizen of the United States, the term of imprisonment imposed under this section shall be not less than 2 years; and
(C)
if the defendant obtained not less than $100,000 as a result of the conduct in violation of this section, the term of imprisonment imposed under this section shall be not less than 5 years.
 .
3.
Immigration consequences for fraud conviction
(a)
Reentry bar
Section 212(a)(10) of the Immigration and Nationality Act ( 8 U.S.C. 1182(a)(10) ) is amended by adding at the end the following:
(F)
Former naturalized citizens who were removed due to a conviction for welfare fraud
Any alien who has been denaturalized under section 340(f) and seeks readmission to the United States within 20 years of the date of such denaturalization is inadmissible.
 .
(b)
Deportability
Section 237(a)(2)(A) of the Immigration and Nationality Act ( 8 U.S.C. 1227(a)(2)(A) ) is amended—
(1)
by redesignating clause (vi) as clause (vii); and
(2)
by inserting after clause (v) the following:
(vi)
Fraud
Any alien who is convicted of an offense prohibited under  chapter 47  of title 18, United States Code, or of any offense involving fraud by any court in the United States is deportable.
 .
(c)
Expedited removal
Section 238 of the Immigration and Nationality Act ( 8 U.S.C. 1228 ) is amended—
(1)
by striking the section header and inserting the following:
Expedited removal of any noncitizen convicted of an aggravated felony or any offense involving fraud.  ; and
(2)
in subsection (a)—
(A)
in paragraph (1), by striking  any criminal offense covered in section 241(a)(2)(A)(iii), (B), (C), or (D), or any offense covered by section 241(a)(2)(A)(ii) for which both predicate offenses are, without regard to the date of their commission, otherwise covered by section 241(a)(2)(A)(i)  and inserting  any criminal offense described in subparagraph (A)(iii), (A)(vi), (B), (C), or (D), of section 237(a)(2), or any offense described in section 237(a)(2)(A)(ii) for which both predicate offenses are, without regard to the date on which they were committed, otherwise described in section 237(a)(2)(A)(i) ;
(B)
in paragraph (2)—
(i)
by inserting  or an offense described in section 237(a)(2)(A)(vi)  after  an aggravated felony ; and
(ii)
by striking  felon  and inserting  alien ; and
(C)
in paragraph (3)(A), by striking  an aggravated felony before the alien's release from incarceration for the underlying aggravated felony  and inserting  an aggravated felony or an offense described in section 237(a)(2)(A)(vi) before the alien's release from incarceration for the underlying crime .
(d)
Denaturalization for welfare fraud
Section 340 of the Immigration and Nationality Act ( 8 U.S.C. 1451 ) is amended—
(1)
by redesignating subsections (f), (g), and (h) as subsections (g), (h), and (i), respectively; and
(2)
by inserting after subsection (e) the following:
(f)
Welfare fraud
If a person who has been naturalized under this chapter is convicted of defrauding the United States Government of a Federal public benefit (as defined in section 401 of the  Personal Responsibility and Work Opportunity Reconciliation Act of 1996  ( 8 U.S.C. 1611(c) )) or defrauding a State or local government of a State or local public benefit (as defined in section 411(c) of such Act ( 8 U.S.C. 1621(c) )), and any act or acts leading to such conviction or admission began or occurred after the date of his or her naturalization, the court in which such conviction occurs shall immediately—
(1)
revoke, set aside, and declare void the final order admitting such person to citizenship; and
(2)
declare certificate of naturalization of such person to be canceled.
 .
4.
Welfare fraud recovery task force and civil actions for welfare fraud
(a)
Definitions
In this section—
(1)
the term  Federal welfare program —
(A)
means a program providing a Federal public benefit (as defined in section 401 of the  Personal Responsibility and Work Opportunity Reconciliation Act of 1996  ( 8 U.S.C. 1611(c) )); and
(B)
includes grants under the Child Care and Development Block Grant Act of 1990 ( 42 U.S.C. 9857 et seq. ) and the Child and Adult Care Food Program under section 17 of the Richard B. Russell National School Lunch Act ( 42 U.S.C. 1766 );
(2)
the term  Fund  means the Welfare Fraud Recovery Fund established under subsection (d)(1);
(3)
the term  noncitizen  has the meaning given the term  alien  in section 101(a) of the Immigration and Nationality Act ( 8 U.S.C. 1101(a) ); and
(4)
the term  Task Force  means the Fraud Recovery Task Force established under subsection (b).
(b)
Establishment of Fraud Recovery Task Force
The Attorney General, in consultation with the Secretary of Health and Human Services, shall establish within the Department of Justice a Welfare Fraud Recovery Task Force to investigate, prosecute, and recover funds lost to fraud in Federal welfare programs.
(c)
Civil suits authorized
(1)
In general
The Task Force may bring a civil action in the name of the United States against any person who knowingly—
(A)
submits or causes to be submitted a false or fraudulent claim for payment or approval under a Federal welfare program;
(B)
uses or causes to be used a false record or statement material to a false or fraudulent claim for payment or approval under a Federal welfare program;
(C)
conspires to commit a violation described in subparagraph (A) or (B); or
(D)
knowingly conceals or improperly avoids or decreases an obligation to pay or transmit money or property to the Government relating to such a claim.
(2)
Damages and penalties
(A)
In general
Subject to subparagraph (B), a person engaging in a violation described in paragraph (1) is liable to the United States Government for—
(i)
a civil penalty of not less than $10,000 and not more than $20,000, which shall be adjusted in accordance with the Federal Civil Penalties Inflation Adjustment Act of 1990 ( 28 U.S.C. 2461  note);
(ii)
3 times the amount of damages sustained by the United States Government because of the violation by that person; and
(iii)
the costs of the civil action, including reasonable attorney fees.
(B)
Enhanced penalties for noncitizens
If the person engaging in conduct described in paragraph (1) is a noncitizen, in addition to the amount imposed under subparagraph (A), the court shall impose a civil penalty equal to 2 times the amount of damages sustained by the United States Government because of the violation by that person, plus interest at the rate specified in section 3717 of title 31, United States Code.
(3)
Statute of limitations
An action under this subsection may be brought not later than the later of—
(A)
15 years after the date on which the conduct described in paragraph (1) is committed; or
(B)
3 years after the date when facts material to the cause of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances.
(4)
Burden of proof
In any action brought under this subsection, the United States shall be required to prove all essential elements of the cause of action, including damages, by a preponderance of the evidence.
(5)
Whistleblower protections and rewards
Any individual who provides information leading to a successful recovery under this subsection shall be entitled to—
(A)
the protections under section 3730(h) of title 31, United States Code, that apply with respect to actions to stop a violation of chapter 37 of such title; and
(B)
a reward of not less than 15 percent and not more than 30 percent of the amount recovered, as determined by the Task Force.
(d)
Use of recovered funds
(1)
In general
There is established in the Treasury of the United States a fund, to be known as the Welfare Fraud Recovery Fund.
(2)
Crediting and use of amounts
Amounts recovered under this section—
(A)
shall be deposited into the Fund;
(B)
shall remain available until expended; and
(C)
shall be available to the Secretary of Health and Human Services without further appropriation—
(i)
to reimburse a Federal welfare program for losses due to fraud; and
(ii)
for the cost of investigations and prevention measures by the Task Force.
(e)
Interstate and cross-Border cooperation for fraud schemes
(1)
Interstate cooperation
(A)
In general
The Task Force shall facilitate cooperation among States for the investigation, prosecution, and recovery of funds related to fraud in Federal welfare programs that involve activities crossing State lines, including the submission of false claims, the operation of fraudulent entities, or the transfer of funds across State boundaries.
(B)
Information sharing
The Task Force may enter into memoranda of understanding with State attorneys general, State welfare agencies, and other relevant State entities to share information, including beneficiary records, audit findings, and financial transaction data, subject to applicable privacy protections under section 552a of title 5, United States Code (commonly known as  the Privacy Act of 1974 ), and other Federal laws.
(C)
Joint investigations and enforcement
The Task Force may coordinate joint investigations with States, including the issuance of joint subpoenas, search warrants, and asset freezes. A State participating in a joint investigation shall be entitled to a share of funds in connection with the joint investigation, not to exceed 20 percent of the total amount recovered, as determined by the Task Force based on the level of cooperation provided.
(D)
Compliance requirement
(i)
In general
A State receiving Federal funds under a Federal welfare program shall cooperate with a request for information or assistance from the Task Force.
(ii)
Failure to comply
If a State fails to comply with a request for information or assistance from the Task Force, the head of each agency administering a Federal welfare program may withhold not more than 10 percent of the amounts that would otherwise be provided to the State under the Federal welfare program until the State complies with the request.
(2)
Cross-border cooperation
(A)
In general
The Task Force, in coordination with the Attorney General and the Secretary of State, shall pursue investigations and recoveries for fraud schemes involving international elements, including the transfer of funds to foreign jurisdictions, participation by foreign nationals, or the use of international financial networks.
(B)
Use of international agreements
The Task Force may utilize mutual legal assistance treaties, extradition treaties, and other international agreements to request assistance from foreign governments and international organizations, such as the Financial Action Task Force and the International Criminal Police Organization (commonly known as  INTERPOL ), including the freezing and seizure of assets, the extradition of individuals, and the sharing of financial records.
(C)
Asset recovery
In cases where fraudulent proceeds are transferred to foreign accounts or entities, the Task Force may initiate civil forfeiture proceedings under section 981 of title 18, United States Code, or seek repatriation of assets through diplomatic channels. Amounts recovered under this subparagraph shall be deposited into the Fund.
(D)
Reporting
The Task Force shall submit to Congress an annual report on investigations and recoveries described in subparagraph (A), including the number of requests made to foreign governments and the amounts recovered.
(E)
Incentives
The Secretary of State, in consultation with the Task Force, may incentivize cooperation by foreign governments through conditions on foreign assistance from the United States.
(3)
Authorization of appropriations
There are authorized to be appropriated such sums as are necessary to carry out this subsection, including for personnel, technology, and international liaison activities.