Fraud

David M. Dudley has handled nearly every type of fraud case prosecuted in federal court. He has tried and won numerous federal cases as a defense lawyer and can help you if you've been accused of:

What Is Fraud?

Fraud is defined in various ways, but the meanings are all similar:

  • An intentional deception made for personal gain or to damage someone else
  • A false representation of a matter of fact — whether by words or by conduct, by false or misleading allegations, or by concealment of what should have been disclosed — that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury
  • A deceit
  • Trickery
  • Intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right

The U.S. Department of Justice operates a Fraud Section, devoted to being a "front-line litigating unit that acts as a rapid response team, investigating and prosecuting complex white collar crimes cases throughout the country."

Some facts gathered by the Association of Certified Fraud Examiners include:

  • The typical organization loses 5 percent of its annual revenue to fraud
  • When this number is applied to the 2009 estimated gross world product, this five percent amounts to a possible fraud loss of over $2.9 trillion
  • Frauds usually last a median of 18 months before they are detected
  • Those committing fraud often display red flags that they are doing so; the two top red flags are living beyond their means and experiencing financial problems
  • More occupational frauds are found out by tips than by other means

Common Types of Fraud

The Federal False Claims Act covers false or fraudulent claims for payment made to the U.S. government. Some of the most common types of fraud covered by that act today are:

  • Health care fraud (Medicare and Medicaid fraud): this can include services not rendered, nonexistent patients, kickbacks, up-coding services, bundling and unbundling, lack of medical necessity, false certification, research grant fraud and inflating cost reports.
  • Pharmaceutical fraud: this can include off-label marketing of drugs, kickbacks, inflating the cost of drugs, best price fraud and pharmaceutical benefits manager fraud.
  • Defense contractor fraud: this can include cross-charging, improper product substitution, improper cost allocation, worthless or substandard products or services, inflation of costs and charges and violations of the Truth-in-Negotiations Act.
  • Energy fraud: this can include oil, gas and coal royalty fraud and energy contracting/services fraud.
  • Construction and procurement fraud: this can include bid-rigging, falsifying minority contractor status, bribes, kickbacks, overcharging materials and man hours, substandard materials and workmanship, failure to follow contract specifications and falsified progress reports and documents.
  • Research fraud: this can include falsifying a grant application, falsifying research data and results, overcharging time and costs, falsifying purchase orders, using grant funds for unrelated research, using grant money for personal expenses, improper conflicts of interest by principal investigators, falsifying progress reports and other documentation and/or failing to comply with government safety and other regulations.

If you're under investigation for fraud, it is important to hire an experienced and skilled white collar crimes lawyer who can build you a strong defense. Mr. Dudley can help you at any stage of the process. To schedule a consultation, please contact Mr. Dudley today.

Selected Case Results: Fraud

  • U.S. v. W.C.: The defendant managed several major music artists. During a nationwide tour, an employee of his company used several fraudulent credit cards to pay for hotel rooms, airline tickets, and other expenses. The federal government subsequently indicted the defendant for mail and wire fraud. Before trial, however, Attorney Dudley was able to convince the Assistant United States Attorneys handling the prosecution to DISMISS the indictment against his client.
  • Investigation of N.M.: Federal law-enforcement agents targeted N.M., a real estate investor, for millions of dollars in real estate fraud. Over several years, N.M. was represented by Attorney Dudley. Federal authorities were able to bring NO CHARGES against N.M.
  • U.S. v. R.D.: An attorney was indicted for mail and wire fraud in federal court after filing an insurance claim for his yacht which he claimed had been destroyed by pirates in the Mediterranean Sea. Convicted at trial, the defendant hired Mr. Dudley for sentencing. At the sentencing hearing, Attorney Dudley persuaded the court to impose a prison term significantly less than that which both the government and the PSR had recommended. In the process, however, the court rejected the defense contention that a two-point upward guideline adjustment did not apply. The court of appeals later agreed with that argument and REVERSED the defendant's sentence. A subsequent resentencing resulted in the defendant's prison term being reduced.
  • U.S. v. D.M.: Accused of federal defense contract procurement fraud, the defendant was convicted at trial of all counts. Retained for the purpose of sentencing and appeal, Attorney Dudley argued that the loss figures reached by the government and the PSR were speculative. The district court disagreed and sentenced the defendant to over five years in prison. The court of appeals accepted the defense argument and REVERSED the trial court's sentencing decision. As a result of that reversal, the government and the defense reached an agreement which reduced the defendant's sentence by almost two years
  • S v. J.T.: The defendant was accused of fraudulently obtaining over $25,000 in credit from a casino. Pursuant to a civil settlement, Attorney Dudley was able to obtain a DISMISSAL of all felony charges.
  • S v. Y.M.L.: The defendant was accused of providing a bad check for over $18,000 to a casino. Pursuant to a civil settlement, the defense obtained a DISMISSAL of all felony allegations.
  • S. v. S.E.: A friend of the defendant asked her to cash a $7,500 check at a casino. That check turned out to be fraudulent. Under a civil settlement negotiated by Attorney Dudley, the prosecution agreed to DISMISS all felony charges.
  • P. v. M.R.: As the manager of a law office which had purportedly presented millions of dollars in fraudulent liability claims to auto insurance companies, the defendant was charged with felony insurance fraud. Although others in the conspiracy eventually pleaded guilty to offenses which sent them to state prison, the defendant obtained a sentence of PROBATION with no period of incarceration.
  • P. v. J.L.: The defendant was allegedly a major "capper" in an automobile insurance fraud ring. Although he was facing numerous felony fraud charges carrying potential state prison sentences, the defendant received a PROBATIONARY sentence without incarceration.
  • U.S. v. N.S.: A medical doctor was indicted federally for overcharging a government health insurance agency by more than $100,000 for services he had provided to several patients. Although the defendant was convicted at trial, he received a sentence of only 24 months for his misconduct.
  • U.S. v. T.S.: The defendant was indicted for over $6,000,000 in bank fraud in three jurisdictions: the District of Minnesota, the District of West Virginia, and the Central District of California. After extended negotiations, the defendant, who was looking at 20 to 30 years in federal custody, received a sentence of less than eight years.
  • U.S. v. M.T.: The federal government charged the defendant with organizing a $1,000.000 mortgage fraud scheme. Before the government indicted the defendant for running another $4,000,000 real estate fraud scheme, Attorney Dudley reached a deal with the federal prosecutor pursuant to which the defendant admitted his involvement in the first scheme in exchange for a prosecutorial decision not to name him in the second. At sentencing, the defendant, who had a substantial criminal record, received a sentence of just 41 months.
  • P. v. J.S.: Accused of organizing an extensive automobile insurance fraud network, the defendant was facing numerous felony fraud charges. Although the defendant was purportedly responsible for almost $1,000,000 in losses to various insurance companies, the defense worked out a deal which resulted in the defendant serving only one year of actual prison time.
  • P. v. E.D.: While working in the accounting department of medical clinic which provided free and discounted services to the poor, the defendant embezzled $1,200,000. Consequently, the district attorney charged her with several felony fraud counts. After producing a psychiatric report and other documents which demonstrated that the defendant engaged in the unlawful conduct only to support a massive gambling addiction, the defense was able to obtain a disposition under which she received a prison term of only four years.
  • U.S. v. R.S.: Paying retail clerks and medical receptionists to scan the credit cards of customers, the defendant used the information obtained to manufacture counterfeit credit cards. When he was indicted federally, the government claimed that he had caused losses of over $1,000,000 to cardholders and financial institutions. After reaching a plea bargain which left open the issue of aggregate loss, Attorney Dudley convinced the court to apply a reasonable doubt standard to the government's claim of how much money his conduct caused victims, even though the court was not legally required to use such a high standard. Applying that standard of proof, the court found that the government could only demonstrate losses of $420,000. The court then departed slightly downward from the resulting guideline range to impose a sentence of 46 months, 41 months lower than the government's recommendation.
  • U.S. v. R.Y.: While directing a telemarketing operation, the defendant sold worthless art to consumers under false pretenses. According to the federal government, which indicted him for mail and wire fraud, the defendant's conduct cost his victims over $7,000,000. After negotiating a plea agreement which held him accountable for several million dollars less than that, the defense persuaded the district court to impose a sentence of 60 months, a term far lower than that which he was originally facing.
  • U.S. v. J.C.: Federal authorities indicted the defendant in two separate districts for conspiring to distribute over $1,000,000 in counterfeit software. The defense later negotiated a plea agreement which consolidated the two cases in one district and allowed for a sentence of PROBATION.
  • P. v. M.T.: A bank repossessed an expensive sports car which the defendant had purchased by providing false information for his loan application. Because the bank received a low price of the vehicle at auction, it claimed a loss of $100,000 due to the defendant's conduct. The district attorney then charged him with several felonies. Over the prosecutor's objection, Attorney Dudley persuaded the judge to impose a PROBATIONARY sentence with no jail time if the defendant provided rapid restitution to the victim institution. The defendant did, in fact, provide such full restitution and successfully completed his term of probation. On defense motion, the court later DISMISSED the case.
  • U.S. v. W.R.: The federal government charged the defendant with causing more than $140,000 in losses as part of a credit card scheme. Attorney Dudley was able to negotiate a disposition pursuant to which the defendant received a sentence of only 15 months.