Review of Government Program Fraud Laws and Defenses
Federal program fraud is generally described as the theft of funds from a federal program. This type of fraud is aggressively prosecuted by the government and a conviction carries harsh penalties.
18 U.S.C. 666 is the primary federal statute used by prosecutors to indict someone of theft or embezzlement over $5,000 of a program that receives federal funding and under the control of a government entity.
However, there are also other federal statutes that are used by prosecutors to charge somebody with program fraud, including conspiracy to defraud the government, false statements to a federal agency, false claims, wire fraud, and mail fraud.
The U.S. government takes fraud quite seriously. If you've been accused of committing such a crime, you may very well be feeling anxious and afraid.
Regardless of the allegations and evidence, you have legal rights and entitled to due process protection under the law.
Knowledge is power, though. On this page, you'll find a basic guide from our Los Angeles criminal defense lawyers to understanding government program fraud, how they prosecute it, and how to defend yourself.
What is Government Program Fraud?
Federal program fraud is defined as the theft or fraud of a federally funded program.
The primary goal, obviously, is to get money from the government or to fraudulently make an agency to take a specific action by use of deception or fraud it would not normally take.
As with any type of fraud offense, this federal crime requires an intent to defraud, which means it must be proven by the prosecutor the defendant acted with a specific intent and knowledge to defraud an entity to receive a financial benefit they were not entitled.
A federally funded program includes an entity that has received a grant, entitlement, loan, or other type of funding. There are some administrative processes that are supposed to protect these federal programs, but they don't always detect or prevent the fraud from occurring.
Federal program fraud commonly results is a significant loss and the government will frequently seek criminal and civil actions against anyone they believe is responsible for the fraud.
Theft or Bribery of Programs Receiving Federal Funds - 18 U.S.C. § 666
18 U.S.C. § 666 is quite clear about how the government defines program fraud. This statute addresses the investigation and prosecution of these crimes.
A person guilty of fraud either:
- “embezzles, steals, obtains using fraud, or without authority knowingly converts to the use of anyone other than the rightful owner or intentionally misapplies, property, or;”
- “corruptly solicits or demands for someone's benefit, or accepts, agrees to accept, something of value from anyone, with intent to be influenced or rewarded connected with any business, transaction of such organization, government, or agency involving anything of value.”
Put simply, this statute gives federal law enforcement agencies and prosecutors a tool to go after anyone who steals or embezzles from the government or an entity receiving federal funding.
The only restrictions regarding this law are that the value of the fraud itself must be at least $5,000, and the government program in question must have received at least $10,000 in federal funds during the given year.
Otherwise, the statue is broad and covers all manner of deceptions. In fact, one of the first things you need to know is that program fraud isn't a single type of offense. Rather there are countless ways to defraud the government.
Examples of Federal Program Fraud
A federal program fraud offense can occur in a variety of forms, including the following below:
- Bid rigging: The type of fraud involves avoiding or eliminating fair competition in a government contract bid to artificially drive up the price of the contract.
- Defense contractor fraud: Defense contractor fraud can include over-charging the government for products or services or utilizing inferior materials as part of a manufacturing process.
- Grant/ research fraud: Grant/ research fraud might involve falsifying grant application materials, misappropriating grant funds, even submitting fabricated test results.
- Medicare fraud: Charging the government for non-existent patients or obtaining health care using a forged Medicare card are both examples of this type of fraud.
Forging someone's signature on a social security check, misusing student loan funds, claiming welfare benefits for children you don't have: all of these involve some form of program fraud.
Common Federal Statutes Used for Prosecution
A number of federal offices are empowered to investigate program fraud, including the Federal Bureau of Investigation (FBI), the United States Department of Justice (DOJ), and the Inspector General Offices of various programs.
While these agencies most often prosecute fraud violations under 18 U.S. Code § 666, they may use other statutes as well:
- 18 U.S.C. 287 - making false, fictitious claims to the United States,
- 18 U.S.C. 371 - conspiracy to defraud the United States,
- 18 U.S.C. 1001 - false documents or false statements to a federal agency,
- 18 U.S.C. 1341 - committing mail fraud,
- 18 U.S.C. 1343 - committing wire fraud,
- 31 U.S.C. § 3279 - federal civil false claims act.
The penalties for these offenses can include up to ten years of prison time in addition to any fines.
A conviction can also make you ineligible to do future business with the government. That means, if you are a medical professional, you could be barred from accepting clients with Medicare and Medicaid.
Government Program Fraud Defenses
If you've been accused of government program fraud, all is not lost. There are many strong defense strategies available in such cases.
In contract fraud cases, for instance, the government must prove that you made contact with a specific government agency and either lied about the services you could provide, billed for services you didn't provide, or never provided services at all.
To do this, they must demonstrate beyond a reasonable doubt that you committed these actions knowingly.
That's not always easy to do. Of course, there are no single strategies that will work in every case.
The right defense for your case will depend on a number of factors, including what specific offense the government has charged you with and the particulars of that offense.
Only an attorney well-versed in government fraud cases can craft the right strategy for you.
Finally, you should know that if the government calls you in for an interview, you won't know what they have against you.
They may very well be looking for documents and information that can help them build their case.
Remember that it's almost always best to invoke your first amendment right not to speak. Instead of dealing with the problem itself, contact an attorney who can speak on your behalf and protect your rights.
Since the penalties for a conviction can be severe, you need to act quickly to have the best chance at the best possible outcome.
We might be able to negotiate with the federal prosecutor to negotiate a favorable outcome, but are prepared to take the case to trial if necessary.
Eisner Gorin LLP is based in Los Angeles County, but our criminal defense lawyers represent people in California and throughout the United States who have been accused of any type of federal offense, including program fraud.
Contact our office for an initial consultation at (310) 328-3776.
If you have one phone call from jail, call us! If you are facing criminal charges,