Federal Funds Fraud

18 U.S.C. § 666 - Theft or Bribery Concerning Programs Receiving Federal Funds

Under 18 U.S.C. 666, federal funds fraud, any agent of private businesses and state and local government employees can be prosecuted for embezzling, stealing, obtaining by fraud, or knowingly converting federal program funds.

The United States Department of Justice (DOJ) said Congress created this federal law to ensure the integrity of federal program funds. This federal statute is similar to 18 U.S.C. 641, which prohibits government property theft or embezzlement.

18 U.S.C. § 666 - Theft or Bribery Concerning Programs Receiving Federal Funds
It's a crime to commit theft or bribery from any type of program that is receiving federal funds.

The definitions under 18 U.S.C. 666 are wide-ranging. Simply put, you could face charges under this law if you illegally obtain any government property. Since federal funds subsidize many government agencies and schools, the government always seeks to ensure they are correctly used.

Some common examples of criminal cases being prosecuted under Section 641 and Section 666 include Medicare, Medicaid, and healthcare fraud. It also includes government and military contract fraud and submitting false information to the government to obtain payment from a federal benefit program.

Further, federal prosecutors will often pursue charges under other specific statutes, such as 18 U.S.C. 1347 healthcare fraud, the False Claims Act, the Anti-Kickback Statute, and the Stark Law.

In most cases, government property theft or embezzlement could trigger prosecution under other statutes, such as 18 U.S.C. 371 conspiracy, 18 U.S.C. 1341 mail fraud, 18 U.S.C. 1343 wire fraud, and money laundering.

Suppose you steal or divert funds from an organization receiving federal funding. In that case, it's a type of embezzlement crime under Title 18 U.S. Code Chapter 31 Section 666 called theft or bribery concerning programs receiving federal funds.

What Does the Federal Law Say?

18 U.S. Code 666 theft or bribery concerning programs receiving federal funds says, “being an agent of an organization, whoever embezzles, steals, obtains by fraud, or knowingly converts to the use of any person misapplies, property that is valued at $5,000 or more, and is owned by, or under control of the government, or corruptly solicits for the benefit of anyone, anything of value, intending to be influenced or rewarded any business, transaction, shall be….”

Section 666(c) says, “This section does not apply to bona fide salary, wages, fees, or other compensation paid, or expenses paid or reimbursed, in the usual course of business.”

Section 666(d)(1) says, “The term “agent” means a person authorized to act on behalf of another person or a government and, in the case of an organization or government, includes a servant or employee, and a partner, director, officer, manager, and representative.”

In other words, federal program fraud is stealing from a federally funded program.  It means someone is allegedly attempting to get money from the government or to make an agency use deception fraudulently it would not usually take.

18 U.S.C. 666 – Quick Facts

Let's review some specific quick facts about Title 18 U.S.C. 666, such as the following:

  • This law makes it a federal crime to steal, embezzle, or unlawfully obtain money from a program that receives federal funds.
  • The programs include those administered by the government or receiving federal financial assistance of $10,000 or more.
  • An agent of an organization receiving federal funds steals, embezzles, or misappropriates funds or property valued at $5,000 or more.
  • It's a crime to offer a bribe to an agent of a federally-funded organization or government entity regarding diverting funds or property.
  • The penalties for stealing from agencies receiving federal funds are up to ten years in prison and a fine of up to $250,000 per count of embezzlement.

What Are the Defenses for 18 U.S.C. 666?

While 18 U.S.C. 666 and closely related 18 U.S.C. 641 cover a wide range of alleged criminal activity, there are several possible strategies a federal criminal defense lawyer can use on your behalf.

Presenting a successful defense could significantly reduce the risks of prosecution and the prosecutors' leverage in plea deal negotiations.

Defenses for Theft or Bribery Concerning Programs Receiving Federal Funds
Contact our firm for a free case evaluation.

Maybe we can argue that you didn't act with criminal intent, a required crime element. Suppose evidence of intent is lacking, or the evidence suggests any improper billings were made accidentally and in good faith. In that case, you have a good chance of avoiding prosecution under this law.

In other words, the government has to prove that you must have known that what you did was illegal and intended to commit the crime. Maybe we can show that the allocation of funds was not embezzlement or theft.

Maybe we can show no other necessary evidence to obtain a conviction. Federal prosecutors must prove all the elements of the crime beyond a reasonable doubt. Any doubt on one factor could be enough to prevent a trial or get a not-guilty verdict at a federal trial.

Maybe we can argue that no federal funds were taken. It's not always clear whether this federal crime only applies to the theft of federal funds or from organizations receiving federal funds.

Maybe we can argue that you diverted funds the federal government did not expressly receive. Perhaps the agency did not receive $10,000 in federal funds within a year. Contact our law firm for a free case evaluation. The Hedding Law Firm is based in Los Angeles, California.

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