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2000 - Rules and Regulations
Subpart T—Program Fraud Civil Remedies and
Procedures
§ 308.500 Basis, purpose, and scope.
(a) Basis. This subpart implements the Program Fraud
Civil Remedies Act, Pub. L. 99--509, sections 6101--6104, 100 Stat.
1874 (October 21, 1986), codified at 31 U.S.C. 3801--3812, (PFCRA) and
made applicable to the Federal Deposit Insurance Corporation (FDIC) by
section 23 of the Resolution Trust Corporation Completion Act (Pub. L.
103--204, 107 Stat. 2369). 31 U.S.C. 3809 of the statute requires each
Authority head to promulgate regulations necessary to implement the
provisions of the statute.
(b) Purpose. This subpart:
(1) Establishes administrative procedures for imposing civil
penalties and assessments against persons who make, submit, or present
or cause to be made, submitted, or presented false, fictitious, or
fraudulent claims or written statements to the FDIC or to its agents;
and
(2) Specifies the hearing and appeal rights of persons subject to
allegations of liability for such penalties and assessments.
(c) Scope. This subpart applies only to persons who
make, submit, or present or cause to be made, submitted, or presented
false, fictitious, or fraudulent claims or written statements to the
FDIC or to its agents acting on behalf of the FDIC in connection with
FDIC employment matters, FDIC contracting activities, and the FDIC
Asset Purchaser Certification Program. It does not apply to false
claims or statements made in connection with programs (other than as
set forth in the preceding sentence) related to the FDIC's regulatory,
supervision, enforcement, insurance, receivership or liquidation
responsibilities. The FDIC is restricting the scope of applicability of
this subpart because other civil and administrative remedies are
adequate to redress fraud in the areas not covered.
[Codified to 12 C.F.R. § 308.500]
[Section 308.500 added at 66 Fed. Reg. 9189, February 7, 2001,
effective March 9, 2001]
§ 308.501 Definitions.
For purposes of this subpart:
(a) Administrative Law Judge (ALJ) means the presiding
officer appointed by the Office of Financial Institution Adjudication
pursuant to 12 U.S.C. 1818 note and 5 U.S.C. 3105.
(b) Authority means the Federal Deposit Insurance
Corporation (FDIC).
(c) Authority head or Board means the Board of Directors
of the FDIC, which is herein designated by the Chairman of the FDIC to
serve as head of the FDIC for PFCRA matters.
(d) Benefit means, in the context of "statement"
as defined in 31 U.S.C. 3801(a)(9), any financial assistance received
from the FDIC that amounts to $150,000 or less. The term does not
include the FDIC's deposit insurance program.
(e) Claim means any request, demand, or submission:
(1) Made to the FDIC for property, services, or money (including
money representing grants, loans, insurance, or benefits);
(2) Made to a recipient of property, services, or money from the
FDIC or to a party to a contract with the FDIC;
(i) For property or services if the United States:
(A) Provided such property or services;
(B) Provided any portion of the funds for the purchase of such
property or services; or
{{2-28-01 p.2166.21}}
(C) Will reimburse such recipient or party for the purchase of
such property or services;
(ii) For the payment of money (including money representing
grants, loans, insurance, or benefits) if the United States:
(A) Provided any portion of the money requested or demanded; or
(B) Will reimburse such recipient or party for any portion of the
money paid on such request or demand; or
(3) Made to the FDIC that has the effect of decreasing an
obligation to pay or account for property, services, or money.
(f) Complaint means the administrative complaint served
by the reviewing official on the defendant under
§ 308.506 of this
subpart.
(g) Corporation means the Federal Deposit Insurance
Corporation.
(h) Defendant means any person alleged in a complaint
under § 308.506 of this subpart to be liable for a civil penalty or
assessment under
§ 308.502 of this
subpart.
(i) Government means the United States Government.
(j) Individual means a natural person.
(k) Initial decision means the written decision of the
ALJ required by
§ 308.509 or
§ 308.536 of this
subpart, and includes a revised initial decision issued following a
remand or a motion for consideration.
(l) Investigating official means the Inspector General
of the FDIC, or an officer or employee of the Inspector General
designated by the Inspector General. The investigating official must
serve in a position that has a rate of basic pay under the pay scale
utilized by the FDIC that is equal to or greater than 120 percent of
the minimum rate of basic pay for grade 15 under the federal
government's General Schedule.
(m) Knows or has reason to know, means that a person,
with respect to a claim or statement:
(1) Has actual knowledge that the claim or statement is false,
fictitious, or fraudulent;
(2) Acts in deliberate ignorance of the truth or falsity of the
claim or statement; or
(3) Acts in reckless disregard of the truth or falsity of the
claim or statement.
(n) Makes, wherever it appears, includes the terms
"presents", "submits", and "causes to be made,
presented, or submitted." As the context requires, "making" or
"made" likewise includes the corresponding forms of such terms.
(o) Person means any individual, partnership,
corporation, association, or private organization, and includes the
plural of that term.
(p) Representative means an attorney, who is a member in
good standing of the bar of any state, territory, or possession of the
United States or of the District of Columbia or the Commonwealth of
Puerto Rico, and designated by a party in writing.
(q) Reviewing official means the General Council of the
FDIC or his designee who is:
(1) Not subject to supervision by, or required to report to, the
investigating official;
(2) Not employed in the organizational unit of the FDIC in which
the investigating official is employed; and
(3) Serving in a position that has a rate of basic pay under the
pay scale utilized by the FDIC that is equal to or greater than 120
percent of the minimum rate of basic pay for grade 15 under the federal
government's General Schedule.
(r) Statement means any representation, certification,
affirmation, document, record, or accounting or bookkeeping entry made:
(1) With respect to a claim or to obtain the approval or payment
of a claim (including relating to eligibility to make a claim); or
(2) With respect to (including relating to eligibility for):
(i) A contract with, or a bid or proposal for a contract with; or
(ii) A grant, loan, or benefit received, directly or indirectly,
from the FDIC, or any state, political subdivision of a state, or other
party, if the United States government provides any portion of the
money or property under such contract or for such grant, loan, or
benefit, or if the government will reimburse such state, political
subdivision, or party for
{{2-28-01 p.2166.22}}any portion of the money or
property under such contract or for such grant, loan, or benefit.
[Codified to 12 C.F.R. § 308.501]
[Section 308.501 added at 66 Fed. Reg. 9190, February 7, 2001,
effective March 9, 2001]
§ 308.502 Basis for civil penalties and assessments.
(a) Claims. (1) A person who makes a false,
fictitious, or fraudulent claim to the FDIC is subject to a civil
penalty of up to $5,000 per claim. A claim is false, fictitious, or
fraudulent if the person making the claim knows, or has reason to know,
that:
(i) The claim is false, fictitious, or fraudulent; or
(ii) The claim includes, or is supported by, a written statement
that asserts a material fact which is false, fictitious or fraudulent;
or
(iii) The claim includes, or is supported by, a written statement
that:
(A) Omits a material fact; and
(B) Is false, fictitious, or fraudulent as a result of that
omission; and
(C) Is a statement in which the person making the statement has a
duty to include the material fact; or
(iv) the claim seeks payment for providing property or services
that the person has not provided as claimed.
(2) Each voucher, invoice, claim form, or other individual
request or demand for property, services, or money constitutes a
separate claim.
(3) A claim will be considered made to the FDIC, recipient, or
party when the claim is actually made to an agent, fiscal intermediary,
or other entity, including any state or political subdivision thereof,
acting for or on behalf of the FDIC, recipient, or party.
(4) Each claim for property, services, or money that constitutes
any one of the elements in paragraph (a)(1) of this section is subject
to a civil penalty regardless of whether the property, services, or
money is actually delivered or paid.
(5) If the FDIC has made any payment (including transferred
property or provided services) on a claim, a person subject to a civil
penalty under paragraph (a)(1) of this section will also be subject to
an assessment of not more than twice the amount of such claim (or
portion of the claim) that is determined to constitute a false,
fictitious, or fraudulent claim under paragraph (a)(1) of this section.
The assessment will be in lieu of damages sustained by the FDIC because
of the claims.
(6) The amount of any penalty assessed under paragraph (a)(1) of
this section will be adjusted for inflation in accordance with
§ 308.132(c)(3)(xv) of
this part.
(7) The penalty specified in paragraph (a)(1) of this section is
in addition to any other remedy allowable by law.
(b) Statements. (1) A person who submits to the FDIC a
false, fictitious or fraudulent statement is subject to a civil penalty
of up to $5,000 per statement. A statement is false, fictitious or
fraudulent if the person submitting the statement to the FDIC knows, or
has reason to know, that:
(i) The statement asserts a material fact which is false,
fictitious, or fraudulent; or
(ii) The statement omits a material fact that the person making
the statement has a duty to include in the statement; and
(iii) The statement contains or is accompanied by an express
certification or affirmation of the truthfulness and accuracy of the
contents of the statement.
(2) Each written representation, certification, or affirmation
constitutes a separate statement.
(3) A statement will be considered made to the FDIC when the
statement is actually made to an agent, fiscal intermediary, or other
entity, including any state or political subdivision thereof, acting
for or on behalf of the FDIC.
(4) The amount of any penalty assessed under paragraph (a)(1) of
this section will be adjusted for inflation in accordance with
§ 308.132(c)(3)(xv) of this part.
{{2-28-01 p.2166.23}}
(5) The penalty specified in paragraph (a)(1) of this section is
in addition to any other remedy allowable by law.
(c) Failure to file declaration/certification. Where,
as a prerequisite to conducting business with the FDIC, a person is
required by law to file one or more declarations and/or certifications,
and the person intentionally fails to file such
declaration/certification, the person will be subject to the civil
penalties as prescribed by this subpart.
(d) Intent. No proof of specific intent to defraud is
required to establish liability under this section.
(e) Liability. (1) In any case in which it is
determined that more than one person is liable for making a claim or
statement under this section, each such person may be held jointly and
severally liable for a civil penalty under this section.
(2) In any case in which it is determined that more than one
person is liable for making a claim under this section on which the
FDIC has made payment (including transferred property or provided
services), an assessment may be imposed against any such person or
jointly and severally against any combination of such persons.
[Codified to 12 C.F.R. § 308.502]
[Section 308.502 added at 66 Fed. Reg. 9190, February 7, 2001,
effective March 9, 2001]
§ 308.503 Investigations.
(a) If an investigating official concludes that a subpoena pursuant
to the authority conferred by 31 U.S.C. 3804(a) is warranted:
(1) The subpoena will identify the person to whom it is addressed
and the authority under which the subpoena is issued and will identify
the records or documents sought;
(2) The investigating official may designate a person to act on
his or her behalf to receive the documents sought; and
(3) The person receiving such subpoena will be required to
provide the investigating official or the person designated to receive
the documents a certification that the documents sought have been
produced, or that such documents are not available, and the reasons
therefor, or that such documents, suitably identified, have been
withheld based upon the assertion of an identified privilege.
(b) If the investigating official concludes that an action under
the PFCRA may be warranted, the investigating official will submit a
report containing the findings and conclusions of such investigation to
the reviewing official.
(c) Nothing in this section will preclude or limit an investigating
official's discretion to refer allegations directly to the United
States Department of Justice (DOJ) for suit under the False Claims Act
(31 U.S.C. 3729 et seq.) or other civil relief, or to
preclude or limit the investigating official's discretion to defer or
postpone a report or referral to the reviewing official to avoid
interference with a criminal investigation or prosecution.
(d) Nothing in this section modifies any responsibility of an
investigating official to report violations of criminal law to the
Attorney General.
[Codified to 12 C.F.R. § 308.503]
[Section 308.503 added at 66 Fed. Reg. 9191, February 7, 2001,
effective March 9, 2001]
§ 308.504 Review by the reviewing official.
(a) If, based on the report of the investigating official under
§ 308.503(b) of this subpart, the reviewing official determines that
there is adequate evidence to believe that a person is liable under
§ 308.502 of this subpart, the reviewing official will transmit to
the Attorney General a written notice of the reviewing official's
intention to issue a complaint under § 308.506 of this subpart.
(b) Such notice will include:
(1) A statement of the reviewing official's reasons for issuing
a complaint;
(2) A statement specifying the evidence that supports the
allegations of liability;
{{2-28-01 p.2166.24}}
(3) A description of the claims or statements upon which the
allegations of liability are based;
(4) An estimate of the amount of money or the value of property,
services, or other benefits requested or demanded in violation of
§ 308.502 of this subpart;
(5) A statement of any exculpatory or mitigating circumstances
that may relate to the claims or statements known by the reviewing
official or the investigating official; and
(6) A statement that there is a reasonable prospect of collecting
an appropriate amount of penalties and assessments. Such a statement
may be based upon information then known, or upon an absence of any
information indicating that the person may be unable to pay such
amount.
[Codified to 12 C.F.R. § 308.504]
[Section 308.504 added at 66 Fed. Reg. 9191, February 7, 2001,
effective March 9, 2001]
§ 308.505 Prerequisites for issuing a complaint.
(a) The reviewing official may issue a complaint under § 308.506
of this subpart only if:
(1) The DOJ approves the issuance of a complaint in a written
statement described in 31 U.S.C. 3803(b)91); and
(2) In the case of allegations of liability under
§ 308.502(a) of this
subpart with respect to a claim (or a group of related claims submitted
at the same time as defined in paragraph (b) of this section) the
reviewing official determines that the amount of money or the value of
property or services demanded or requested does not exceed $150,000.
(b) For the purposes of this section, a group of related claims
submitted at the same time will include only those claims arising from
the same transaction (e.g., grant, loan, application, or contract) that
are submitted simultaneously as part of a single request, demand, or
submission.
(c) Nothing in this section will be construed to limit the
reviewing official's authority to join in a single complaint against a
person claims that are unrelated or were not submitted simultaneously,
regardless of the amount of money, or the value of property or
services, demanded or requested.
[Codified to 12 C.F.R. § 308.505]
[Section 308.505 added at 66 Fed. Reg. 9191, February 7, 2001,
effective March 9, 2001]
§ 308.506 Complaint.
(a) On or after the date the DOJ approves the issuance of a
complaint in accordance with 31 U.S.C. 3803(b)(1), the reviewing
official may serve a complaint on the defendant, as provided in
§ 308.507 of this subpart.
(b) The complaint will state:
(1) The allegations of liability against the defendant, including
the statutory basis for liability, or identification of the claims or
statements that are the basis for the alleged liability, and the
reasons why liability allegedly arises from such claims or statements;
(2) The maximum amount of penalties and assessments for which the
defendants may be held liable;
(3) Instructions for filing an answer and to request a hearing,
including a specific statement of the defendant's right to request a
hearing by filing an answer and to be represented by a representative;
and
(4) That failure to file an answer within 30 days of service of
the complaint will result in the imposition of the maximum amount of
penalties and assessments without right to appeal, as provided in
§ 308.509 of this
subpart.
(c) At the same time the reviewing official serves the complaint,
he or she will provide the defendant with a copy of this
subpart.
{{2-28-01 p.2166.25}}
[Codified to 12 C.F.R. § 308.506]
[Section 308.506 added at 66 Fed. Reg. 9192, February 7, 2001,
effective March 9, 2001]
§ 308.507 Service of complaint.
(a) Service of a complaint will be made by certified or registered
mail or by delivery in any manner authorized by rule 4(c) of the
Federal Rules of Civil Procedure (28 U.S.C. App.). Service is complete
upon receipt.
(b) Proof of service, stating the name and address of the person on
whom the complaint was served, and the manner and date of service, may
be made by:
(1) Affidavit of the individual serving the complaint by
delivery;
(2) A United States Postal Service return receipt card
acknowledging receipt; or
(3) Written acknowledgment of receipt by the defendant or his or
her representative.
[Codified to 12 C.F.R. § 308.507]
[Section 308.507 added at 66 Fed. Reg. 9192, February 7, 2001,
effective March 9, 2001]
§ 308.508 Answer.
(a) The defendant may request a hearing by filing an answer with
the reviewing official within 30 days of service of the complaint. An
answer will be deemed to be a request for hearing.
(b) In the answer, the defendant:
(1) Must admit or deny each of the allegations of liability made
in the complaint;
(2) Must state any defense on which the defendant intends to
rely;
(3) May state any reasons why the defendant contends that the
penalties and assessments should be less than the statutory maximum;
and
(4) Must state the name, address, and telephone number of the
person authorized by the defendant to act as defendant's
representative, if any.
(c) If the defendant is unable to file an answer meeting the
requirements of paragraph (b) of this section within the time provided:
(1) The defendant may, before the expiration of 30 days from
service of the complaint, file with the reviewing official a general
answer denying liability and requesting a hearing, and a request for an
extension of time within which to file an answer meeting the
requirements of paragraph (b) of this section.
(2) The reviewing official will file promptly with the ALJ the
complaint, the general answer denying liability, and the request for an
extension of time as provided in § 308.510 of this subpart.
(3) For good cause shown, the ALJ may grant the defendant up to
30 additional days within which to file an answer meeting the
requirements of paragraph (b) of this section.
[Codified to 12 C.F.R. § 308.508]
[Section 308.508 added at 66 Fed. Reg. 9192, February 7, 2001,
effective March 9, 2001]
§ 308.509 Default upon failure to file an answer.
(a) If the defendant does not file an answer within the time
prescribed in § 308.508(a) of this subpart, the reviewing official
may refer the complaint to the ALJ.
(b) Upon the referral of the complaint, the ALJ will promptly serve
on defendant in the manner prescribed in § 308.507 of this subpart, a
notice that an initial decision will be issued under this section.
(c) If the defendant fails to answer, the ALJ will assume the facts
alleged in the complaint to be true, and, if such facts establish
liability under
§ 308.502 of this
subpart, the ALJ will issue an initial decision imposing the maximum
amount of penalties and assessments allowed under the statute.
(d) Except as otherwise provided in this section, by failing to
file a timely answer, the defendant waives any right to further review
of the penalties and assessments imposed
{{2-28-01 p.2166.26}}under paragraph (c) of this
section, and the initial decision will become final and binding upon
the parties 30 days after it is issued.
(e) If, before such an initial decision becomes final, the
defendant files a motion with the ALJ seeking to reopen on the ground
that extraordinary circumstances prevented the defendant from filing an
answer, the initial decision will be stayed pending the ALJ's decision
on the motion.
(f) If, in the motion to reopen under paragraph (e) of this
section, the defendant can demonstrate extraordinary circumstances
excluding the failure to file a timely answer, the ALJ will withdraw
the initial decision in paragraph (c) of this section, if such a
decision has been issued, and will grant the defendant an opportunity
to answer the complaint.
(g) A decision of the ALJ denying a defendant's motion to reopen
under paragraph (e) of this section is not subject to reconsideration
under § 308.537 of this
subpart.
(h) The decision denying the motion to reopen under paragraph (e)
of this section may be appealed by the defendant to the Board by filing
a notice of appeal with the board within 15 days after the ALJ denies
the motion. The timely filing of a notice of appeal will stay the
initial decision until the Board decides the issue.
(i) If the defendant files a timely notice of appeal with the
Board, the ALJ will forward the record of the proceeding to the Board.
(j) The Board will decide whether extraordinary circumstances
excuse the defendant's failure to file a timely answer based solely on
the record before the ALJ.
(k) If the Board decides that extraordinary circumstances excuse
the defendant's failure to file a timely answer, the Board will remand
the case to the ALJ with instructions to grant the defendant an
opportunity to answer.
(l) If the Board decides that the defendant's failure to file a
timely answer is not excused, the Board will reinstate the initial
decision of the ALJ, which will become final and binding upon the
parties 30 days after the Board issues such decision.
[Codified to 12 C.F.R. § 308.509]
[Section 308.509 added at 66 Fed. Reg. 9192, February 7, 2001,
effective March 9, 2001]
§ 308.510 Referral of complaint and answer to the ALJ.
Upon receipt of an answer, the reviewing official will file the
complaint and answer with the ALJ. The reviewing official will include
the name, address, and telephone number of a representative of the
Corporation.
[Codified to 12 C.F.R. § 308.510]
[Section 308.510 added at 66 Fed. Reg. 9191, February 7, 2001,
effective March 9, 2001]
§ 308.511 Notice of hearing.
(a) When the ALJ receives the complaint and answer, the ALJ will
promptly serve a notice of hearing upon the defendant in the manner
prescribed by § 308.507
of this subpart. At the same time, the ALJ will send a copy of such
notice to the representative of the Corporation.
(b) The notice will include:
(1) the tentative time, date, and place, and the nature of the
hearing;
(2) The legal authority and jurisdiction under which the hearing
is to be held;
(3) The matters of fact and law to be asserted;
(4) A description of the procedures for the conduct of the
hearing;
(5) The name, address, and telephone number of the representative
of the Corporation and of the defendant, if any; and
(6) Other matters as the ALJ deems appropriate.
[Codified to 12 C.F.R. § 308.511]
[Section 308.511 added at 66 Fed. Reg. 9193, February 7,
2001, effective March 9, 2001]
{{2-28-01 p.2166.27}}
§ 308.512 Parties to the hearing.
(a) The parties to the hearing will be the defendant and the
Corporation.
(b) Pursuant to the False Claims Act (31 U.S.C. 3730(c)(5)), a
private plaintiff under the False Claims Act may participate in these
proceedings to the extend authorized by the provisions of that Act.
[Codified to 12 C.F.R. § 308.512]
[Section 308.512 added at 66 Fed. Reg. 9193, February 7, 2001,
effective March 9, 2001]
§ 308.513 Separation of functions.
(a) The investigating official, the reviewing official, and any
employee or agent of the FDIC who takes part in investigating,
preparing, or presenting a particular case may not, in such case or a
factually related case:
(1) Participate in the hearing as the ALJ;
(2) Participate or advise in the initial decision or the review
of the initial decision by the Board, except as a witness or a
representative in public proceedings; or
(3) Make the collection of penalties and assessments under 31
U.S.C. 3806.
(b) The ALJ will not be responsible to, or subject to the
supervision or direction of, the investigating official or the
reviewing official.
(c) Except as provided in paragraph (a) of this section, the
representative for the FDIC will be an attorney employed in the FDIC's
Legal Division; however, the representative of the FDIC may not
participate or advise in the review of the initial decision by the
Board.
[Codified to 12 C.F.R. § 308.513]
[Section 308.513 added at 66 Fed. Reg. 9193, February 7, 2001,
effective March 9, 2001]
§ 308.514 Ex parte contacts.
No party or person (except employees of the ALJ's office) will
communicate in any way with the ALJ on any matter at issue in a case,
unless on notice and opportunity for all parties to participate. This
provision does not prohibit a person or party from inquiring about the
status of a case or asking routine questions concerning administrative
functions or procedures.
[Codified to 12 C.F.R. § 308.514]
[Section 308.514 added at 66 Fed. Reg. 9193, February 7, 2001,
effective March 9, 2001]
§ 308.515 Disqualification of reviewing official or ALJ.
(a) A reviewing official or ALJ in a particular case may disqualify
himself or herself at any time.
(b) A party may file with the ALJ a motion for disqualification of
a reviewing official or an ALJ. An affidavit alleging conflict of
interest or other reason for disqualification must accompany the
motion.
(c) Such motion and affidavit must be filed promptly upon the
party's discovery of reasons requiring disqualification, or such
objections will be deemed waived.
(d) Such affidavit must state specific facts that support the
party's belief that personal bias or other reason for disqualification
exists and the time and circumstances of the party's discovery of such
facts. The representative of record must certify that the affidavit is
made in good faith and this certification must accompany the affidavit.
(e) Upon the filing of such a motion and affidavit, the ALJ will
proceed no further in the case until he or she resolves the matter of
disqualification in accordance with paragraph (f) of this section.
(f)(1) If the ALJ determines that a reviewing official is
disqualified, the ALJ will dismiss the complaint without
prejudice.
{{2-28-01 p.2166.28}}
(2) If the ALJ disqualifies himself or herself, the case will be
reassigned promptly to another ALJ.
(3) If the ALJ denies a motion to disqualify, the Board may
determine the matter only as part of the Board's review of the initial
decision upon appeal, if any.
[Codified to 12 C.F.R. § 308.515]
[Section 308.515 added at 66 Fed. Reg. 9193, February 7, 2001,
effective March 9, 2001]
§ 308.516 Rights of parties.
Except as otherwise limited by this subpart, all parties may:
(a) Be accompanied, represented, and advised by a representative;
(b) Participate in any conference held by the ALJ;
(c) Conduct discovery;
(d) Agree to stipulations of fact or law which will be made part of
the record;
(e) Present evidence relevant to the issues at the hearing;
(f) Present and cross-examine witnesses;
(g) Present oral arguments at the hearing as permitted by the ALJ:
and
(h) Submit written briefs and proposed findings of fact and
conclusions of law.
[Codified to 12 C.F.R. § 308.516]
[Section 308.516 added at 66 Fed. Reg. 9193, February 7, 2001,
effective March 9, 2001]
§ 308.517 Authority of the ALJ.
(a) The ALJ will conduct a fair and impartial hearing, avoid delay,
maintain order, and assure that a record of the proceeding is made.
(b) The ALJ has the authority to:
(1) Set and change the date, time, and place of the hearing upon
reasonable notice to the parties;
(2) Continue or recess the hearing in whole or in part for a
reasonable period of time;
(3) Hold conferences to identify or simplify the issues, or to
consider other matters that may aid in the expeditious disposition of
the proceeding;
(4) Administer oaths and affirmations;
(5) Issue subpoenas requiring the attendance of witnesses and the
production of documents at depositions or at hearings;
(6) Rule on motions and other procedural matters;
(7) Regulate the scope and timing of discovery;
(8) Regulate the course of the hearing and the conduct of
representatives and parties;
(9) Examine witnesses;
(10) Receive, rule on, exclude, or limit evidence;
(11) Upon motion of a party, take official notice of facts,
decide cases, in whole or in part, by summary judgment where there is
no disputed issue of material fact;
(12) Conduct any conference, argument, or hearing on motions in
person or by telephone; and
(13) Exercise such other authority as is necessary to carry out
the responsibilities of the ALJ under this subpart.
(c) The ALJ does not have the authority to make any determinations
regarding the validity of federal statutes or regulations or of
directives, rules, resolutions, policies, orders or other such general
pronouncements issued by the Corporation.
[Codified to 12 C.F.R. § 308.517]
[Section 308.517 added at 66 Fed. Reg. 9193, February 7, 2001,
effective March 9, 2001]
§ 308.518 Prehearing conferences.
(a) The ALJ may schedule prehearing conferences as
appropriate.
{{2-28-01 p.2166.29}}
(b) Upon the motion of any party, the ALJ will schedule at least
one prehearing conference at a reasonable time in advance of the
hearing.
(c) The ALJ may use prehearing conferences to discuss the
following:
(1) Simplification of the issues;
(2) the necessity or desirability of amendments to the pleading,
including the need for a more definite statement;
(3) Stipulations and admissions of facts as to the contents and
authenticity of documents;
(4) Whether the parties can agree to submission of the case on a
stipulated record;
(5) Whether a party chooses (subject to the objection of other
parties) to waive appearance at an oral hearing and to submit only
documentary evidence and written argument;
(6) Limitation of the number of witnesses;
(7) Scheduling dates for the exchange of witness lists and of
proposed exhibits;
(8) Discovery;
(9) The time, date, and place for the hearing; and
(10) Such other matters as may tend to expedite the fair and just
disposition of the proceedings.
(d) The ALJ may issue an order containing all matters agreed upon
by the parties or ordered by the ALJ at a prehearing conference.
[Codified to 12 C.F.R. § 308.518]
[Section 308.518 added at 66 Fed. Reg. 9193, February 7, 2001,
effective March 9, 2001]
§ 308.519 Disclosure of documents.
(a) Upon written request to the reviewing official, the defendant
may review any relevant and material documents, transcripts, records,
and other materials that relate to the allegations set out in the
complaint and upon which the findings and conclusions of the
investigating official under
§ 308.503(b) of this
subpart are based, upon such documents are subject to a privilege under
federal law. Upon payment of fees for duplication, the defendant may
obtain copies of such documents.
(b) Upon written request to the reviewing official, the defendant
also may obtain a copy of all exculpatory information in the possession
of the reviewing official or investigating official relating to the
allegations in the complaint, even if it is contained in a document
that would otherwise be privileged. If the document would otherwise be
privileged, only that portion containing exculpatory information must
be disclosed.
(c) The notice sent to the Attorney General from the reviewing
official as described in
§ 308.504 of this
subpart is not discoverable under any circumstances.
(d) The defendant may file a motion to compel disclosure of the
documents subject to the provisions of this section. Such a motion may
only be filed with the ALJ following the filing of an answer pursuant
to § 308.508 of this subpart.
[Codified to 12 C.F.R. § 308.519]
[Section 308.519 added at 66 Fed. Reg. 9194, February 7, 2001,
effective March 9, 2001]
§ 308.520 Discovery.
(a) The following types of discovery are authorized:
(1) Requests for production of documents for inspection and
copying;
(2) Requests for admission of the authenticity of any relevant
document or of the truth of any relevant fact;
(3) Written interrogatories; and
(4) Depositions.
(b) For the purpose of this section and §§ 308.521 and 308.522
of this subpart, the term documents includes information,
documents, reports, answers, records, accounts, papers,
and
{{2-28-01 p.2166.30}}other data or documentary
evidence. Nothing contained in this subpart will be interpreted to
require the creation of a document.
(c) Unless mutually agreed to by the parties, discovery is
available only as ordered by the ALJ. The ALJ will regulate the timing
of discovery.
(d) Motions for discovery. (1) A party seeking
discovery may file a motion with the ALJ and a copy of the requested
discovery, or in the case of depositions, a summary of the scope of the
proposed deposition, must accompany such motions.
(2) Within 10 days of service, a party may file an opposition to
the motion and/or a motion for protective order as provided in
§ 308.523 of this
subpart.
(3) The ALJ may grant a motion for discovery only if he or she
finds that the discovery sought:
(i) Is necessary for the expeditious, fair, and reasonable
consideration of the issues;
(ii) Is not unduly costly or burdensome;
(iii) Will not unduly delay the proceeding; and
(iv) Does not seek privileged information.
(4) The burden of showing that discovery should be allowed is on
the party seeking discovery.
(5) The ALJ may grant discovery subject to the protective order
under § 308.523 of this subpart.
(e) Dispositions. (1) If a motion for deposition is
granted, the ALJ will issue a subpoena for the deponent, which may
require the deponent to produce documents. The subpoena will specify
the time, date, and place at which the deposition will be held.
(2) The party seeking to depose must serve the subpoena in the
manner prescribed in
§ 308.507 of this
subpart.
(3) The deponent may file with the ALJ a motion to quash the
subpoena or a motion for a protective order within 10 days of service.
(4) The party seeking to depose must provide for the taking of a
verbatim transcript of the deposition, and must make the transcript
available to all other parties for inspection and copying.
(f) Each party must bear its own costs of discovery.
[Codified to 12 C.F.R. § 308.520]
[Section 308.520 added at 66 Fed. Reg. 9194, February 7, 2001,
effective March 9, 2001]
§ 308.521 Exchange of witness lists, statements, and exhibits.
(a) At least 15 days before the hearing or at such other time as
may be ordered by the ALJ, the parties must exchange witness lists,
copies of prior statements of proposed witnesses, and copies of
proposed hearings exhibits, including copies of any written statements
that the party intends to offer in lieu of live testimony in accordance
with § 308.532(b) of
this subpart. At the time such documents are exchanged, any party that
intends to rely on the transcript of deposition testimony in lieu of
live testimony at the hearing, if permitted by the ALJ, must provide
each party with a copy of the specific pages of the transcript it
intends to introduce into evidence.
(b) If a party objects, the ALJ will not admit into evidence the
testimony of any witness whose name does not appear on the witness list
or any exhibit not provided to the opposing party as provided in
paragraph (a) of this section unless the ALJ finds good cause for the
failure or that there is no prejudice to the objecting party.
(c) Unless another party objects within the time set by the ALJ,
documents exchanged in accordance with paragraph (a) of this section
will be deemed to be authentic for the purpose of admissibility at the
hearing.
[Codified to 12 C.F.R. § 308.521]
[Section 308.521 added at 66 Fed. Reg. 9194, February 7,
2001, effective March 9, 2001]
{{2-28-01 p.2166.31}}
§ 308.522 Subpoenas for attendance at hearing.
(a) A party wishing to procure the appearance and testimony of any
individual at the hearing may request that the ALJ issue a subpoena.
(b) A subpoena requiring the attendance and testimony of an
individual may also require the individual to produce documents at the
hearing.
(c) A party seeking a subpoena must file a written request not less
than 15 days before the date fixed for the hearing unless otherwise
allowed by the ALJ for good cause shown. Such request must specify any
documents to be produced and must designate the witnesses and describe
the address and location thereof with sufficient particularity to
permit such witnesses to be found.
(d) The subpoena must specify the time, date, and place at which
the witness is to appear and any documents the witness is to produce.
(e) The party seeking the subpoena must serve it in the manner
prescribed in § 308.507
of this subpart. A subpoena on a party or upon an individual under the
control of a party may be served by first class mail.
(f) A party or the individual to whom the subpoena is directed may
file with the ALJ a motion to quash the subpoena within 10 days after
service or on or before the time specified in the subpoena for
compliance if it is less than 10 days after service.
[Codified to 12 C.F.R. § 308.522]
[Section 308.522 added at 66 Fed. Reg. 9194, February 7, 2001,
effective March 9, 2001]
§ 308.523 Protective order.
(a) A party or a prospective witness or deponent may file a motion
for a protective order with respect to discovery sought by an opposing
party or with respect to the hearing, seeking to limit the availability
or disclosure of evidence.
(b) In issuing a protective order, the ALJ may make any order which
justice requires to protect a party or person from annoyance,
embarrassment, oppression, or undue burden or expense, including one or
more of the following:
(1) That the discovery will not be conducted;
(2) That the discovery will be conducted only on specified terms
and conditions, including a designation of the time or place;
(3) That the discovery will be conducted only through a method of
discovery other than that requested;
(4) That certain matters not be inquired into, or that the scope
of discovery be limited to certain matters;
(5) That discovery be conducted with no one present except
persons designated by the ALJ;
(6) That the contents of discovery or evidence be sealed or
otherwise kept confidential;
(7) That a deposition after being sealed be opened only by order
of the ALJ;
(8) That a trade secret or other confidential research,
development, commercial information, or facts pertaining to any
criminal investigation, proceeding, or other administrative
investigation not be disclosed or be disclosed only in a designated
way; or
(9) That the parties simultaneously file specified documents or
information enclosed in sealed envelopes to be opened as directed by
the ALJ.
[Codified to 12 C.F.R. § 308.523]
[Section 308.523 added at 66 Fed. Reg. 9195, February 7, 2001,
effective March 9, 2001]
§ 308.524 Witness fees.
The party requesting a subpoena must pay the cost of the fees and
mileage of any witness subpoenaed in the amounts that would be payable
to a witness in a proceeding in the United States District Court. A
check for witness fees and mileage must accompany the
{{2-28-01 p.2166.32}}subpoena when served, except
that when a subpoena is issued on behalf of the FDIC, a check for
witness fees and mileage need not accompany the subpoena.
[Codified to 12 C.F.R. § 308.524]
[Section 308.524 added at 66 Fed. Reg. 9195, February 7, 2001,
effective March 9, 2001]
§ 308.525 Form, filing, and service of papers.
(a) Form. (1) Documents filed with the ALJ must
include an original and two copies.
(2) Every pleading and paper filed in the proceeding must contain
a caption setting forth the title of the action, the case number
assigned by the ALJ, and a designation of the paper (e.g.,
motion to quash subpoena).
(3) Every pleading and paper must be signed by, and must contain
the address and telephone number of the party or the person on whose
behalf the paper was filed, or his or her representative.
(4) Papers are considered filed when they are mailed by certified
or registered mail. Date of mailing may be established by a certificate
from the party or its representative or by proof that the document was
sent by certified or registered mail.
(b) Service. A party filing a document with the ALJ
must, at the time of filing, serve a copy of such document on every
other party. Service upon any party of any document other than those
required to be served as prescribed in
§ 308.507 of this
subpart must be made by delivering a copy or by placing a copy of the
document in the United States mail, postage prepaid, and addressed the
party's last known address. When a party is represented by a
representative, service must be made upon such representative in lieu
of the actual party. The ALJ may authorize facsimile transmission as an
acceptable form of service.
(c) Proof of service. A certificate by the individual
serving the document by personal delivery or by mail, setting forth the
manner of service, will be proof of service.
[Codified to 12 C.F.R. § 308.525]
[Section 308.525 added at 66 Fed. Reg. 9195, February 7, 2001,
effective March 9, 2001]
§ 308.526 Computation of time.
(a) In computing any period of time under this subpart or in an
order issued thereunder, the time begins with the day following the
act, event, or default, and includes the last day of the period, unless
it is a Saturday, Sunday, or legal holiday observed by the federal
government, in which event it includes the next business day.
(b) When the period of time allowed is less than 7 days,
intermediate Saturdays, Sundays, and legal holidays observed by the
federal government will be excluded from the computation.
(c) Where a document has been served or issued by placing it in the
mail, an additional 5 days will be added to the time permitted for any
response.
[Codified to 12 C.F.R. § 308.526]
[Section 308.526 added at 66 Fed. Reg. 9195, February 7, 2001,
effective March 9, 2001]
§ 308.527 Motions.
(a) Any application to the ALJ for an order or ruling must be by
motion. Motions must state the relief sought, the authority relied
upon, and the facts alleged, and must be filed with the ALJ and served
on all other parties. Motions may include, without limitation motions
for summary judgment.
(b) Except for motions made during a prehearing conference or at
the hearing, all motions must be in writing. The ALJ may require that
oral motions be reduced to writing.
(c) Within 15 days after a written motion is served, or any other
time as may be fixed by the ALJ, any party may file a response to such
motion.
{{2-28-01 p.2166.33}}
(d) The ALJ may not grant a written motion before the time for
filing responses thereto has expired, except upon consent of the
parties or following a hearing on the motion, but may overrule or deny
such motion without awaiting a response.
(e) The ALJ will make a reasonable effort to dispose of all
outstanding motions prior to the beginning of the hearing.
[Codified to 12 C.F.R. § 308.527]
[Section 308.527 added at 66 Fed. Reg. 9195, February 7, 2001,
effective March 9, 2001]
§ 308.528 Sanctions.
(a) The ALJ may sanction a person, including any party or
representative for:
(1) Failing to comply with an order, rule, or procedure governing
the proceeding;
(2) Failing to prosecute or defend an action; or
(3) Engaging in other misconduct that interferes with the speedy,
orderly, or fair conduct of the hearing.
(b) Any such sanction, including but not limited to, those listed
in paragraphs (c), (d), and (e) of this section, must reasonably relate
to the severity and nature of the failure or misconduct.
(c) When a party fails to comply with an order, including an order
for taking a deposition, the production of evidence with in the
party's control, or a request for admission, the ALJ may:
(1) Draw an inference in favor of the requesting party with
regard to the information sought;
(2) In the case of requests for admission, deem each matter of
which an admission is requested to be admitted;
(3) Prohibit the party failing to comply with such order from
introducing evidence concerning, or otherwise relying upon, testimony
relating to the information sought; and
(4) Strike any part of the related pleading or other submissions
of the party failing to comply with such request.
(d) If a party fails to prosecute or defend an action under this
subpart commenced by service of a notice of hearing, the ALJ may
dismiss the action or may issue an initial decision imposing penalties
and assessments.
(e) The ALJ may refuse to consider any motion, request, response,
brief, or other document which is not filed in a timely fashion.
[Codified to 12 C.F.R. § 308.528]
[Section 308.528 added at 66 Fed. Reg. 9195, February 7, 2001,
effective March 9, 2001]
§ 308.529 The hearing and burden of proof.
(a) The ALJ will conduct a hearing on the record in order to
determine whether the defendant is liable for a civil penalty or
assessment under
§ 308.502 of this
subpart, and, if so, the appropriate amount of any such civil penalty
or assessment considering any aggravating or mitigating factors.
(b) The FDIC must prove defendant's liability and any aggravating
factors by a preponderance of the evidence.
(c) The defendant must prove any affirmative defenses and any
mitigating factors by a preponderance of the evidence.
(d) The hearing will be open to the public unless otherwise ordered
by the ALJ for good cause shown.
[Codified to 12 C.F.R. § 308.529]
[Section 308.529 added at 66 Fed. Reg. 9196, February 7,
2001, effective March 9, 2001]
{{2-28-01 p.2166.34}}
§ 308.530 Determining the amount of penalties and assessments.
(a) In determining an appropriate amount of civil penalties and
assessments, the ALJ and the Board, upon appeal, should evaluate any
circumstances that mitigate or aggravate the violation and should
articulate in their opinions the reasons that support the penalties and
assessments they impose. Because of the intangible costs of fraud, the
expense of investigating such conduct, and the need to deter others who
might be similarly tempted, ordinarily double damages and a significant
civil penalty should be imposed.
(b) Although not exhaustive, the following factors are among those
that may influence the ALJ and the Board in determining the amount of
penalties and assessments to impose with respect to the misconduct
(i.e., the false, fictitious, or fraudulent claims or
statement) charged in the complaint:
(1) The number of false, fictitious, or fraudulent claims or
statements;
(2) The time period over which such claims or statements were
made;
(3) The degree of the defendant's culpability with respect to
the misconduct;
(4) The amount of money or the value of the property, services,
or benefit falsely claimed;
(5) the value of the government's actual loss as a result of the
misconduct, including foreseeable consequential damages and the costs
of investigation;
(6) The relationship of the amount imposed as civil penalties to
the amount of the government's loss;
(7) The potential or actual impact of the misconduct upon
national defense, public health or safety, or public confidence in the
management of government programs and operations, including
particularly the impact on the intended beneficiaries of such programs;
(8) Whether the defendant has engaged in a pattern of the same or
similar misconduct;
(9) Whether the defendant attempted to conceal the misconduct;
(10) The degree to which the defendant has involved others in the
misconduct or in concealing it;
(11) Where the misconduct of employees or agents is imputed to
the defendant, the extent to which the defendant's practices fostered
or attempted to preclude such misconduct;
(12) Whether the defendant cooperated in or obstructed an
investigation of the misconduct;
(13) Whether the defendant assisted in identifying and
prosecuting other wrongdoers;
(14) The complexity of the program or transaction, and the degree
of the defendant's sophistication with respect to it, including the
extent of the defendant's prior participation in the program or in a
similar transaction;
(15) Whether the defendant has been found, in any criminal,
civil, or administrative proceeding to have engaged in similar
misconduct or to have dealt dishonestly with the Government of the
United States or of a state, directly or indirectly; and
(16) The need to deter the defendant and others from engaging in
the same or similar misconduct.
(c) Nothing in this section will be construed to limit the ALJ or
the Board from considering any other factors that in any given case may
mitigate or aggravate the offense for which penalties and assessments
are imposed.
(d) Civil money penalties that are assessed pursuant to this
subpart are subject to adjustment on a four-year basis to account for
inflation as required by section 4 of the Federal Civil Penalties
Inflation Adjustment Act of 1990, as amended (codified at 28 U.S.C.
2461, note) (see also
12 CFR
308.132(c)(3)(xv)).
[Codified to 12 C.F.R. § 308.530]
[Section 308.530 added at 66 Fed. Reg. 9196, February 7, 2001,
effective March 9, 2001]
§ 308.531 Location of hearing.
(a) The hearing may be held:
{{2-28-01 p.2166.35}}
(1) In any judicial district of the United States in which the
defendant resides or transacts business;
(2) In any judicial district of the United States in which the
claim or statement at issue was made; or
(3) In such other place as may be agreed upon by the defendant
and the ALJ.
(b) Each party will have the opportunity to present argument with
respect to the location of the hearing.
(c) the hearing will be held at the place and at the time ordered
by the ALJ.
[Codified to 12 C.F.R. § 308.531]
[Section 308.531 added at 66 Fed. Reg. 9196, February 7, 2001,
effective March 9, 2001]
§ 308.532 Witnesses.
(a) Except as provided in paragraph (b) of this section, testimony
at the hearing will be given orally by witnesses under oath or
affirmation.
(b) At the discretion of the ALJ, testimony may be admitted in the
form of a written statement or deposition. The party offering a written
statement must provide all other parties with a copy of the written
statement along with the last known address of the witness. Sufficient
time must be allowed for other parties to subpoena the witness for
cross-examination at the hearing. Prior written statements and the
deposition transcripts of witnesses identified to testify at the
hearing must be exchanged as provided in
§ 308.521(a) of this
subpart.
(c) The ALJ will exercise reasonable control over the mode and
order of interrogating witnesses and presenting evidence so as to:
(1) Make the interrogation and presentation effective for the
ascertainment of the truth;
(2) Avoid needless consumption of time; and
(3) Protect witnesses from harassment or undue embarrassment.
(d) The ALJ will permit the parties to conduct such
cross-examination as may be required for a full and true disclosure of
the facts.
(e) At the discretion of the ALJ, a witness may be cross-examined
on matters relevant to the proceeding without regard to the scope of
his or her direct examination. To the extent permitted by the ALJ,
cross-examination on matters outside the scope of direct examination
will be conducted in the manner of direct examination and may proceed
by leading questions only if the witness if a hostile witness, an
adverse party, or a witness identified with an adverse party.
(f) Upon motion of any party, the ALJ will order witnesses excluded
so that they cannot hear the testimony of other witnesses. This rule
does not authorize exclusion of:
(1) A party who is an individual;
(2) In the case of a party that is not an individual, an officer
or employee of the party appearing for the entity pro se or designated
by the party's representative; or
(3) An individual whose presence is shown by a party to be
essential to the presentation of its case, including an individual
employed by the Corporation engaged in assisting the representative for
the Corporation.
[Codified to 12 C.F.R. § 308.532]
[Section 308.532 added at 66 Fed. Reg. 9196, February 7, 2001,
effective March 9, 2001]
§ 308.533 Evidence.
(a) The ALJ will determine the admissibility of evidence.
(b) Except as provided in this subpart, the ALJ will not be bound
by the Federal Rules of Evidence (28 U.S.C. App.). However, the ALJ may
apply the Federal Rules of Evidence where appropriate, e.g., to exclude
unreliable evidence.
(c) the ALJ will exclude irrelevant and immaterial
evidence.
{{2-28-01 p.2166.36}}
(d) Although relevant, evidence, may be excluded if its probative
value is substantially outweighed by the danger of unfair prejudice,
confusion of the issues, or by considerations of undue delay or
needless presentation of cumulative evidence.
(e) Although relevant, evidence may be excluded if it is privileged
under federal law.
(f) Evidence concerning offers of compromise or settlement will be
inadmissible to the extent provided in rule 408 of the Federal Rules of
Evidence.
(g) The ALJ will permit the parties to introduce rebuttal witnesses
and evidence.
(h) All documents and other evidence offered or taken for the
record must be open to examination by all parties, unless otherwise
ordered by the ALJ pursuant to
§ 308.523 of this
subpart.
[Codified to 12 C.F.R. § 308.533]
[Section 308.533 added at 66 Fed. Reg. 9197, February 7, 2001,
effective March 9, 2001]
§ 308.534 The record.
(a) The hearing will be recorded by audio or videotape and
transcribed. Transcripts may be obtained following the hearing from the
ALJ at a cost not to exceed the actual cost of duplication.
(b) The transcript of testimony, exhibits, and other evidence
admitted at the hearing, and all papers and requests filed in the
proceeding constitute the record for the decision by the ALJ and the
Board.
(c) The record may be inspected and copied (upon payment of a
reasonable fee) by anyone, unless otherwise ordered by the ALJ pursuant
to § 308.523 of this
subpart.
[Codified to 12 C.F.R. § 308.534]
[Section 308.534 added at 66 Fed. Reg. 9197, February 7, 2001,
effective March 9, 2001]
§ 308.535 Post-hearing briefs.
The ALJ may require the parties to file post-hearing briefs. In any
event, any party may file a post-hearing brief. The ALJ will fix the
time for filing such briefs, not to exceed 60 days from the date the
parties receive the transcript of the hearing or, if applicable, the
stipulated record. Such briefs may be accompanied by proposed findings
of fact and conclusions of law. The ALJ may permit the parties to file
reply briefs.
[Codified to 12 C.F.R. § 308.535]
[Section 308.535 added at 66 Fed. Reg. 9197, February 7, 2001,
effective March 9, 2001]
§ 308.536 Initial decision.
(a) The ALJ will issue an initial decision based only on the
record, which will contain findings of fact, conclusions of law, and
the amount of any penalties and assessments imposed.
(b) The findings of fact will include a finding on each of the
following issues:
(1) Whether the claims or statements identified in the complaint,
or any portions of such claims or statements, violate
§ 308.502 of this
subpart; and
(2) If the person is liable for penalties or assessments, the
appropriate amount of any such penalties or assessments considering any
mitigating or aggravating factors that he or she finds in the case,
such as those described in
§ 308.530 of this
subpart.
(c) The ALJ will promptly serve the initial decision on all parties
within 90 days after the time for submission of post-hearing briefs and
reply briefs (if permitted) has expired. The ALJ will at the same time
serve all parties with a statement describing the right of any
defendant determined to be liable for a civil penalty or assessment to
file a motion for reconsideration with the ALJ or a notice of appeal
with the Board. If the ALJ fails to meet the deadline contained in this
paragraph, he or she will notify the parties of the reason for the
delay and will set a new deadline.
{{2-28-01 p.2166.37}}
(d) Unless the initial decision of the ALJ is timely appealed to
the Board, or a motion for reconsideration of the initial decision is
timely filed, the initial decision will constitute the final decision
of the Board and will be final and finding on the parties 30 days after
it is issued by the ALJ.
[Codified to 12 C.F.R. § 308.536]
[Section 308.536 added at 66 Fed. Reg. 9197, February 7, 2001,
effective March 9, 2001]
§ 308.537 Reconsideration of initial decision.
(a) Except as provided in paragraph (d) of this section, any party
may file a motion for reconsideration of the initial decision within 20
days of receipt of the initial decision. If service is made by mail,
receipt will be presumed to be 5 days from the date of mailing in the
absence of proof to the contrary.
(b) Every motion for reconsideration must set forth the matters
claimed to have been erroneously decided and the nature of the alleged
errors. The motion must be accompanied by a supporting brief.
(c) Responses to the motions will be allowed only upon order of the
ALJ.
(d) No party may file a motion for reconsideration of an initial
decision that has been revised in response to a previous motion for
reconsideration.
(e) The ALJ may dispose of a motion for reconsideration by denying
it or by issuing a revised initial decision.
(f) If the ALJ denies a motion for reconsideration, the initial
decision will constitute the final decision of the FDIC and will be
final and binding on all parties 30 days after the ALJ denies the
motion, unless the final decision is timely appealed to the Board in
accordance with § 308.538 of this subpart.
(g) If the ALJ issues a revised initial decision, that decision
will constitute the final decision of the FDIC and will be final and
binding on the parties 30 days after it is issued, unless it is timely
appealed to the Board in accordance with § 308.538 of this subpart.
[Codified to 12 C.F.R. § 308.537]
[Section 308.537 added at 66 Fed. Reg. 9197, February 7, 2001,
effective March 9, 2001]
§ 308.538 Appeal to the Board of Directors.
(a) Any defendant who has filed a timely answer and who is
determined in an initial decision to be liable for a civil penalty or
assessment may appeal such decision to the Board by filing a notice of
appeal with the Board in accordance with this section.
(b)(1) No notice of appeal may be filed until the time period for
filing a motion for reconsideration under § 308.537 of this subpart
has expired.
(2) If a motion for reconsideration is timely filed, a notice of
appeal must be filed within 30 days after the ALJ denies the motion or
issues a revised initial decision, whichever applies.
(3) If no motion for reconsideration is timely filed, a notice of
appeal must be filed within 30 days after the ALJ issues the initial
decision.
(4) The Board may extend the initial 30-day period for an
additional 30 days if the defendant files with the Board a request for
an extension within the initial 30-day period and shows good cause.
(c) If the defendant files a timely notice of appeal with the
Board, the ALJ will forward the record of the proceeding to the Board.
(d) A notice of appeal will be accompanied by a written brief
specifying exceptions to the initial decision and reasons supporting
the exceptions.
(e) The representative for the Corporation may file a brief in
opposition to exceptions within 30 days of receiving the notice of
appeal and accompanying brief.
(f) There is no right to appear personally before the Board.
(g) There is no right to appeal any interlocutory ruling by the
ALJ.
{{2-28-01 p.2166.38}}
(h) In reviewing the initial decision, the Board will not consider
any objection that was not raised before the ALJ unless a demonstration
is made of extraordinary circumstances causing the failure to raise the
objection.
(i) If any party demonstrates to the satisfaction of the Board that
additional evidence not presented at such hearing is material and that
there were reasonable grounds for the failure to present such evidence
at such hearing, the Board will remand the matter to the ALJ for
consideration of such additional evidence.
(j) The board may affirm, reduce, reverse, compromise, remand, or
settle any penalty or assessment determined by the ALJ in any initial
decision.
(k) The Board will promptly serve each party to the appeal with a
copy of the decision of the Board and a statement describing the right
of any person determined to be liable for a penalty or an assessment to
seek judicial review.
(l) Unless a petition for review is filed as provided in 31 U.S.C.
3805 after a defendant has exhausted all administrative remedies under
this subpart and within 60 days after the defendant with a copy of the
Board's decision, a determination that a defendant is liable under
§ 308.502 of this
subpart is final and is not subject to judicial review.
[Codified to 12 C.F.R. § 308.538]
[Section 308.538 added at 66 Fed. Reg. 9197, February 7, 2001,
effective March 9, 2001]
§ 308.539 Stays ordered by the Department of Justice.
If at any time the Attorney General or an Assistant Attorney General
designated by the Attorney General transmits to the Board a written
finding that continuation of the administrative process described in
this subpart with respect to a claim or statement may adversely affect
any pending or potential criminal or civil action related to such claim
or statement, the Board will stay the process immediately. The Board
may order the process resumed only upon receipt of the written
authorization of the Attorney General.
[Codified to 12 C.F.R. § 308.539]
[Section 308.539 added at 66 Fed. Reg. 9198, February 7, 2001,
effective March 9, 2001]
§ 308.540 Stay pending appeal.
(a) An initial decision is stayed automatically pending disposition
of a motion for reconsideration or of an appeal to the Board.
(b) No administrative stay is available following a final decision
of the Board.
[Codified to 12 C.F.R. § 308.540]
[Section 308.540 added at 66 Fed. Reg. 9198, February 7, 2001,
effective March 9, 2001]
§ 308.541 Judicial review.
Section 3805 of Title 31, United States Code, authorizes judicial
review by an appropriate United States District Court of a final
decision of the Board imposing penalties or assessments under this
subpart and specifies the procedures for such review.
[Codified to 12 C.F.R. § 308.541]
[Section 308.541 added at 66 Fed. Reg. 9198, February 7, 2001,
effective March 9, 2001]
§ 308.542 Collection of civil penalties and assessments.
Sections 3806 and 3808(b) of Title 31, United States Code, authorize
actions for collection of civil penalties and assessments imposed under
this subpart and specify the procedures for such actions.
[Codified to 12 C.F.R. § 308.542]
[Section 308.542 added at 66 Fed. Reg. 9198, February 7,
2001, effective March 9, 2001]
{{8-29-03 p.2166.39}}
§ 308.543 Right to administrative offset.
The amount of any penalty or assessment which has become final, or
for which a judgment has been entered under § 308.541 or § 308.542
of this subpart, or any amount agreed upon in a compromise or
settlement under § 308.545 of this subpart, may be collected by
administrative offset under 31 U.S.C. 3716, except that an
administrative offset may not be made under this section against a
refund of an overpayment of federal taxes, then or later owing by the
United States to the defendant.
[Codified to 12 C.F.R. § 308.543]
[Section 308.543 added at 66 Fed. Reg. 9198, February 7, 2001,
effective March 9, 2001]
§ 308.544 Deposit in Treasury of United States.
All amounts collected pursuant to this subpart will be deposited as
miscellaneous receipts in the Treasury of the United States, except as
provided in 31 U.S.C. 3806(g).
[Codified to 12 C.F.R. § 308.544]
[Section 308.544 added at 66 Fed. Reg. 9198, February 7, 2001,
effective March 9, 2001]
§ 308.545 Compromise or settlement.
(a) Parties may make offers of compromise or settlement at any
time.
(b) The reviewing official has the exclusive authority to
compromise or settle a case under this subpart at any time after the
date on which the reviewing official is permitted to issue a complaint
and before the date on which the ALJ issues an initial decision.
(c) The Board has exclusive authority to compromise or settle a
case under this subpart any time after the date on which the ALJ issues
an initial decision, except during the pendency of any review under
§ 308.541 of this subpart or during the pendency of any action to
collect penalties and assessments under § 308.542 of this subpart.
(d) The Attorney General has exclusive authority to compromise or
settle a case under this subpart during the pendency of any review
under § 308.541 of this subpart or of any action to recover penalties
and assessments under 31 U.S.C. 3806.
(e) The investigating official may recommend settlement terms to
the reviewing official, the Board, or the Attorney General, as
appropriate. The reviewing official may recommend settlement terms to
the Board, or the Attorney General, as appropriate.
(f) Any compromise or settlement must be in writing.
[Codified to 12 C.F.R. § 308.545]
[Section 308.545 added at 66 Fed. Reg. 9198, February 7, 2001,
effective March 9, 2001]
§ 308.546 Limitations.
(a) The notice of hearing with respect to a claim or statement will
be served in the manner specified in
§ 308.507 of this
subpart within 6 years after the date on which such claim or statement
is made.
(b) If the defendant fails to file a timely answer, service of
notice under
§ 308.509(b) of this
subpart will be deemed a notice of a hearing for purposes of this
section.
(c) The statute of limitations may be extended by agreement of the
parties.
[Codified to 12 C.F.R. § 308.546]
[Section 308.546 added at 66 Fed. Reg. 9198, February 7, 2001,
effective March 9, 2001]
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