There are various types of fraud that can be punished under federal law. Generally speaking, fraud refers to intentional deception that has an element of personal gain or that can damage another person. Federal government fraud refers not only to fraud perpetrated by members of the federal government, but fraud committed by other private individuals in connection with the federal government. For example, government contractors may commit fraud in connection with their official duties, while those receiving benefits or other considerations from the federal government may also commit fraud.
Federal fraud laws are defined in U.S. Code Chapter 47. A large number of different types of statements, documents, and transactions related to the federal government can be treated as matters of fraud. Fraud can consist of written documents as well as statements. One of the defining elements of fraud is intent: In general, it is not possible to commit fraud by accident or through negligence. Although it is possible to take a course of action with results similar to fraud without intent, it is generally not possible to prosecute in such matters.
Fraud Crimes & Charges
Federal fraud laws encompass an unusually vast number of different potential crimes. In the broadest sense, they include both written and oral statements, no matter the medium, intended to defraud or confer benefit. Although relative statutes provide for forty different examples, some of the most relevant are as follows:
- Possession of false papers to defraud the United States through counterfeited or falsified documents of any kind.
- Using counterfeit documents of any kind to obtain shares of any public stocks of the United States, or to transfer, assign, or sell annuities, dividends, wages, or other assets of the United States.
- Using documents or false statements of any kind to defraud the Federal Deposit Insurance Corporation or to obtain unlawful benefits from any Federal Deposit Insurance Corporation transaction.
- Fraudulent title records or other records pertaining to property rightfully owned, possessed, leased, or under the custodianship or protection of the United States for the purpose of transferring or ameliorating ownership in any way.
Generally speaking, a charge of fraud may be possible in any case where any falsified or counterfeit document was willfully used to abridge the United States’ ownership in any tangible asset to the benefit of the defrauding party. Because there are so many different types of fraud, the specifics of sentencing may be different for each one.
Punishment for fraud depends in large part upon the amount of material benefit that the defrauding individual gained as a result of their activities. Generally speaking, the focus of fraud prosecution is to make equitable restitution, which includes the complete seizure of any assets or properties that were secured by fraud. Federal fraud prosecution can include such expedients as garnishing wages or compelling the sale of assets in order to recover losses.
Fraud Sentencing Guidelines
Although restitution is the most crucial consideration for most forms of fraud prosecution, a prison sentence is not out of the question. Federal sentencing guidelines for fraud make use of a point system that begins with six points as the “Base Offense Level” and increases the level based on the level of loss and aggravating factors. Imprisonment is informed by this score.
Fraud Statute of Limitations
Under the provisions of 18 USC 3282, the limitation for prosecution of any noncapital offense at the federal level is 60 months or five years. Noncapital offenses include the vast majority of federal offenses that do not involve violence.
Fraud cases have been at the heart of some of the most serious economic depressions in recent memory. Some of the most memorable fraud cases include:
- In 2013, Bank of America was found liable for fraud after purchasing Countrywide Financial, an organization notorious for risky loans and other allegedly fraudulent practices that contributed to the 2008 financial downturn. The most notorious of these was a risky loan program targeting federal assets and called “The Hustle.” (Huffington Post)
- In June 2013, Joseph Richards of Virginia was found responsible for a scheme that allegedly allowed himself and other conspirators to unlawfully secure more than $31 million in government contracts that were earmarked for minority-owned businesses. He was sentenced to more than two years in federal prison. (Washington Post)
Fraud Quick Links & References
- Government Fraud Charges Overview and Related Statues from Cornell University Law
- Federal Government Contractor Fraud and Whistleblowing Laws to Stop / Prevent Fraud
- Recognizing and Avoiding Federal Grant Fraud and Other Forms of Grant Fraud
- Department of Defense Fraud Definition and Federal Fraud Investigation Resources
- Ongoing Efforts to Root Out Federal Contractor Fraud and Similar Federal Crimes
- Comprehensive List of all the Activities Defined as Fraud Under Federal Statutes
- Sentencing Guidelines for Federal Crimes Involving Fraud or Deceit
Government Fraud Laws by State
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming