NATIONALLY RECOGNIZED FEDERAL LAWYERS
Last Updated on: 4th January 2024, 08:45 pm
Overview of Federal Fraud Charges in Philadelphia
The federal government takes fraud charges very seriously, and prosecutes cases of mail, wire, tax, and health care fraud aggressively in Philadelphia and across the country. These types of fraud all involve using deception, lies, or intentional misrepresentations to illegally obtain money or property.
Mail and Wire Fraud
Mail and wire fraud charges are common in financial crime cases. These charges involve schemes to defraud someone out of money or property using the mail, telephone calls, text messages, emails, or other electronic communications.
For example, mail fraud would apply if a defendant mailed fraudulent invoices to customers to collect payments for services that were never provided. Wire fraud would apply if they sent similar fraudulent invoices via email or electronic bank transfers.
The federal mail fraud statute (18 USC § 1341) and the federal wire fraud statute (18 USC § 1343) both carry penalties of up to 20 years in prison.
Tax Fraud and Tax Evasion
Tax fraud involves intentionally deceiving the IRS by concealing income, falsely claiming deductions or exemptions, failing to file returns, filing false returns, or otherwise misrepresenting information to illegally reduce one’s tax liability.
Some examples of tax fraud schemes prosecuted in Philadelphia Federal Court have included:
- Business owners hiding cash income and keeping two sets of books
- Doctors and lawyers exaggerating business expenses on their tax returns
- Contractors paying employees “under the table” and not reporting their wages
- Retail store owners purchasing inventory off the books and not reporting it
The main federal tax fraud and evasion laws used in these Philadelphia cases are 26 USC § 7201 (tax evasion) and 26 USC § 7206 (filing a false return). These felonies both carry up to 5 years in prison.
Health Care Fraud
With Philadelphia being a major center of medical research and health care, federal prosecutors also pursue many health care fraud cases here. Some common schemes include:
- Doctors billing for services that were never performed
- Clinics billing for unnecessary tests or procedures
- Pharmacists billing insurers for brand name drugs but providing patients with generics
- Nurses falsifying patient records to show treatments that did not occur
These cases often involve violations of the major federal health care fraud law, 18 USC § 1347, which prohibits knowingly defrauding any health care benefit program. This felony can be punished by up to 10 years imprisonment.
Proving Federal Fraud Charges
To convict on federal fraud charges, prosecutors must prove beyond a reasonable doubt that the defendant knowingly participated in a scheme to defraud and used interstate mail, wires, or electronic communications to further the fraudulent scheme.
They do not need to show that the scheme succeeded or that anyone suffered an actual financial loss. It is enough to show that the intent and actions to defraud were present. Prosecutors will use records such as bank statements, phone records, emails, postal records, and witness testimony to build their case.
Common Defenses in Fraud Cases
Some possible defenses to federal fraud allegations include:
- Lack of intent – Claiming there was no intent to defraud or deceive.
- Good faith – Arguing the defendant acted in good faith based on a misunderstanding or faulty information rather than an intent to defraud.
- Statute of limitations – Federal fraud charges generally must be brought within 5 years of the crime for mail/wire fraud or 6 years for tax/health care fraud.
- Entrapment – Alleging law enforcement induced the defendant to commit a crime they otherwise would not have.
An experienced white collar criminal defense attorney can assess the evidence and determine if any viable defenses may apply.
Penalties for Federal Fraud Convictions in Philadelphia
A federal fraud conviction can result in substantial penalties, including years in prison, massive fines, restitution to victims, asset forfeiture, and collateral consequences impacting one’s career and finances for decades.
Under the United States Sentencing Guidelines, sentences are impacted by the amount of loss and other aggravating factors. Even first-time offenders can face years in prison for fraud schemes causing losses of $100,000 or more.
In addition to imprisonment, common financial penalties include:
- Fines – Up to $100,000 per count for mail/wire fraud; up to $250,000 for individuals or $500,000 for corporations per tax fraud count; and fines of up to double any gross profits from health care fraud.
- Restitution – Repayment of all losses suffered by victims.
- Forfeiture – Seizure of property derived from or involved in the criminal fraud.
The government also commonly pursues parallel civil fraud lawsuits seeking treble damages and exclusion of health care providers from federal insurance programs.
Impact on Professional Licenses and Benefits
Beyond time in prison, any felony conviction threatens one’s professional career. Many licenses require maintaining a clean criminal record, including medical licenses, pharmacy licenses, attorney bar licenses, and government contracts. Some fraud convictions may also lead to exclusion from federally-funded health care programs like Medicare.
A fraud conviction can also impact immigration status for non-citizens, lead to loss of voting rights, affect child custody rights, lead to eviction from public housing, and have other substantial personal consequences separate from the criminal penalties.
Fighting Federal Fraud Charges with an Experienced Attorney
Given the severe penalties, fighting federal fraud allegations in Philadelphia requires an experienced white collar criminal defense lawyer. The lawyer can carefully assess the evidence, identify any factual inaccuracies or legal defects in the government’s case, negotiate with prosecutors, and build an aggressive defense strategy.
With the right legal strategy; it may be possible to get charges dismissed pre-trial, secure a favorable plea bargain, or win at trial. Given the risks of conviction however, it is critical to have skilled legal guidance early on.