Federal law defines fraud as any intentional deception or misrepresentation used to benefit yourself or someone else. The federal government, through its prosecutors in the United States Attorneys' Office, penalizes various kinds of fraud specifically identified under federal laws. These laws identify specific types of fraud crimes, each of which has specific penalties associated with them. The crimes presented here is by no means exhaustive; there is a wide range of federal, as well as state, fraud crimes.
Mail and Wire Fraud
The federal government makes it a crime to use the mail or any wire communications technology, including the Internet, as part of a scheme to defraud. Because of the broad nature of these laws, mail and wire fraud are commonly charged in a wide range of cases. For example, people who pay a bribe or kickback to government officials typically use the phone or mail a letter at some point in the process. Because of this, federal prosecutors can charge the person with wire fraud or mail fraud in addition to bribery, corruption, or any other charges that may apply.
Tax fraud, commonly known as tax evasion, occurs whenever a taxpayer attempts to avoid paying federal income taxes. Tax fraud can take any number of forms, from overestimating business expenses, to underreporting income, or even not filing a tax return. Tax fraud is very common, resulting in approximately $2 trillion in unreported or untaxed income every year, according to the IRS.
Securities and commodities markets are regulated by the federal government. There are a wide range of fraudulent activities that fall under the category of securities fraud, such as Ponzi or pyramid schemes, investment schemes, broker embezzlement, and foreign currency fraud. These types of frauds typically occur when a brokerage company, investment bank, or individual stockbroker deceives clients or investors by providing false or misrepresented information. It also occurs when people trade stock or other securities using information that is not available to the public, a practice known as insider trading.
Medicaid and Medicare Fraud
Medicare and Medicaid provide health insurance to millions of Americans. These government programs are paid for, at least in part, by the federal government, and they are often the target of fraudulent claims. Medicare and Medicaid fraud typically occurs when a healthcare company or individual provider attempts to collect illegitimate reimbursements from the government, such as by over-billing for healthcare services or by performing unnecessary procedures.
Federal fraud crimes are typically charged as felony offenses, though misdemeanor convictions are possible in certain situations. The difference between a misdemeanor offense and a felony offense is that a felony has a potential sentence of a year or more in prison, while misdemeanor convictions can result in a prison sentence of up to one year. There are a wide range of potential penalties for any federal fraud conviction, though they typically involve prison, fines, or probation.
- Prison. Someone convicted of a federal fraud crime faces serving time in a federal prison.The potential prison sentences associated with any fraud conviction differs significantly, and can range from 0 to 6 months up to 20 to 30 years per violation. The amount of time sentenced will depend upon a person's criminal history, as well as the particular law violated. Alternatives, such as home confinement, are also possible in some situations.
- Fines. The fine for any conviction of a federal fraud law can be extremely high. A conviction for mail or wire fraud, for example, can result in a $250,000 fine for each violation. Fraud with a wide ranging impact and high dollar value, such as fraud committed by companies or organizations, can result in fines of tens of millions of dollars or more.
- Restitution.When someone is convicted of federal fraud the court will usually order restitution as part of the sentence. Restitution is paid by perpetrators of fraud to the victims in order to compensate them for their losses. Restitution must be paid in addition to any fines, and payment of fines and restitution are usually made a condition of probation.
- Probation. For some fraud crimes, it's possible to never have to serve any prison time at all. A federal judge can impose a federal probation sentence individually or in combination with a fine or a term of imprisonment in some situations. Those sentenced to federal probation must report to a court or probation officer on a regular basis. They must also comply with a range of other probation conditions, such as submitting regular reports to the probation officer, following his or her instructions, not using or possessing any drugs, not associating with anyone convicted of a felony, as well as other conditions as required by the court and the probation office.
Talk to a Lawyer
A federal fraud charge is an extremely serious matter, one that requires the expertise of a qualified attorney. The United States government has nearly endless resources at its disposal and can devote a lot of time and effort pursuing a case against you. As soon as you are charged with a federal fraud crime, or learn you are being investigated, you need to speak with the local criminal defense attorney immediately. Find someone who has experience defending cases in federal, and not just state, court. Your attorney will be able to protect your rights during the criminal justice process as well as advise you on what legal options you have.