What is Federal Program Fraud?
This is the term given to the form of white collar crime perpetrated in areas involving federal funds. It does not necessarily mean that federal funds are actually stolen, only that federal funds were involved in some manner. The crime’s connection to federal funds is often tenuous, giving good criminal attorneys arguments as to why the charges should not apply.
18 U.S.C. §666 is the federal statute that makes it a federal crime to steal federal money distributed through a federal program. In addition, this statute criminalizes the misapplication of property or services from State or local governments or other entity that receives federal money.
To secure a charge or conviction for Federal Programs Fraud, 18 U.S.C. §666 requires federal prosecutors to show:
- The defendant is an agent of an organization or of a state, local or Indian tribal government;
- That the organization, government or agency receives benefits in excess of $10,000 in a one-year period pursuant to a Federal program involving a grant, a contract, a subsidy, a loan, a guarantee, insurance, or another form of Federal assistance;
- That the Defendant embezzled, stole, obtained by fraud, or otherwise without authority knowingly converted to the use of any person other than the rightful owner, or intentionally misapplied property that has a value of more than $5,000; and
- The property was owned by or under the care, custody or control of such organization, government or agency.
It is clear that this statute was intended to apply to the actual theft of federal funds provided to any organization or state or municipal government. The defenses often raised in such federal programs fraud cases include:
- Did the organization receive federal funds?
- Was the defendant an agent of the organization?
- Did the defendant knowingly take federal funds or knowingly misapply property?
- Was there a legitimate purpose for the Defendant to take the federal funds or use the property?
However, prosecutors have extended the federal programs fraud statute to other cases, such as public corruption and bribery cases. Their theory is that an elected official, as an agent of a state or municipal government that receives money from the federal government (through highway funds, or school funds) commits federal programs fraud by selling their influence or their vote. Whether this statute was intended to apply to such behavior remains a point of contention among federal programs fraud attorneys.
At Boles Holmes White, we have experience in representing those charged with federal programs fraud, and have obtained “not guilty” verdicts on these charges. If you are the target of a federal programs fraud charge or if you’ve been indicted criminally, give us a call. Whether you are located in Alabama, New York, the District of Columbia or anywhere in the country, our federal programs fraud attorneys would like to help you.