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How Many Ways Can You Spell "Fraud"?

Posted By Gavriel Swerling On July 26, 2012 @ 12:07 pm In Legal | Comments Disabled

The Financial Services and General Government Appropriations Act of 2013, introduced in the Senate last month, would make it a felony to make false statements on affidavits in order to receive federal funding. Sounds like a good idea, doesn’t it?

Now there will finally be a law on the books that will enable federal prosecutors to go after liars who cost the public money. Oh wait—that law is already on the books.

Fraud has been a common law crime for hundreds of years, and it is already a felony in every state as well as on the federal level. There are federal statutes explicitly criminalizing mail fraud, wire fraud, conspiracy to commit fraud, health care fraud, and so forth. (There is even a bill before Congress that would specifically criminalize the mislabeling of maple syrup.) The False Claims Act, which has been on the books since 1863, also criminalizes the act of presenting “a false claim for payment.” The new anti-fraud bill is completely unnecessary.

Perhaps the problem is that the current punishments for fraud are not sufficiently onerous to deter this crime. The bill would impose a $4,000 fine and up to one year in prison, in addition to the penalty for any other offense that a culprit commits. This new punishment would sit atop the 30-year sentence (and more than $1 million in fines) already available. How many criminals think to themselves: I can risk committing fraud if I’ll be facing only 30 years in prison, but 31 years is just too much.

How will this new anti-fraud statute benefit society? It won’t. We already have more than enough laws to combat fraud. If Congress believes that there is a significant, unaddressed fraud crime spree, then what we might need is more FBI agents, prosecutors, defense counsel, and so forth. But that would require Congress to spend real money; this provision effectively costs nothing.

However, it also does nothing to fight fraud. The bill does not better equip law enforcement agents and prosecutors to fight crime, and there is no new deterrent effect on would-be criminals. All it does is allow politicians to claim that they are being tough on crime.

The public needs to stop applauding these empty gestures and start demanding actual results.

Gavriel Swerling is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please visit http://www.heritage.org/about/departments/ylp.cfm [1].


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