Articles Posted in Fraud and Corruption

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Most people do not realize that it is a federal crime to lie to a federal law enforcement agent. However, 18 U.S.C. § 1001 makes it a federal felony, punishable by up to five years in prison (or 8 years for a case involving terrorism), to “knowingly and willfully falsify, conceal, or cover[] up any trick, scheme or device a material fact… or make[] any materially false, fictitious, or fraudulent statement or representation” in regards to a federal law enforcement investigation. It also prohibits the knowing and willful making or using of any “false writing or documents containing the same to contain any materially false, fictitious, or fraudulent statement or entry.” Thus, for example, a criminal suspect who lies when questioned by an FBI agent can be guilty of a serious crime, even if that suspect is not actually guilty of the underlying crime for which he was being investigated. This situation often arises when people who have received subpoenas from law enforcement agents unfortunately sometimes agree to speak with agents or prosecutors but then make statements that those agents later discover to be untrue.

Most of the time however, people accused of this crime are frequently also charged with other crimes, too. For example, this charge is frequently brought against those who lie to U.S. Customs officials about their possession of cash, in conjunction with a charge of 31 USC § 5361(a)(1)(A). It is also common in health care fraud matters for a defendant to be charged with violating both 18 U.S.C. § 1035 – making false statements relating to health care matters – as well as 18 U.S.C. § 1001. In any case, the additional charge for making false statements may not be as serious as the underlying crime for which the defendant was originally investigated, but the fact that the defendant lied to law enforcement can be viewed as an “aggravating factor” by the judge at sentencing, meaning that it could seriously increase the ultimate sentence that the defendant will serve.

Though the maximum possible statutory penalty for this offense is five years in prison, pursuant to the Federal Sentencing Guidelines, the base offense level for this crime is 6. This base offense level means that a person convicted of this crime (and this crime alone) is more likely to receive a sentence of between 0 to 6 months in prison.

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Earlier this week, the United States Attorney for the Southern District of New York and the New York Office of the Federal Bureau of Investigations announced the arrest of 10 individuals in connection with allegations of bribery, corruption and fraud in intercollegiate athletics. The arrests – which included that of four Division 1 NCAA men’s basketball coaches – were handed down as a resulted of a two-year joint investigation by the FBI and U.S. Attorney into the illicit influence of money on coaches and student-athlete relationships in the NCAA.

The takedown highlights a problem which has seemingly occurred under the nose of the NCAA for years: the exploitation of future NBA player prospects by their coaches – who happen to be those that have the greatest degree of influence and control over them and their future careers. According to the first of two complaints which were unsealed earlier this week, these coaches took bribes from athlete advisors – including business managers and financial advisors to professional atheletes – in exchange for convincing promising college players “under their control” to retain the services of the bribers. As stated in this complaint, “many…coaches have enormous influence over the student-athletes who play for them, in particular with respect to guiding those student-athletes through the process of selecting agents and other advisors when they prepare to leave college and enter the NBA.” The scheme targeted top high school and college prospects with lucrative contracts on the horizon.

The second complaint alleges that a high-level executive at an athletic apparel company – confirmed by the media to be Adidas – paid bribes to high school prospects and their families for the purpose of inducing them to commit to universities which are sponsored by Adidas as opposed to those that are sponsored by their rivals. In describing the allegations at a press release, Acting Manhattan U.S. Attorney Joon H. Kim stated “the picture of college basketball painted by the charges is not a pretty one…Month after month, the defendants allegedly exploited the hoop dreams of student-athletes around the country, treating them as little more than opportunities to enrich themselves through bribery and fraud schemes.”