Federal Criminal Conspiracy Charges for Government Contractors - Beware of 18 USC 371

Federal prosecutors going after government contractors frequently use federal conspiracy charges against a potential defendant even if the case is weak. Contractors – Be AWARE OF PROSECUTORS DEADLY WEAPON of bringing criminal charges for Conspiracy to Commit Fraud Against the United States Government.

What happens is that the potential defendant would act as a witness against other defendants in exchange for immunity or a lighter sentence. Regardless of how immoral one may think, it is fully allowed. Our goal is to save our client’s reputations and minimize the impact to the company.

Hurdles for Government Contractors

The federal enforcement agencies bring federal conspiracy charges to defendants who they believe played a part in the conspiracy to commit fraud against the United States. As a government contractor doing business with the federal government, federal law enforcement authorities may charge you with criminal conspiracy to defraud the US Government where the main focus is on another contractor or your subcontractor. 

Can the government prosecution prove its case? Before getting to the conspiracy charge the question usually lies in the behavior that the prosecution is going after. An example is the common charge of creating pass-through contracts in violation of the limitations on subcontracting regulations. If there is a statutory violation, then there can be no conspiracy. Defending against contractor fraud is no fun. However, it must be dealt with. Unfortunately, this is how government prosecutors keep you within their grip despite knowing that you may have really done nothing wrong.  However, there is hope if you are a federal contractor or individual facing conspiracy charges.

To “convict someone under the ‘defraud clause’ of 18 USC 371, the government need only show (1) he entered into an agreement (2) to obstruct a lawful function of the government (3) by deceitful or dishonest means and (4) at least one overt act in furtherance of the conspiracy.” See United States v. Caldwell, 989 F.2d 1056 (9th Cir.1993).

Defending against a conspiracy charge can mean showing that you did not act with the requisite intent to defraud the United States Government because of a good faith misunderstanding about the requirements of law.

An agreement to defraud the federal government requires the government attorneys to show an agreement to deceive or to cheat the government, but one who acts on an honest and good faith misunderstanding as to the requirements of the law does not act with an intent to defraud simply because [his] [her] understanding of the law is wrong or even irrational. See United States v. Miller, 953 F.3d 1095, 1103 (9th Cir. 2020). Many federal courts around the country have similar views.

In February 2022, Justice Department’s (DOJ) False Claims Act Settlements and Judgments Exceed $5.6 Billion in Fiscal Year 2021. According to the News Release, this was the Second Largest Amount Recorded, Largest Since 2014.

The main federal conspiracy statute is 18 USC 371. The thrust of the statute states that there is a conspiracy against the United States when two or more people conspire to commit an act that is a crime under the U.S. Code. The DOJ and OIG offices quite often charge contractors with conspiracy to commit fraud against the United States when they are after a ‘bigger fish’ but believe that you or your company participated as a co-conspirator.

Where government contractors find themselves facing a federal contract charge in a criminal case when the prosecutor charges the company or CEO with the crime of conspiring to defraud the United States under one or more contracts. This charge is often seen in SBA 8(a) small business fraud cases, SDVOSB fraud, and others.

The idea is that the government attorneys often find that a co-conspirator will volunteer to give information against the other defendant in exchange for. a lower sentence or getting dismissed from the case. A common ploy in a government contracting fraud case is to bring a federal conspiracy charge on anyone that may be remotely involved with the target of the investigation.

If you are involved in a conspiracy charge in a government contractor fraud case, you want to be absolutely careful when making deals with federal prosecutors. Consider consulting with an experienced federal defense lawyer that also understands government procurement laws.

Federal Contract Charge – What is a Conspiracy Charge to Defraud in a Government Contractor Fraud Case?

As a government contractor facing a federal contract charge, you may find yourself in a situation where the DOJ or OIG has chosen to issue you a target letter or threatened indictment for conspiracy to defraud the United States. This is a tough situation to be in. The federal conspiracy statute charged under is more than likely 18 U.S.C. 371.  The DOJ more than likely has evidence to move forward with a criminal case for conspiracy to commit fraud against the government because the definition of conspiracy against the United States requires two or more persons to conspire (contractors or individuals) to commit an act that is a crime under the law,.

If two or more persons conspire either to commit any offense against the United States or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to affect the object of the conspiracy, each shall be fined under this title or imprisoned not more than five years, or both. Whether or not the crime was actually committed is irrelevant.

You may have a defense to federal conspiracy charges if your conspiracy defense lawyer can show that none of the co-conspirators does an overt act to further the conspiracy. Conspiracy is typically the government attorney’s best tool to use against contractors or individuals.  This is so because the threat of jail time or criminal liability tends to help the prosecution build a case against the true perpetrator. Having a government contractor fraud lawyers and federal conspiracy defense attorney that understands federal procurement can make the difference between spending years in prison and prevailing against the government’s criminal charges against you.

More on 18 U.S.C. 171 Conspiracy to Defraud the United States Government

The crime of conspiracy to defraud the United States Government is not complete unless one of the co-defendants takes an overt act to further the conspiracy. A conspiracy is an agreement to commit a crime between two or more people to commit an act. Defending a federal conspiracy charge as a government contractor would mean disproving that that was any agreement.  Whether or not the crime was completed is irrelevant to be charged with conspiracy.  18 U.S.C 371 requires a participant to take overt action to form a conspiracy. Government contractors, or even family members that participate in the day-to-day activities of the business, even though a very minor participant in a conspiracy charge, can find themselves facing criminal conspiracy charges.  This minor participant can face maximum mandatory minimum sentences as major players in a government contracts conspiracy case. See important information about cooperating and proffer agreements.

Conspiracy Overt act requirement: Federal conspiracy statutes require that at least one of the two or more co-conspirators do some overt act to effect, further, or accomplish the underlying crime. For government contractors, it may be to get an invoice paid or to win a government bid. When an overt act is a requirement, then an agreement by itself is not enough. When one of the parties performs the overt act, then all co-conspirators become guilty of the conspiracy crime.

How to Defend Against Government Contractor Federal Conspiracy Charges? 

There is a chance that you can minimize the pressure when being charged with conspiracy to commit fraud against the United States. When federal prosecutors bring criminal conspiracy charges against government contractors, they are three potential defenses to raise.

  • You did not get involved in any agreement to commit a crime, so the conspiracy did not exist
  • You had no intent to commit a crime
  • You did not know the plan involved criminal activity
  • You withdrew your support from the conspiracy
  • You participated in the conspiracy under coercion or duress

However, it is not a defense that the defendant is charged with conspiracy based on an overt act by a co-conspirator who has been acquitted.

Every criminal case alleging federal conspiracy charges in white-collar criminal cases requires proving the elements beyond a reasonable doubt.  The best approach for any federal contractor is to show that the predicate crime was never committed. Compared to traditional crimes. allegations of federal contracting crimes can be disassembled. For example, in a Buy American Act fraud case, if your defense lawyer can show that the underlying requirements were met, then a conspiracy charge could be thrown out. As government contractor fraud lawyers and federal conspiracy attorneys, our team would have to assess all of the facts in the prosecution’s evidence to then create reasonable doubt. Finding a lack of evidence is also critical. There is no mathematical formula to defend against a federal conspiracy charge. 

  • A common trend shows that criminal defendants are convicted where their defense team had no government contractor attorney on board familiar with the underlying actions
  • Having lawyers on your defense team that understand federal procurement laws is critical to developing a strong legal defense up front.

If you are charged as a co-conspirator, the prosecution will have to first prove that you have “conspired” or “agreed to” accomplish a crime. Furthermore, simply talking about a potential crime is not enough without agreement on its accomplishment. The agreement must also be to accomplish the criminal object, such as getting paid on a fraudulent invoice or installing substandard equipment or materials. Innocent ventures do not meet a conspiracy charge. DOJ and other federal prosecutors must, under the general federal conspiracy statute 18 USC 371, prove an overt act furthering the goal. See Tips on Finding a Criminal Defense Attorney to Handle Your Government Contracts Case.

Federal Conspiracy Penalties For Government Contractors?

Conspiracy to defraud the United States Penalty: Federal conspiracy charges formulate the penalty. What is the object of the conspiracy and how serious was it?  Conspiracy penalties for committing a crime against the United States drive a prison sentence of no more than five years. 18 USC Section  371 also says that the court can also issue a fine in addition to giving jail time. 18 USC Section  371 provides a maximum punishment of not more than five (5) years, as well as a fine of up to $250,000.00 for a felony offense.  Having a government contractor fraud lawyer that can help you develop a solid legal defense is critical in the early stages of your case.

What Are Your Rights When You Get a Criminal Conspiracy Charge as Government Contractor? 

Every person has a right to remain silent and have an attorney present during government questioning or investigation. Did they issue you Miranda warnings? You have a right to speak with an attorney and not incriminate yourself. Many federal contractors make the mistake of speaking to federal law enforcement and then contacting a government contractor fraud defense attorney. Sometimes, the damage may already be done.

If you are charged with conspiracy to commit fraud, there is a chance that you can minimize the pressure when being charged with conspiracy to commit fraud against the united states under 18 USC 371 or are investigated for conspiracy to defraud the United States as a federal contractor or employee, call our federal government contractor fraud defense attorneys and federal conspiracy attorneys at 1.866.601.5518.