Fraud Accountability and Recovery Act

Bill Number

H.R. 5548

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

International Affairs

Status

Introduced

Latest Action

2025-09-23: Referred to the House Committee on Foreign Affairs.

Last Updated

2026-06-11T08:07:14Z

AI-Generated Summary

Purpose

The Fraud Accountability and Recovery Act (H.R. 5548) aims to deter fraud against the United States by prohibiting foreign assistance to countries that fail to extradite individuals convicted of defrauding the U.S. or refuse to help recover stolen federal funds. It seeks to protect taxpayer dollars, strengthen program integrity, and ensure accountability for large-scale fraud schemes, such as those involving COVID-19 relief funds.

Key Provisions

• Prohibition on Assistance: Adds a new subsection to the Foreign Assistance Act of 1961, barring U.S. aid to any country that the President determines has:
• Failed to extradite an individual convicted of fraud against the U.S. or who benefited from the proceeds of such fraud.
• Failed to take all appropriate legal, administrative, or enforcement actions (e.g., identifying, freezing, seizing, and repatriating) to recover fraudulently obtained federal funds.
• Congressional Findings: Highlights massive annual U.S. fraud losses ($233–521 billion from 2018–2022) and details the "Feeding Our Future" scandal in Minnesota, where over $250 million in child nutrition funds were stolen through fake claims, shell companies, and money laundering, with some proceeds transferred abroad (e.g., to Kenya). It lists related charges like wire fraud, money laundering, and theft of government funds.
• Sense of Congress: Emphasizes the need for better tools to recover overseas assets, prevent safe havens for fraudsters, and deter future schemes to safeguard intended program beneficiaries.
• Waiver Authority: The President can waive the prohibition if it harms U.S. national security, but must notify relevant congressional committees (House Foreign Affairs and Senate Foreign Relations) at least 15 days in advance with a justification.
• Reporting Requirement: The Secretary of State must submit an annual report to Congress starting 180 days after enactment, listing noncompliant countries and detailing the total fraud amounts, court remedies (e.g., recoveries, restitution, fines), and seizures linked to each country's failures.

Significant Changes to Existing Law

• Amends Section 620 of the Foreign Assistance Act of 1961 by adding a new subsection (z), introducing the first explicit link between U.S. foreign aid and cooperation on extraditing fraud convicts or recovering stolen funds.
• Previously, the Act prohibited aid for reasons like human rights abuses or support for terrorism, but this expands it to cover financial fraud accountability, creating a new enforcement tool without altering core aid eligibility criteria.

Potential Impacts

• On Government Agencies: The State Department will face increased administrative burdens for assessments and annual reports; the Justice Department may see improved international cooperation in fraud prosecutions, potentially aiding asset recovery.
• On Citizens: U.S. taxpayers could benefit from reduced fraud losses through better fund recoupment, protecting programs like child nutrition; however, it might indirectly affect domestic aid programs if fraud deterrence leads to fewer overall schemes.
• On International Relations: Conditions U.S. foreign aid on anti-fraud cooperation, potentially straining ties with noncompliant countries (e.g., those harboring assets from schemes like Feeding Our Future); waivers could maintain flexibility for strategic allies, but reports may pressure nations publicly.

Main Stakeholders Affected

• U.S. Government Entities: Congress (oversight via reports and notifications), Executive Branch (President for waivers, State Department for reporting and aid decisions), and Department of Justice (enhanced tools for international fraud cases).
• Foreign Governments: Recipients of U.S. aid that may lose funding if they fail to extradite convicts or assist in fund recovery, particularly those with weak extradition treaties or lax financial enforcement.
• U.S. Citizens and Taxpayers: Indirectly affected as beneficiaries of fraud prevention and potential fund recovery, reducing the burden of annual fraud losses estimated in hundreds of billions.
• Convicted Individuals and Fraud Networks: Those involved in defrauding U.S. programs (e.g., via money laundering or overseas transfers) face heightened risks of extradition and asset seizure.
• Nonprofit and Program Operators: Entities like those in the Feeding Our Future case, where fraud undermined legitimate aid; the law promotes integrity to ensure funds reach intended recipients, such as hungry children.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens U.S. leverage in international law enforcement by tying aid to extradition and asset recovery, but relies on presidential determinations, which could lead to legal challenges if seen as arbitrary; aligns with existing anti-money laundering laws without creating new courts or penalties.
• Constitutional: Balances executive foreign policy powers (e.g., waivers) with congressional oversight (reports and notifications), respecting separation of powers; no direct constitutional issues, as it builds on Congress's authority over spending.
• Political: Could spark bipartisan support for fiscal accountability but risk diplomatic backlash from aid-dependent nations; highlights vulnerabilities in pandemic relief programs, potentially influencing future aid legislation; the waiver provision allows pragmatic flexibility amid geopolitical tensions, though annual reports may fuel public debates on foreign aid efficiency.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Finstad, Brad [R-MN-1]

Cosponsors (12)

Rep. Fischbach, Michelle [R-MN-7], Rep. Taylor, David J. [R-OH-2], Rep. Stauber, Pete [R-MN-8], Rep. Burchett, Tim [R-TN-2], Rep. Haridopolos, Mike [R-FL-8], Rep. Donalds, Byron [R-FL-19], Rep. Boebert, Lauren [R-CO-4], Rep. Mace, Nancy [R-SC-1], Rep. Barrett, Tom [R-MI-7], Rep. Bost, Mike [R-IL-12], Rep. Fallon, Pat [R-TX-4], Rep. Pfluger, August [R-TX-11]

Recent Actions

• 2025-09-23: Referred to the House Committee on Foreign Affairs.
• 2025-09-23: Introduced in House
• 2025-09-23: Introduced in House

Bill Versions

• Fraud Accountability and Recovery Act — issued 2025-09-23 — PDF (6 pages)