Corruption and fraud - the basics

Representative U.S. fraud and corruption statutes and their elements of proof

Bribery

Official bribery, Title 18, U.S. Code, Section 201

Prohibits:

• Giving or receiving
• Any "thing of value"
• To a public official
• To influence
• An official act

Foreign Corrupt Practices Act (FCPA) (Anti-Bribery Provisions),

Title 15, United States Code, Sections 78dd-1, et. seq.

Prohibits:

• A U.S. person or other person in the U.S
• Giving anything of value
• Directly or Indirectly
• To foreign government officials
• To obtain business or to gain an improper advantage

Commercial bribery

(Commercial Bribery is a criminal offense in one-half of the states, and grounds for a civil action for damages in all states.)

Prohibits:

• Giving or receiving
• Any “thing of value”
• To a public official
• To influence
• A business decision
• Without the knowledge and consent of the employer

Conflict of interest

Conflict of Interest, Title 18, U.S. Code, Section 208

• Whoever, being an officer or employee of the executive branch of the U.S. Government
• Participates personally and substantially in a contract, claim or other proceeding
• In which, to his knowledge, he [or a related party], has a financial interest
• Without full disclosure of such interest and receiving approval to participate

   ...Shall be subject to the penalties set out in Title 18, U.S. Code, Section 216.

Fraud and false statements

Criminal False Claims, Title 18, U.S. Code, Section 287

• Whoever makes or presents any claim
• Upon the U.S. Government
• Knowing such claim to be false, fictitious or fraudulent

   … Commits an offense

False Statements, Title 18, U.S. Code, Section 1001

Whoever:

• Willfully and knowingly
• Makes a false statement
• Or conceals
• A material fact
• In any matter within the jurisdiction of the U.S.

   … Commits an offense

Civil False Claims, Title 31, U.S. Code, Section 3729

Whoever:

• Knowingly presents or causes to be presented
• To the U.S. Government
• A false or fraudulent claim for approval

   … Is subject to civil penalties and damages

Embezzlement

Embezzlement of Public Money (Property or Records)
Title 18, U.S. Code, Section 641;

Felony Violation

• Willfully and knowingly
• Stealing or converting
• Any thing of value
• From the U.S. Government
• Worth more than $100

Misdemeanor Violation

• Willfully and knowingly
• Stealing or converting
• Any thing of value
• From the U.S. Government
• Worth less than $100

Common law civil claims

Fraud

• A person who…
• Makes a representation
• Which he knows to be false

  (Or who fails to disclose a material fact when there is a duty to do so)

• About a material point
• With the intent to defraud
• Which the victim relies upon
• To its damage

   … is liable for damages.

Conflict of interest

• An agent or employee of a principal or employer
• Who takes a pecuniary interest in a transaction
• That is potentially or actually adverse
• To the interest of the principal or employer
• Without full and timely disclosure to the principal or employer

   …is liable for damages.

Breach of fiduciary duty

• An agent or employee of a principal or employer
• Who breaches his duty loyalty to the principal or employer,

  (by, e.g., committing a civil or criminal offense)

• To the actual or potential detriment of the principal or employer

   … is liable for damages.

Contract and procurement fraud schemes and red flags

How to detect corruption and fraud

Basic steps in the investigation of corruption and fraud

Representative U.S. fraud and corruption statues and their elements of proof

How to prove fraudulent knowledge and intent

How to refer a case for criminal prosecution

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