September 7, 2006, Introduced by Reps. Amos, Marleau, Casperson, Vander Veen, Taub, Mortimer, Baxter, Emmons, Jones, Booher, David Law, Pastor and Shaffer and referred to the Committee on Banking and Financial Services.
A bill to amend 1931 PA 328, entitled
"The Michigan penal code,"
by amending section 159g (MCL 750.159g), as amended by 2002 PA 124,
and by adding section 219d.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 159g. As used in this chapter, "racketeering" means
committing, attempting to commit, conspiring to commit, or aiding
or abetting, soliciting, coercing, or intimidating a person to
commit an offense for financial gain, involving any of the
following:
(a) A felony violation of section 8 of the tobacco products
tax act, 1993 PA 327, MCL 205.428, concerning tobacco product
taxes, or section 9 of former 1947 PA 265, concerning cigarette
taxes.
(b) A violation of section 11151(3) of the natural resources
and environmental protection act, 1994 PA 451, MCL 324.11151, or
section 48(3) of former 1979 PA 64, concerning felonious disposal
of hazardous waste.
(c) A felony violation of part 74 or section 17766a of the
public health code, 1978 PA 368, MCL 333.7401 to 333.7461 and
333.17766a, concerning controlled substances or androgenic anabolic
steroids.
(d) A felony violation of section 60 of the social welfare
act, 1939 PA 280, MCL 400.60, concerning welfare fraud.
(e) A violation of section 4, 5, or 7 of the medicaid false
claim act, 1977 PA 72, MCL 400.604, 400.605, and 400.607,
concerning medicaid fraud.
(f) A felony violation of section 18 of the Michigan gaming
control and revenue act, the Initiated Law of 1996, MCL 432.218,
concerning the business of gaming.
(g) A violation of section 409 of the uniform securities act,
1964 PA 265, MCL 451.809, concerning securities fraud.
(h) A violation of section 5 or 7 of 1978 PA 33, MCL 722.675
and 722.677, concerning the display or dissemination of obscene
matter to minors.
(i) A felony violation of section 72, 73, 74, 75, or 77,
concerning arson.
(j) A violation of section 93, 94, 95, or 96, concerning bank
bonds, bills, notes, and property.
(k) A violation of section 110 or 110a, concerning breaking
and entering or home invasion.
(l) A violation of section 117, 118, 119, 120, 121, or 124,
concerning bribery.
(m) A violation of section 120a, concerning jury tampering.
(n) A violation of section 145c, concerning child sexually
abusive activity or material.
(o) A felony violation of section 157n, 157p, 157q, 157r,
157s, 157t, or 157u, concerning credit cards or financial
transaction devices.
(p) A felony violation of section 174, 175, 176, 180, 181, or
182, concerning embezzlement.
(q) A felony violation of chapter XXXIII, concerning
explosives and bombs.
(r) A violation of section 213, concerning extortion.
(s) A felony violation of section 218, concerning false
pretenses.
(t) A violation of section 219d, concerning residential
mortgage fraud.
(u) (t)
A felony violation of section 223(2), 224(1)(a),
(b), or (c), 224b, 224c, 224e(1), 226, 227, 234a, 234b, or 237a,
concerning firearms or dangerous weapons.
(v) (u)
A felony violation of chapter XLI, concerning
forgery and counterfeiting.
(w) (v)
A violation of section 271, 272, 273, or 274,
concerning securities fraud.
(x) (w)
A violation of section 300a, concerning food stamps
or coupons or access devices.
(y) (x)
A violation of section 301, 302, 303, 304, 305,
305a, or 313, concerning gambling.
(z) (y)
A violation of section 316 or 317, concerning
murder.
(aa) (z)
A violation of section 330, 331, or 332, concerning
horse racing.
(bb) (aa)
A violation of section 349, 349a, or 350,
concerning kidnapping.
(cc) (bb)
A felony violation of chapter LII, concerning
larceny.
(dd) (cc)
A violation of section 411k, concerning money
laundering.
(ee) (dd)
A violation of section 422, 423, 424, or 425,
concerning perjury or subornation of perjury.
(ff) (ee)
A violation of section 452, 455, 457, 458, or 459,
concerning prostitution.
(gg) (ff)
A violation of section 529, 529a, 530, or 531,
concerning robbery.
(hh) (gg)
A felony violation of section 535, 535a, or 536a,
concerning stolen, embezzled, or converted property.
(ii) (hh)
A violation of chapter LXXXIII-A, concerning
terrorism.
(jj) (ii)
A violation of section 5 of 1984 PA 343, MCL
752.365, concerning obscenity.
(kk) (jj)
An offense committed within this state or another
state
that constitutes racketeering activity as defined in section
1961(1)
of title 18 of the United States Code, 18 U.S.C. 1961 18
USC 1961(1).
(ll) (kk)
An offense committed within this state or another
state in violation of a law of the United States that is
substantially similar to a violation listed in subdivisions (a)
through (ii)
(jj).
(mm) (ll) An offense committed in another state in violation
of a statute of that state that is substantially similar to a
violation
listed in subdivisions (a) through
(ii) (jj).
Sec. 219d. (1) A person who with the intent to defraud does
any of the following is guilty of the crime of residential mortgage
fraud punishable as provided in this section:
(a) Knowingly makes any deliberate misstatement,
misrepresentation, or omission during the mortgage lending process.
(b) Knowingly uses or facilitates the use of any deliberate
misstatement, misrepresentation, or omission, knowing that it
contains a misstatement, misrepresentation, or omission, during the
mortgage lending process.
(c) Receives any proceeds or any other money in connection
with a residential mortgage closing that the person knew resulted
from a violation of subdivision (a) or (b).
(d) Conspires to violate any of the provisions of subdivision
(a), (b), or (c).
(e) Files or causes to be filed with the register of deeds of
any county of this state any document the person knows to contain a
deliberate misstatement, misrepresentation, or omission.
(2) A crime of residential mortgage fraud under this section
shall not be predicated solely upon information lawfully disclosed
under federal disclosure laws, regulations, and interpretations
related to the mortgage lending process.
(3) For the purpose of determining venue of a prosecution
under this section, a violation of this section is considered to
have been committed in any of the following:
(a) In the county in which the residential property for which
the mortgage loan is obtained or sought is located.
(b) In any county in which any act was performed in
furtherance of the violation.
(c) In any county in which any person alleged to have violated
this section had control or possession of any proceeds of the
violation.
(d) If a loan closing occurred, in the county in which the
closing occurred.
(e) In any county in which a document containing a deliberate
misstatement, misrepresentation, or omission is filed or recorded
with the register of deeds.
(4) A person who violates this section is guilty of a felony
punishable by 1 of the following:
(a) Except for a violation described in subdivision (b),
imprisonment for not more than 10 years or a fine of not more than
$50,000.00, or both.
(b) If the violation involves engaging or participating in a
pattern of residential mortgage fraud or a conspiracy or endeavor
to engage or participate in a pattern of residential mortgage
fraud, imprisonment for not more than 20 years or a fine of not
more than $100,000.00, or both.
(5) It is an affirmative defense to a prosecution of a
defendant for a violation of this section committed by an employee
or agent of the defendant if the defendant demonstrates all of the
following by a preponderance of the evidence:
(a) The defendant had in force at the time of the violation
and continues to have in force a written policy that includes at
least all of the following:
(i) A prohibition against conduct that violates this section by
employees and agents of the defendant.
(ii) Penalties or discipline for violation of the policy.
(iii) A process for educating employees and agents concerning
the policy and consequences of a violation.
(iv) A requirement for a criminal history check before
employing an employee or engaging an agent and a requirement that
the defendant will not employ or engage an individual whose
criminal history check reveals a previous conviction of a crime
involving fraud.
(b) The defendant demonstrates that it enforces the written
policy described in subdivision (a).
(c) Before the violation of this section, the defendant
communicated the written policy described in subdivision (a) and
the consequences for violating the policy to the employee or agent
who committed the violation.
(6) Each residential property transaction subject to a
violation of this section constitutes a separate offense.
(7) Any real or personal property of any kind used or intended
for use in the course of, derived from, or realized through a
violation of this section is subject to forfeiture in the same
manner as provided in part 47 of the revised judicature act of
1961, 1961 PA 236, MCL 600.4701 to 600.4709.
(8) As used in this section:
(a) "Mortgage lending process" means the process through which
a person seeks or obtains a residential mortgage loan, including,
but not limited to, solicitation, application, or origination,
negotiation of terms, third-party provider services, underwriting,
signing and closing, and funding of the loan. Documents involved in
the mortgage lending process include, but are not limited to,
uniform residential loan applications or other loan
applications; appraisal reports; HUD-1 settlement statements;
supporting personal documentation for loan applications such as W-2
forms, verifications of income and employment, bank statements, tax
returns, and payroll stubs; and any required disclosures.
(b) "Pattern of residential mortgage fraud" means 1 or more
misstatements, misrepresentations, or omissions made during the
mortgage lending process that involve 2 or more residential
properties and that have the same or similar intents, results,
accomplices, victims, or methods of commission or otherwise are
interrelated by distinguishing characteristics.
(c) "Person" means an individual, corporation, limited
liability company, partnership, trustee, association, or other
legal entity.
(d) "Residential mortgage loan" means a loan or agreement to
extend credit made to a person that is secured by a mortgage,
security interest, or other document representing a security
interest or lien on any interest in a 1-family to 4-family dwelling
located in this state. The term includes a renewal, extension, or
refinancing of a residential mortgage loan.