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Penalties in Government Contracting Fraud Cases in DC

Government contracting fraud is a serious charge that can result in large fines and jail time. Below, a government fraud lawyer answers questions regarding federal government contracting fraud.

What Are The Penalties For Fraud in Government Contracting?

All of these various offenses under the US Code are subject to federal voluntary sentencing guidelines. Often with these government contracting fraud cases, the accused is a legitimate business owner. He/she was reputable enough to attain a government contract in the first place and went through all of the hoops that are required to screen and to vet contractors. So you’re talking about a person who likely has no prior criminal history.  All of that will be taken into consideration in terms of what type of sentence they will receive. But you will often see sentences for shorter periods of incarceration in government contracting fraud than you will for some of the other more serious offenses under the federal code.

The maximum penalty for major fraud against the government in violation of 18 U.S.C. Section 1031 is 10 years’ incarceration and/or a fine of up to $1,000,000.00.  The maximum penalty for violations of 18 U.S.C. Section 287, the false claims statute, is 5 years in prison and/or a fine.  These penalties maybe imposed concurrently, meaning to be served at the same time or consecutively meaning one after the other for each count the accused is convicted by the jury.

What Are The Long Term Implications of a Fraud Conviction?

In the government contracting context, a person could be ordered to pay large monetary penalties for the alleged amount of loss that was taken from the government. Additionally, you can be debarred or no longer allowed to contract with the government in the future. For some companies, that can have devastating consequences. For example, if you are a military defense contractor like Lockheed Martin or Honeywell for example and you do all of or the majority of your business with the government, this could ruin your business.  If such a contractor were convicted of government contracting fraud, then their entire business model would be upset by these convictions. In such a scenario, it would be almost impossible for such a company to carry out their business plan, which is developing weapons and various technologies that can be used in military services.  Thus for some contractors, debarment from contracting with the government would mean financial ruin.

What Makes The Government Contracting Fraud Cases Unique in Terms of The Process of The Cases?

Well one of the things that makes it unique is often the government will have the ability to use documents that were authorized by the clients. The documents will have the client’s signature. They were submitted to the government by the client. It becomes unique because of the involvement between your client’s business and/or a government agency or a government contractor or subcontractor. It becomes more difficult to offer explanations as to why this document bears my client’s signature and contains false information if he/she was not trying to commit fraud.