Government fraud covers a variety of offenses that use deception to divest the government of money. Because the repercussions are usually felt by the taxpayer, these crimes are punished to the fullest extent of the law, with both civil and criminal charges being laid.
- Types of Government Fraud:
● Procurement fraud: When a company uses bribery to win a lucrative contract even if they did not make the most advantageous bid, it is procurement fraud. Providing kickbacks, inflating costs, and billing for incomplete work are other examples.
● False claims: Under the Federal False Claims Act, it is illegal to make a fraudulent claim in order to defraud the government, primarily with respect to Social Security, healthcare, and defense contracts.
● Medicare / Medicaid fraud: This type of fraud occurs when healthcare companies inflate their costs, request reimbursement for procedures or tests that were never made, or otherwise try to get money for nonexistent services.
- State Penalties:
Although most cases of government fraud are prosecuted at the federal level, NYS Penal Code 200 covers the offenses of bribing a public servant and insurance fraud. A person is guilty of Bribery in the Third Degree when they benefit or agree to benefit a public servant in any way that causes the public servant to act in their favor. It is Class D felony punishable by up to 7 years in prison. Bribery in the Second Degree has the same premise, but the benefit involved has to exceed $10,000 in value. It is a Class C felony that can result in up to 15 years in prison. Bribery in the First Degree applies when the goal of the incentive was to influence a public servant with regards to a case involving someone guilty of a Class A felony. This type of bribery is a Class B felony punishable by up to 25 years in prison. Under Section 10 of Article 176, a person is guilty of Insurance Fraud in the Fifth Degree when they commit a fraudulent insurance act, such as misrepresentation to an insurer or withholding / concealing information. It is a class A misdemeanor punishable by up to 1 year in prison. There are five degrees of this offense, with the first degree version involving monetary value of more than $1,000,000. Insurance Fraud in the First Degree is a B felony that can result in a 25-year prison sentence.
- Difference between New York State and Federal statutes:
Bribery of U.S. government officials is covered by 18 USC §201. If convicted, a defendant can spend up to 15 years in a federal prison, pay a fine up to triple the bribe amount, and be disqualified from holding public office in the future.
- Related Crimes:
Commercial bribery, criminal possession of a forged instrument, criminal tax fraud, falsifying business records, grand larceny, offering a false instrument for filing, public corruption, tampering with public records
- When is the best time to act?:
Anyone charged with an offense classifiable as government fraud needs to retain an experienced New York criminal defense attorney immediately, in order to form an effective defense that can protect their rights and minimize the consequences of a conviction.
- Successful Defenses:
Defense can take on different forms depending on the type of fraud and the associated circumstances, but mental disease / defect, false accusation, and proven lack of intent to knowingly commit an illegal act can all be presented as defenses.
- High profile/Government cases:
On May 9, 2012, Anisora Arnaut, Five Stars Truck Sales, LLC, Lisa Devino, and A. Devino Inc. were indicted for filing fraudulent certificates required for the Port Authority of New York and New Jersey’s Truck Replacement Program. Upon being confronted about the fraudulent certificates, the defendants bribed a Port Authority employee. They were charged with Bribery in the Third Degree, Offering a False Instrument for Filing in the First Degree, and Attempted Tampering with Public Records in the First Degree. Lisa Devino and A. Devino Inc. were also charged with Criminal Possession of a Forged Instrument in the Second Degree.