Kickbacks are a collusion between two parties in which a contract is granted in return for the contractor agreeing to "kickback" a portion of the collected fees to the decision maker. It is effectively a quid pro quo bribe, and it is a crime for a contractor to offer, or an official to solicit, a kickback. Kickbacks can be made in the form of money, gifts, services, or anything of value.

Kickback Laws

Kickbacks take place in a virtually every industry, as they can take place wherever contracts are up for bid, or there is competition for services. Prosecutions are most frequent in the public sector, focusing on politics, public works, and the health care industry. There are several federal laws that prohibit different types of kickbacks, which can be punishable with up to 5 years in prison and fines of up to $25,000 per violation. These include the following

  • 42 U.S.C. § 1320a-7b - The Federal Anti-Kickback Statute, which deals with kickbacks involving services covered by Medicare, Medicaid, or any federal program involving health benefits. It prohibits knowingly and willfully offering, soliciting, paying, or receiving payments to induce referrals of services covered by a program. Convictions require that the parties must have "intended" to engage in a transaction prohibited by the law, though it does not require that they were aware of the laws prohibiting the activity.
  • 18 U.S.C § 874 - This statute prohibits any means of soliciting a kickback from any public works employee who is engaged in repairing or constructing any government building. It also includes prohibitions against soliciting kickbacks from anyone employed in any public works project that is financed by loans or grants from the federal government.
  • 12 U.S.C. § 2607 - This involves federally related mortgage loans, prohibiting fees and kickbacks for referrals of real estate settlement services.

Contact our Law Offices

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