Notice

The United States Attorneys’ Manual is currently undergoing maintenance. If you are unable to access specific content, please contact the webmaster.

You are here

Criminal Resource Manual 930 Major Fraud Against The U.S.

930

Major Fraud Against the United States

The Major Fraud Act of 1988 (Pub.L. No. 100-700, § 2, 102 Stat. 4631) created a new offense, 18 U.S.C. § 1031:
    1. Whoever knowingly executes, or attempts to execute, any scheme or artifice with the intent --
      1. to defraud the United States; or
      2. to obtain money or property by means of false or fraudulent pretenses, representations, or promises, in any procurement of property or services as a prime contractor with the United States or as a subcontractor or supplier on a contract in which there is a prime contract with the United States, if the value of the contract, subcontract, or any constituent part thereof, for such property or services is $1,000,000 or more . . . .

    The statute has been upheld against vagueness attacks. United States v. Nadi, 996 F.2d 548 (2d Cir. 1993), cert. denied, 114 S. Ct. 347 (1993); United States v. Frequency Electronics, 862 F. Supp. 834 (E.D.N.Y. 1994). For more on the Act, see S. MacKay, The Major Fraud Act After Seven Years: an Update, 64 Federal Contracts Report 1 (Sept. 25, 1995, Bureau of National Affairs). The Criminal Division's Fraud Section Federal Procurement Fraud Unit also has prepared a monograph on the Act, as well as a sample indictment.

    The Act also establishes a "bounty-hunter" provision under 18 U.S.C.§ 1031(g), which allows payments from the Department of Justice to persons who furnish information under the Act; however, to date, no fund has been authorized and no payments awarded.

    [cited in USAM 9-42.001]

    Updated February 19, 2015