Federal fraud cases do not rely on a single statute. Instead, prosecutors use a wide network of criminal and civil laws that allow them to charge a broad range of conduct, from misrepresenting information to government agencies to submitting false claims for payment. Understanding these statutes is crucial for anyone under investigation or facing federal charges because the penalties can be severe—and multiple statutes are often used together in the same case.

Below is an overview of the most common federal laws used in fraud prosecutions, along with the penalties they carry and the types of conduct they cover.

False Claims Act (31 U.S.C. § 3729)

The False Claims Act (FCA) is one of the most powerful tools the government uses to combat fraud, especially when public funds are involved. The FCA makes it illegal to knowingly submit—or cause someone else to submit—a false or fraudulent claim for payment to the United States.

Common scenarios include:

• Inflated invoices or overbilling
• False certifications for eligibility or compliance
• Misrepresenting costs or labor hours
• Falsifying documents submitted to government agencies

Penalties:

• Treble (triple) damages
• Significant per-claim civil penalties
• Possible exclusion from future government contracting
• Potential criminal exposure in parallel prosecutions

Because the FCA allows whistleblowers (known as relators) to file qui tam actions, investigations often begin with insider complaints.

Wire Fraud (18 U.S.C. § 1343)

Wire fraud is one of the most frequently charged federal offenses due to its broad reach. Any scheme to defraud that involves email, phone calls, electronic transfers, or online communications can fall under wire fraud.

Prosecutors favor wire fraud because:

• It applies to nearly any modern communication
• It does not require financial loss
• It can attach criminal liability to conduct tied to securities, government programs, business dealings, and more

Penalties:

• Up to 20 years in federal prison
• Up to 30 years if the fraud affects a financial institution
• Substantial fines and restitution

Wire fraud is often used alongside other charges such as securities fraud or money laundering.

Major Fraud Against the United States (18 U.S.C. § 1031)

This statute applies specifically to fraud involving federal contracts, grants, or procurement programs valued at $1 million or more. It is commonly seen in government contracting, defense procurement, and large-scale federal projects.

Conduct targeted under this law may include:

• Inflating bid costs
• Misrepresenting materials or labor
• Failing to comply with contract specifications
• Providing false data to secure a federal contract

Penalties:

• Up to 10 years in prison
• Enhanced penalties if the conduct results in serious bodily injury

This statute is often used in conjunction with the False Claims Act or wire fraud.

Conspiracy to Commit Fraud (18 U.S.C. § 371 and § 1349)

Conspiracy charges are extremely common in federal fraud cases. The government only needs to show that:

1. Two or more people agreed to commit a crime, and
2. At least one person made an overt act in furtherance of the plan.

Under § 1349, the penalties match those of the underlying offense—including wire fraud, securities fraud, or healthcare fraud.

Penalties:

• Same penalties as the underlying crime (e.g., up to 20 years for wire fraud)

Conspiracy does not require the fraudulent scheme to be successful, making it a powerful and flexible tool for prosecutors.

Anti-Kickback Act

Kickbacks are prohibited in federal contracting and procurement. The Anti-Kickback Act criminalizes offering, providing, soliciting, or accepting anything of value in exchange for favorable treatment in awarding or managing federal contracts.

Examples include:

• Bribes for awarding subcontracts
• Illegal referral fees
• Payments tied to influencing government procurement decisions

Penalties:

• Criminal fines
• Imprisonment
• Civil penalties and treble damages

Kickback allegations frequently accompany charges involving major government contractors or subcontractors.

False Statements (18 U.S.C. § 1001)

This statute makes it a crime to knowingly and materially make a false statement to federal officials or agencies. It is one of the broadest tools federal prosecutors use.

Violations may include:

• False certifications
• Misleading information in reports or audits
• Concealing required information
• Submitting inaccurate forms or applications

Penalties:

• Up to 5 years in prison (or up to 8 years for terrorism-related matters)

Unlike the FCA, § 1001 does not require financial loss—only that the statement was knowingly false and material.

Money Laundering (18 U.S.C. §§ 1956, 1957)

Money laundering charges often accompany fraud investigations when the government alleges that the proceeds of fraud were moved, transferred, or concealed.

Conduct may involve:

• Transferring funds through multiple accounts
• Purchasing assets with illegally obtained money
• Using shell companies to disguise transactions

Penalties:

• Up to 20 years in prison
• Criminal forfeiture
• Substantial fines

Money laundering charges dramatically increase the seriousness of any fraud case.

Why These Statutes Matter in Federal Fraud Investigations

Federal prosecutors often charge multiple statutes at once, giving them leverage in negotiations and significantly increasing potential exposure. Many statutes—especially wire fraud and false statements—are intentionally broad, making them applicable to almost any business, financial, or government-related activity.

Penalties can include:

• Imprisonment
• High fines
• Restitution orders
• Forfeiture of property
• Loss of federal contracts or professional licenses

Because these cases typically involve substantial documentation, digital communications, and financial analysis, defending against them requires both legal and technical expertise.

If you or your organization is under investigation for federal fraud, the stakes are high. Early legal representation can make a significant difference in how the case proceeds. To speak confidentially with an experienced federal criminal defense attorney at Burnham & Gorokhov, PLLC, please contact our office today.