Most Common Types of Federal Fraud (With Examples) 2024

Being charged with fraud is a serious offense. It often violates federal statutes and can bring intense legal, social, and professional consequences. A person can be accused of many different types of federal fraud in the United States. It’s crucial that you understand the most common types of federal fraud in order to act in accordance with the law and avoid any intimidating penalties.

Understanding Federal Fraud

Federal fraud is any deliberate act of deception or misrepresentation done with the intent of personal gain. Federal fraud is a broad term that covers a spectrum of fraudulent actions that are illegal under multiple federal statutes. There are many different types of federal fraud that you can be charged with. The type of fraud an individual is charged with depends on their actions, the individual or business they took advantage of, and the intent behind their actions.

Common Types of Federal Fraud

The following are the most common types of federal fraud our firm has experienced:

1. Mail and Wire Fraud Mail and wire fraud are incredibly broad and have wide capabilities, so they are two of the most prosecuted types of fraud. These types of fraud occur when a fraudulent plan is carried out through internet communications (wire fraud) or mail services (mail fraud). Mail and wire fraud accusations are sometimes added to additional criminal counts because almost all fraudulent actions can, at some point, involve these forms of communication.Both charges need proof that the defendant knowingly planned or took part in a fraud scheme and used mail or wire transfers as a means of doing so. Examples of mail and wire fraud include:
   • Ponzi Schemes. These occur when a defendant lies about investments to new or potential investors via mail or email.
   • Contest Fraud. This happens when the victim is told they’ve won a contest or lottery, but they have to pay the taxes first, only to never receive the alleged prize.
   • Employment/Job Board Frauds. This can happen when the perpetrator sends job information and requests payment for training materials or requests personal information for jobs that do not exist.
2. Tax Fraud When a person or organization knowingly provides false information on a tax return in order to lower their tax liability, it is referred to as tax fraud, also known as tax evasion. This illicit activity may include submitting no tax returns, exaggerating deductions, or underreporting income. The goal of tax fraud is to avoid having to pay the government the taxes that are due. Some examples of tax fraud include:
   • Failing to File. Failing to file simply means the defendant did not file a tax return at all.
   • Hiding Assets. Attempting to move money to an offshore account or lying about assets is a form of tax fraud.
   • Claiming Phony Dependents. You cannot lie about the number of dependents you have, such as claiming children who do not exist or who may live with someone else.
3. Securities Fraud Financial misconduct, including deceptive methods in the stock or commodities markets, falls under the broad topic of securities fraud. It includes a wide range of illicit actions, all directed toward deceiving investors or tampering with financial markets for private benefit. Companies, people, and even financial professionals like brokers and investment advisors can conduct securities fraud. Some examples of securities fraud include:
   • Insider Trading. This is where a person or entity trades stock based on information not given to the public, giving them an unfair advantage.
   • Embezzlement. Embezzlement can look like making unauthorized trades for personal gain, such as withdrawing funds from a client’s account and taking it for his own monetary use.
   • Accounting Fraud. This can occur when financial statements are manipulated to paint a company’s financial status in a more favorable light.
4. Medicaid and Medicare Fraud Fraud involving Medicaid and Medicare refers to the purposeful submission of incorrect or misleading data in order to obtain benefits from these publicly financed healthcare programs that are not authorized. Medicare primarily covers individuals 65 years of age and older, as well as some younger individuals with impairments, whereas Medicaid provides health coverage to low-income individuals and families. Examples of Medicare and Medicare fraud include:
   • Billing for Services That Were Not Required. This is typically done by a healthcare provider for financial gain.
   • Upcoding. Upcoding occurs when a healthcare provider bills Medicare or Medicaid for a more expensive service than what was actually performed.
   • Performing Unnecessary Procedures. It is illegal for a healthcare provider to perform a service and bill for it when it is not medically necessary.

FAQs

What Are Some Defenses to Federal Fraud?

The exact defense you use against a federal fraud charge will depend on the unique circumstances of your case. However, lack of intent defenses are some of the most common. A defendant may be able to avoid a fraud charge if they can demonstrate that they had no intention of misleading anyone and that fraud was not committed on purpose. A defendant may claim that they were unaware of the fraudulent scheme, and their lawyer can work to prove that.

What Are Some Penalties for Federal Fraud?

Penalties for federal fraud include serving time in federal prison, paying hefty fines, paying restitution to the victims affected by the crime, and probation. The severity of the penalties is based on how elaborate the crime was, how many people were affected, how it affected the victims, and the amount of money or damages involved as a result.

What Is the Most Common Type of Federal Fraud?

Mail and wire fraud are two of the most common types of federal fraud. This is because these frauds usually have a broad range of possibilities, and they overlap with other crimes. This is because many other crimes require some form of wire or mail communication to be done. For example, a person can be guilty of both identity theft and wire fraud if they request personal information from someone via email and then use it to steal their identity.

Do I Need a Lawyer If I’m Charged With Federal Fraud?

If you are charged with federal fraud, it is highly recommended that you hire a lawyer. Federal fraud allegations are serious and carry heavy penalties. An attorney can offer vital legal advice, evaluate the strength of the prosecution’s case against you, and create a strong defense plan that is customized to your case’s circumstances. They can defend you in court, negotiate with the prosecution to get the charges or penalties dropped, and advocate on your behalf.

Contact The Law Offices of Richard Kuniansky Today

If you have been charged with federal fraud, help is available to you. Our firm is passionate about representing individuals facing serious charges and is prepared to do everything in our power to defend you adequately. Contact The Law Offices of Richard Kuniansky today for help with your case.