What Medical Providers and Business Owners Need to Know About Federal Mail Fraud
How many types of fraud can you think of?
There’s bank fraud, insurance fraud, consumer fraud, wire fraud, identity theft, payroll fraud… and the list goes on.
But it might surprise you to learn how often these multiple types of fraud are charged together in the same case, arising out of the same set of facts. A business executive, for example, might be indicted on charges of bank, consumer, wire, and payroll fraud all at once.
That’s especially common in the type of fraud our law firm handles most often: health care fraud.
This article is the latest in a series exploring the most common federal criminal statutes used against doctors, pharmacists, health care executives, and other white-collar professionals in the medical field.
One of those statutes and the focus of today’s article is Title 18, Section 1341 of the U.S. Code (18 USC 1341): the federal mail fraud statute.
You might think of health care fraud and mail fraud as two entirely different kinds of fraud. But prosecutors try to use 18 USC 1341 in health care criminal cases whenever they can and there are specific tactical reasons for that.
We’ll explore those reasons, and the core of the statute itself, below. We want health care providers to know how easily everyday conduct can be misconstrued as mail fraud, and how eager federal agents are to pursue this convenient add-on charge.
What Does 18 USC 1341 Actually Say?
18 USC 1341 is actually titled “Frauds and Swindles.” It is the first section of Chapter 63, which is entitled “Mail Fraud and Other Fraud Offenses.” Those titles can lead to some confusion as to which statute people mean when they talk about “mail fraud.” While many of the provisions in Chapter 63 could be relevant in a mail fraud case (depending on the circumstances), it is Section 1341 that most immediately pertains to the crime of mail fraud.
The full text of Section 1341 reads as follows (the emphasis added is our own, not Congress’s):
Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or furnish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, or anything represented to be or intimated or held out to be such counterfeit or spurious article, for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or deposits or causes to be deposited any matter or thing whatever to be sent or delivered by any private or commercial interstate carrier, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail or such carrier according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined under this title or imprisoned not more than 20 years, or both.
If the violation occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with, a presidentially declared major disaster or emergency (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)), or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
This statute can be difficult for people to read. As you can see, the first sentence alone contains over 200 words. We’ve linked to a couple of key statutory definitions for you above, and also highlighted some of the most important words. But to help you better break down the conduct and mental state contemplated within 18 USC 1341, let’s outline its most important provisions in the sections that follow.
What Kind of “Mail” Counts as Mail Fraud?
18 USC 1341 covers almost any kind of physical mail. This includes:
- United States Postal Service (USPS)
- Federal Express (FedEx)
- United Parcel Service (UPS)
- Private couriers
Electronic mail and transmissions (e.g., email, fax, phone) are usually prosecuted as wire fraud under 18 USC 1343 instead, though prosecutors frequently charge both statutes simultaneously.
The statute can apply if these services play virtually any role even a very small one in the alleged commission of fraud. Notably, it’s not only the sender who can be prosecuted under 18 USC 1341 but also the recipient.
Why Do Prosecutors Try to Use 18 USC 1347 in Health Care Fraud Cases?
Part of a prosecutor’s job (in their view, anyway) is to get the highest number of convictions and harshest sentences possible. Unfortunately, this is how prosecutors build their careers.
So part of the reason for charging 18 USC 1347 in addition to health care fraud or a conspiracy count is simply that it’s an easy charge to add. For instance, simply mailing a fraudulent invoice to CMS can be enough to constitute both health care fraud and mail fraud (or wire fraud if the invoice is submitted electronically).
But there is another advantage to prosecutors in 18 USC 1341: they can also seek injunctive relief under the authority of 1345 (found within the same Mail Fraud Chapter). In fact, 1345 specifically mentions “federal health care offenses” in Part (a)(1)(C).
What this means is that, by alleging mail fraud, the government can ask a court to freeze the defendant’s assets in order to prevent any further fraud. These charges can also have the effect of freezing or delaying payments from CMS for legitimate services your practice has provided.
Contact the Experienced Federal Fraud Team at The Criminal Defense Firm to Review Your Case
If you are under investigation for making fraudulent representations or submissions to the government or a private insurer, the medical mail fraud defense lawyers at The Criminal Defense Firm can help. Contact us online or call 866-603-4540 right away.
Compliance Litigation – Defense
Dr. Nick Oberheiden is a national litigation and trial criminal defense attorney who practices exclusively in the area of federal law.