The Fraud Division of the United States Attorney’s Office is responsible for criminal prosecution and civil enforcement actions against individuals and companies who violate federal laws against fraud and certain other offenses. The Division is organized into the Criminal Fraud section and the Affirmative Civil Enforcement section.
Assistant United States Attorneys within this section enforce the federal criminal laws prohibiting fraud and other economic crimes, public corruption, cybercrime, and threats to national security. Fraud Division AUSAs work closely with federal and state law enforcement agencies that investigate violations of these laws. These agencies include the Federal Bureau of Investigation, Drug Enforcement Administration, Department of Health and Human Services, Internal Revenue Service, United States Secret Service, United States Postal Inspection Service, the Offices of Inspector General for various federal agencies, the Kentucky Attorney General’s Office, the Kentucky State Police, and other local police departments and county sheriff’s offices.
Fraud Against the Government
The Fraud Division oversees federal investigations and brings criminal charges against violators who wrongfully obtain money from Medicare, Social Security, and other federally funded benefits programs. These cases include schemes to defraud federal healthcare programs through unnecessary or excessive services, profiteering from the illegal prescription and diversion of opioids, fraudulent applications to obtain federal grant money, and false claims for federally backed insurance benefits. The Division also prosecutes federal tax-related crimes.
During the COVID-19 pandemic, the federal government authorized several emergency benefits programs designed to provide economic relief for shuttered businesses and individuals out of work. Unfortunately, these programs also became the target of many fraud schemes, as wrongdoers used false applications to obtain unjustified emergency benefits. Prosecuting this pandemic-related fraud is a high priority for the Fraud Division.
Fraud Against Individuals and Businesses
Federal law prohibits a wide variety of online scams, identity theft, and schemes to defraud consumers, business owners, lenders, charitable donors, or investors. Part of the Fraud Division’s core mission is to identify the perpetrators of these offenses, prosecute them for their federal crimes, and work to restore the economic harms done to their victims.
The Division’s work also includes the prosecution of federal crimes arising from elder fraud and abuse. These crimes include financial fraud specifically targeted at the elderly and health care fraud that involves substandard care or exploitation of the elderly. Combatting these crimes is a Division priority.
Corruption of public offices and elections erodes the people’s trust in its elected officials and blights the integrity of government. Bribery and kickback schemes involving federal officials and most state and local officials are federal crimes. Federal law also prevents public officials from misusing their offices to steal or abuse government resources. Federal election crimes include vote-buying and certain campaign finance offenses. The Fraud Division ensures that these crimes are investigated and prosecuted to the fullest extent of federal law.
Federal law prohibits the misuse of computer systems and networks to steal information, extort payments, harass individuals, and disrupt or damage business operations. These crimes can take many forms, including business email compromise schemes, ransomware attacks, and cyberstalking. The Fraud Division prosecutes cybercrime in each of its forms. The Division also prosecutes the use of cryptocurrencies and other digital assets to launder the proceeds of criminal activities.
The Fraud Division is also responsible for prosecuting many of the federal crimes related to the nation’s security. This includes crimes motivated by international or domestic terrorism ideologies, cyber threats to the nation’s infrastructure, and threats of mass violence.
Affirmative Civil Enforcement (ACE)
Assistant United States Attorneys and investigators within the ACE Unit pursue civil actions against individuals and public and private entities that engage in fraud against the federal government (including health care fraud and procurement fraud), violate federal laws, divert controlled substances, or damage federal lands or resources. Cases may be pursued under the False Claims Act, Stark Act, Anti-Kickback Statute or Controlled Substances Act, and various civil environmental statutes and civil rights statutes.
The primary civil weapon against fraud is the False Claims Act, 31 U.S.C. §§ 3729-3733. Enacted in 1863, the Act allows the United States to collect triple damages and civil penalties of $5,500 to $11,000 (as adjusted for inflation) per violation from persons who submit fraudulent claims for federal monies. This includes health care fraud, procurement fraud, pandemic-relief program fraud, and a variety of other frauds against the federal government.
The False Claims Act also allows citizens who have knowledge of fraud against the government to file a "qui tam" or "whistle blower" lawsuit in the name of the government. 31 U.S.C. § 3730. These complaints by individuals must first be filed under seal to allow the United States time to decide whether to join in the suit. The complaint must be served both on the United States Attorney General and the United States Attorney's Office. The whistle blower is also required to disclose to the government all material evidence supporting the allegations.
The ACE Unit also enforces federal civil rights statutes to protect constitutional rights and to enforce federal civil rights statutes prohibiting discrimination on the basis of race, sex, gender identity and sexual orientation, religion, disability, military status, and other protected characteristics in the areas of education, housing, transportation, and employment, among others. Some of the civil rights statutes ACE enforces include the Fair Housing Act, the Americans with Disabilities Act, the Equal Credit Opportunity Act, the Uniformed Services Employment and Reemployment Act, and laws prohibiting patterns and practices of police misconduct. ACE also coordinates with the office’s General Crimes Division on criminal civil rights matters, such as hate crimes and police brutality.