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111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    111-321

======================================================================



 
 PREVENTING HARASSMENT THROUGH OUTBOUND NUMBER ENFORCEMENT ACT OF 2009 
                          (PHONE ACT OF 2009)

                                _______
                                

November 2, 2009.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Conyers, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 1110]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 1110) to amend title 18, United States Code, to prevent 
caller ID spoofing, and for other purposes, having considered 
the same, reports favorably thereon with an amendment and 
recommends that the bill as amended do pass.

                                CONTENTS

                                                                   Page

The Amendment....................................................     1
Purpose and Summary..............................................     2
Background and Need for the Legislation..........................     3
Hearings.........................................................     3
Committee Consideration..........................................     4
Committee Votes..................................................     4
Committee Oversight Findings.....................................     4
New Budget Authority and Tax Expenditures........................     4
Congressional Budget Office Cost Estimate........................     4
Performance Goals and Objectives.................................     5
Constitutional Authority Statement...............................     5
Advisory on Earmarks.............................................     5
Section-by-Section Analysis......................................     6
Changes in Existing Law Made by the Bill, as Reported............     6

                             The Amendment

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Preventing Harassment through 
Outbound Number Enforcement Act of 2009'' or the ``PHONE Act of 2009''.

SEC. 2. CALLER ID SPOOFING.

    (a) In General.--Chapter 47 of title 18, United States Code, is 
amended by adding at the end the following:

``Sec. 1041. Caller ID spoofing

    ``(a) Offense.--Whoever, in or affecting interstate or foreign 
commerce, knowingly uses or provides to another--
            ``(1) false caller ID information with intent wrongfully to 
        obtain anything of value; or
            ``(2) caller ID information pertaining to an actual person 
        or other entity without that person's or entity's consent and 
        with intent to deceive any person or other entity about the 
        identity of the caller;
or attempts or conspires to do so, shall be punished as provided in 
subsection (b).
    ``(b) Punishment.--Whoever violates subsection (a) shall--
            ``(1) if the offense is a violation of subsection (a)(1), 
        be fined under this title or imprisoned not more than 5 years, 
        or both; and
            ``(2) if the offense is a violation of subsection (a)(2), 
        be fined under this title or imprisoned not more than one year, 
        or both.
    ``(c) Law Enforcement Exception.--This section does not prohibit 
lawfully authorized investigative, protective, or intelligence activity 
of a law enforcement agency of the United States, a State, or a 
political subdivision of a State, or of an intelligence agency of the 
United States, or any activity authorized under chapter 224 of this 
title.
    ``(d) Forfeiture.--
            ``(1) In general.--The court, in imposing sentence on a 
        person who is convicted of an offense under this section, shall 
        order that the defendant forfeit to the United States--
                    ``(A) any property, real or personal, constituting 
                or traceable to gross proceeds obtained from such 
                offense; and
                    ``(B) any equipment, software or other technology 
                used or intended to be used to commit or to facilitate 
                the commission of such offense.
            ``(2) Procedures.--The procedures set forth in section 413 
        of the Controlled Substances Act (21 U.S.C. 853), other than 
        subsection (d) of that section, and in Rule 32.2 of the Federal 
        Rules of Criminal Procedure, shall apply to all stages of a 
        criminal forfeiture proceeding under this section.
    ``(e) Definitions.--In this section--
            ``(1) the term `caller ID information' means any 
        identifying information regarding the origination of a 
        telephone call, including the name or the telephone number of 
        the caller, that is transmitted with the telephone call;
            ``(2) the term `telephone call' means a call made or 
        received using any real time voice communications service, 
        regardless of the technology or network used; and
            ``(3) the term `State' includes a State of the United 
        States, the District of Columbia, and any commonwealth, 
        territory, or possession of the United States.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 47 of title 18, United States Code, is amended by adding at the 
end the following new item:

``1041. Caller ID spoofing.''.

SEC. 3. OTHER SPECIFIED UNLAWFUL ACTIVITIES FOR MONEY LAUNDERING.

    Section 1956(c)(7)(D) of title 18, United States Code, is amended 
by inserting ``section 1037 (relating to fraud and related activity in 
connection with electronic mail), section 1041 (relating to caller ID 
spoofing),'' before ``section 1111''.

                          Purpose and Summary

    The purpose of H.R. 1110, the ``Preventing Harassment 
through Outbound Number Enforcement (PHONE) Act of 2009,'' is 
to prevent and mitigate identity theft and to ensure privacy by 
establishing criminal penalties for caller ID ``spoofing.'' The 
bill targets spoofing by prohibiting the use of caller ID 
information to hide the callers' true identity in order to 
wrongfully obtain anything of value or to commit other abusive 
acts. The bill provides for felony penalties of up to 5 years 
in prison for violations committed with the intent to 
wrongfully obtain anything of value. Certain abusive uses of 
another person's caller ID information without commercial 
motives are classified as misdemeanors under the bill.

                Background and Need for the Legislation

    In recent years, spoofing has become more commonplace, 
leading to increased security vulnerabilities and identity 
theft. Spoofing involves the use of a false caller ID to hide 
the caller's true identity in order to commit fraud or some 
other abusive act. Recently, spoofing technology has become 
readily available, either through the purchase of Internet 
telephone equipment or through Web sites specifically set up to 
spoof. For example, Voice-Over-Internet-Protocol (VOIP) 
equipment can easily be configured to populate the caller ID 
field with information of the user's choosing.
    Since caller ID spoofing can make a call appear to come 
from any phone number, it has the ability to cause damaged 
credit and financial ruin. Call recipients sometimes divulge 
personal and private information to the spoofer, under the 
mistaken belief that it is a legitimate call. For example, the 
AARP (formerly the American Association of Retired Persons) has 
reported cases in which spoofers called individuals claiming 
that they had missed jury duty.\1\ These individuals were told 
that they would be subject to prosecution if they did not 
provide their Social Security number and other personal 
information. The phone number that appeared on their caller ID 
was from the local courthouse, so the victims assumed that the 
call was legitimate. Such incidences have been reported in at 
least 15 States, including the District of Columbia.\2\
---------------------------------------------------------------------------
    \1\Sid Kirchheimer, Scam Alert: Courthouse Con, AARP Bulletin, May 
2006, available at http://www.aarp.org/bulletin/consumer/courthouse--
con.html
    \2\Id.
---------------------------------------------------------------------------
    In addition to identity theft, spoofing invades the privacy 
of those individuals whose caller ID is used to mask fraudulent 
calls, and therefore it can be used as a form of aggressive 
harassment. Additionally, many business functions, from credit 
card verification to automatic call routing, opt to use caller 
ID for security purposes, which spoofing can render useless.
    However, there are instances where caller ID information is 
altered for legitimate reasons. For example, a domestic 
violence shelter may alter caller ID information to ensure the 
safety of domestic violence victims. In addition, in many 
instances where telemarketers are hired by companies, the 
caller ID information transmitted is that of the actual 
company, allowing those receiving the call to have a reliable 
way to call back.

                                Hearings

    The Committee's Subcommittee on Crime, Terrorism, and 
Homeland Security held 1 day of hearings on a predecessor bill, 
H.R. 740, during the 110th Congress, on February 6, 2007. 
Testimony was received from two witnesses: Congressman Tim 
Murphy of Pennsylvania, and Barry M. Sabin, Deputy Assistant 
Attorney General, Criminal Division, United States Department 
of Justice.

                        Committee Consideration

    On October 7, 2009, the Committee met in open session and 
ordered the bill H.R. 1110 favorably reported, with one 
amendment, by a voice vote, a quorum being present.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that there 
were no recorded votes during Committee consideration of H.R. 
1110.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee reports that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 1110, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 19, 2009.
Hon. John Conyers, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1110, the 
Preventing Harassment through Outbound Number Enforcement 
(PHONE) Act of 2009.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz, who can be reached at 226-2860.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                  Director.

Enclosure

cc:
        Honorable Lamar S. Smith.
        Ranking Member
H.R. 1110--Preventing Harassment through Outbound Number Enforcement 
        (PHONE) Act of 2009.
    CBO estimates that implementing H.R. 1110 would have no 
significant cost to the Federal Government. Enacting the bill 
could affect direct spending and revenues, but any such effects 
would not be significant.
    H.R. 1110 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of State, local, or tribal 
governments.
    H.R. 1110 would establish a new federal crime for the 
fraudulent use of caller-ID information. Because the bill would 
establish a new offense, the government would be able to pursue 
cases that it otherwise would not be able to prosecute. CBO 
expects that H.R. 1110 would apply to a relatively small number 
of offenders, however, so any increase in costs for law 
enforcement, court proceedings, or prison operations would not 
be significant. Any such costs would be subject to the 
availability of appropriated funds.
    Because those prosecuted and convicted under H.R. 1110 
could be subject to criminal fines, the Federal Government 
might collect additional amounts if the legislation is enacted. 
Criminal fines are recorded as revenues, deposited in the Crime 
Victims Fund, and later spent. CBO estimates that any 
additional revenues and direct spending would not be 
significant because of the small number of cases likely to be 
affected.
    Persons prosecuted and convicted under the bill also could 
be subject to the seizure of certain assets by the Federal 
Government. Proceeds from the sale of such assets would be 
deposited into the Assets Forfeiture Fund and spent from that 
fund, mostly in the same year. Thus, enacting H.R. 1110 could 
increase both revenues deposited into the fund and direct 
spending from the fund. However, CBO estimates that any 
increase in revenues or spending would be negligible.
    The CBO staff contact for this estimate is Mark Grabowicz. 
The estimate was approved by Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, H.R. 
1110 will assist in combating caller ID spoofing, particularly 
spoofing perpetrated for commercial gain.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in article I, section 8, clause 3 of the 
Constitution.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 1110 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(d), 9(e), or 9(f) of Rule XXI.

                      Section-by-Section Analysis

    Section. 1. Short Title. Section 1 sets forth the short 
title of the bill as the ``Preventing Harassment through 
Outbound Number Enforcement Act of 2009'' or the ``PHONE Act of 
2009.''
    Section 2. Caller ID Spoofing. Section 2 amends title 18, 
United States Code, to prohibit using or providing, in 
interstate or foreign commerce, false caller ID information 
with an intent to wrongfully obtain anything of value. For 
these cases, the prescribed punishment is a fine and/or 
imprisonment for not more than 5 years. The section also 
prohibits using or providing the caller ID information of ``an 
actual person or other entity,'' without the person or entity's 
consent, and with an intent to deceive ``the recipient or other 
entity'' about the caller's identity. For these situations, the 
punishment is a fine and/or imprisonment for not more than 1 
year.
    The legislation does not affect legally available blocking 
of caller ID technology.
    Subparagraph (c) of the section exempts from the purview of 
the statute any lawful investigative, protective, or 
intelligence activity of a Federal, State, or local law 
enforcement agency or of a U.S. intelligence agency, or any 
activity authorized for the protection of witnesses in criminal 
proceedings.
    Subparagraph (d) provides for criminal forfeiture. 
Specifically, a court could order the convicted party to 
forfeit the proceeds derived from the offense, along with 
equipment used to facilitate the offense. This provision is 
modeled on a similar provision in the CAN-SPAM Act of 2003, 18 
U.S.C. Sec. 1037(c).
    Subparagraph (e) sets forth definitions for various terms. 
The definition of ``telephone call'' includes a call made or 
received using any real-time voice communications service, 
regardless of the technology or network used.
    Section 3. Other Specified Unlawful Activities for Money 
Laundering. Section 3 adds the new offence of caller ID 
spoofing (18 U.S.C. 1041), as well as 18 U.S.C. Sec. 1037 
(fraud and fraud related activity in connection with e-mail) to 
the list of ``specified unlawful activities'' in 18 U.S.C. 
Sec. 1956(c)(7)(D) (the money laundering statute). This makes 
certain financial transactions involving the proceeds of 
violations of sections 1037 and 1041 money laundering offenses 
under 18 U.S.C. Sec. Sec. 1956 and 1957, and provides for the 
civil forfeiture of such proceeds. See 18 U.S.C. 
Sec. 981(a)(l)(C) (providing for the civil forfeiture of 
proceeds of crimes designated as ``specified unlawful 
activity''). Existing law provides that comparable crimes, 
e.g., violations of 18 U.S.C. Sec. 1030 (computer fraud and 
abuse) constitute specified unlawful activities under the money 
laundering statute.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

                      TITLE 18, UNITED STATES CODE



           *       *       *       *       *       *       *
PART I--CRIMES

           *       *       *       *       *       *       *


                 CHAPTER 47--FRAUD AND FALSE STATEMENTS

Sec.
1001. Statements or entries generally.
     * * * * * * *
1041. Caller ID spoofing.
     * * * * * * *

Sec. 1041. Caller ID spoofing

    (a) Offense.--Whoever, in or affecting interstate or 
foreign commerce, knowingly uses or provides to another--
            (1) false caller ID information with intent 
        wrongfully to obtain anything of value; or
            (2) caller ID information pertaining to an actual 
        person or other entity without that person's or 
        entity's consent and with intent to deceive any person 
        or other entity about the identity of the caller;
or attempts or conspires to do so, shall be punished as 
provided in subsection (b).
    (b) Punishment.--Whoever violates subsection (a) shall--
            (1) if the offense is a violation of subsection 
        (a)(1), be fined under this title or imprisoned not 
        more than 5 years, or both; and
            (2) if the offense is a violation of subsection 
        (a)(2), be fined under this title or imprisoned not 
        more than one year, or both.
    (c) Law Enforcement Exception.--This section does not 
prohibit lawfully authorized investigative, protective, or 
intelligence activity of a law enforcement agency of the United 
States, a State, or a political subdivision of a State, or of 
an intelligence agency of the United States, or any activity 
authorized under chapter 224 of this title.
    (d) Forfeiture.--
            (1) In general.--The court, in imposing sentence on 
        a person who is convicted of an offense under this 
        section, shall order that the defendant forfeit to the 
        United States--
                    (A) any property, real or personal, 
                constituting or traceable to gross proceeds 
                obtained from such offense; and
                    (B) any equipment, software or other 
                technology used or intended to be used to 
                commit or to facilitate the commission of such 
                offense.
            (2) Procedures.--The procedures set forth in 
        section 413 of the Controlled Substances Act (21 U.S.C. 
        853), other than subsection (d) of that section, and in 
        Rule 32.2 of the Federal Rules of Criminal Procedure, 
        shall apply to all stages of a criminal forfeiture 
        proceeding under this section.
    (e) Definitions.--In this section--
            (1) the term ``caller ID information'' means any 
        identifying information regarding the origination of a 
        telephone call, including the name or the telephone 
        number of the caller, that is transmitted with the 
        telephone call;
            (2) the term ``telephone call'' means a call made 
        or received using any real time voice communications 
        service, regardless of the technology or network used; 
        and
            (3) the term ``State'' includes a State of the 
        United States, the District of Columbia, and any 
        commonwealth, territory, or possession of the United 
        States.

           *       *       *       *       *       *       *


CHAPTER 95--RACKETEERING

           *       *       *       *       *       *       *


Sec. 1956. Laundering of monetary instruments

    (a) * * *

           *       *       *       *       *       *       *

    (c) As used in this section--
            (1) * * *

           *       *       *       *       *       *       *

            (7) the term ``specified unlawful activity'' 
        means--
                    (A) * * *

           *       *       *       *       *       *       *

                    (D) an offense under section 32 (relating 
                to the destruction of aircraft), section 37 
                (relating to violence at international 
                airports), section 115 (relating to 
                influencing, impeding, or retaliating against a 
                Federal official by threatening or injuring a 
                family member), section 152 (relating to 
                concealment of assets; false oaths and claims; 
                bribery), section 175c (relating to the variola 
                virus), section 215 (relating to commissions or 
                gifts for procuring loans), section 351 
                (relating to congressional or Cabinet officer 
                assassination), any of sections 500 through 503 
                (relating to certain counterfeiting offenses), 
                section 513 (relating to securities of States 
                and private entities), section 541 (relating to 
                goods falsely classified), section 542 relating 
                to entry of goods by means of false 
                statements), section 545 (relating to smuggling 
                goods into the United States), section 549 
                (relating to removing goods from Customs 
                custody), section 554 (relating to smuggling 
                goods from the United States), section 641 
                (relating to public money, property, or 
                records), section 656 (relating to theft, 
                embezzlement, or misapplication by bank officer 
                or employee), section 657 (relating to lending, 
                credit, and insurance institutions), section 
                658 (relating to property mortgaged or pledged 
                to farm credit agencies), section 666 (relating 
                to theft or bribery concerning programs 
                receiving Federal funds), section 793, 794, or 
                798 (relating to espionage), section 831 
                (relating to prohibited transactions involving 
                nuclear materials), section 844 (f) or (i) 
                (relating to destruction by explosives or fire 
                of Government property or property affecting 
                interstate or foreign commerce), section 875 
                (relating to interstate communications), 
                section 922(1) (relating to the unlawful 
                importation of firearms), section 924(n) 
                (relating to firearms trafficking), section 956 
                (relating to conspiracy to kill, kidnap, maim, 
                or injure certain property in a foreign 
                country), section 1005 (relating to fraudulent 
                bank entries), 1006(relating to fraudulent 
                Federal credit institution entries), 
                1007(relating to Federal Deposit Insurance 
                transactions), 1014(relating to fraudulent loan 
                or credit applications), section 1030 (relating 
                to computer fraud and abuse), 1032(relating to 
                concealment of assets from conservator, 
                receiver, or liquidating agent of financial 
                institution), section 1037 (relating to fraud 
                and related activity in connection with 
                electronic mail), section 1041 (relating to 
                caller ID spoofing), section 1111 (relating to 
                murder), section 1114 (relating to murder of 
                United States law enforcement officials), 
                section 1116 (relating to murder of foreign 
                officials, official guests, or internationally 
                protected persons), section 1201 (relating to 
                kidnaping), section 1203 (relating to hostage 
                taking), section 1361 (relating to willful 
                injury of Government property), section 1363 
                (relating to destruction of property within the 
                special maritime and territorial jurisdiction), 
                section 1708 (theft from the mail), section 
                1751 (relating to Presidential assassination), 
                section 2113 or 2114 (relating to bank and 
                postal robbery and theft), section 2252A 
                (relating to child pornography) where the child 
                pornography contains a visual depiction of an 
                actual minor engaging in sexually explicit 
                conduct, section 2260 (production of certain 
                child pornography for importation into the 
                United States), section 2280 (relating to 
                violence against maritime navigation), section 
                2281 (relating to violence against maritime 
                fixed platforms), section 2319 (relating to 
                copyright infringement), section 2320 (relating 
                to trafficking in counterfeit goods and 
                services), section 2332 (relating to terrorist 
                acts abroad against United States nationals), 
                section 2332a (relating to use of weapons of 
                mass destruction), section 2332b (relating to 
                international terrorist acts transcending 
                national boundaries), section 2332g (relating 
                to missile systems designed to destroy 
                aircraft), section 2332h (relating to 
                radiological dispersal devices), section 2339A 
                or 2339B (relating to providing material 
                support to terrorists), section 2339C (relating 
                to financing of terrorism), or section 2339D 
                (relating to receiving military-type training 
                from a foreign terrorist organization) of this 
                title, section 46502 of title 49, United States 
                Code, a felony violation of the Chemical 
                Diversion and Trafficking Act of 1988 (relating 
                to precursor and essential chemicals), section 
                590 of the Tariff Act of 1930 (19 U.S.C. 1590) 
                (relating to aviation smuggling), section 422 
                of the Controlled Substances Act (relating to 
                transportation of drug paraphernalia), section 
                38(c) (relating to criminal violations) of the 
                Arms Export Control Act, section 11 (relating 
                to violations) of the Export Administration Act 
                of 1979, section 206 (relating to penalties) of 
                the International Emergency Economic Powers 
                Act, section 16 (relating to offenses and 
                punishment) of the Trading with the Enemy Act, 
                any felony violation of section 15 of the Food 
                and Nutrition Act of 2008 (relating to 
                supplemental nutrition assistance program 
                benefits fraud) involving a quantity of 
                benefits having a value of not less than 
                $5,000, any violation of section 543(a)(1) of 
                the Housing Act of 1949 (relating to equity 
                skimming), any felony violation of the Foreign 
                Agents Registration Act of 1938, any felony 
                violation of the Foreign Corrupt Practices Act, 
                or section 92 of the Atomic Energy Act of 1954 
                (42 U.S.C. 2122) (relating to prohibitions 
                governing atomic weapons)

           *       *       *       *       *       *       *