Types of Federal Fraud Penalties
The United States government devotes a significant amount of resources to prosecute federal fraud cases. Felony convictions, heavy fines, and lengthy prison sentences are just some of the consequences that can apply in these cases.
WHAT IS FEDERAL FRAUD?
Fraud is the use of deceit, misinformation, or false pretenses for personal or financial gain. While it is possible to misuse any federal program to commit fraud, certain programs are common targets for fraud crimes. Common fraud schemes include:
- Mail Fraud – Any crime that uses the postal service can be charged as mail fraud. If someone mails a forged check or organizes a criminal enterprise by sending communications through the mail, federal mail fraud charges could apply.
- Tax Fraud – Attempt to defraud the government with tax information is one of the most common fraudulent misrepresentation cases. If someone chooses not to file their income tax, uses false information to obtain tax breaks, or lies about their income, they may be charged with tax fraud.
- Securities Fraud – Fraud cases involving commodities, stocks, and trading markets have gained a lot of media attention in recent years. Securities fraud can involve insider trading, Ponzi schemes, or embezzlement.
FEDERAL FRAUD PENALTIES
Each fraud case is different and the punishment for a particular crime can vary based on the offender’s criminal history, the severity of the crime, and whether or not a plea deal was reached. The Texas Penal Code states that fraudulent misrepresentation punishments can include:
- Fines – Fines are one of the most common federal fraud consequences. Nearly all fraud cases result in fines, ranging from a few hundred dollars to several million dollars.
- Incarceration – Jail or prison time is a less common fraudulent misrepresentation punishment and is usually reserved for the most serious offenses. For example, in recent years, several high-profile financial executives received decades in prison for securities fraud.
- Additional Financial Penalties – After paying hefty fines to the government, some people convicted of federal fraud may have to pay restitution to the people that were affected by their crimes. This might happen if someone is convicted of embezzlement and is then required to repay all the money they misappropriated.