18 U.S.C. Section 1031
In 1988, a new criminal offense was created under The Major Fraud Act. The Act made it illegal to defraud the U.S. government or to obtain money or property by means of a false pretense or representation. The act applies specifically to private parties, including suppliers and subcontractors of the government.
In 1993, the vagueness of the statute was challenged in the 2nd Circuit case U.S. v. Nadi. The Court upheld the statute and since, it has become a useful tool for the Department of Justice in prosecuting major fraud cases. Within the DOJ, the Fraud Section of the Criminal Division prosecutes major fraud against the U.S. Under the so-called “bounty hunter provision”, the DOJ can even make payments to individuals providing information in a major fraud case.
Major fraud is treated quite harshly. Violation of the law has a maximum penalty of 10 years imprisonment as well as heavy fines. While the amount of the fine varies greatly with the amount defrauded, the statute authorizes a maximum of $10 million in cases of multiple violations and a maximum of $5 million for each individual count. In addition, investigation for major fraud can place you at risk of other criminal charges including mail and wire fraud and conspiracy.
If you have been charged with or are under investigation for major fraud against the United States, contact us, the Blanch Law Firm immediately at 212-736-5170.