Were You Accused of Accepting a Kickback?
A kickback occurs when someone secretly provides some type of compensation to another person as a reward for doing something in an illicit manner. A kickback is a type of bribe, and anyone who offers or accepts a kickback may be subject to prosecution under California and federal law.
A kickback can be criminally prosecuted when it is proven that some type of payment or reward was secretly made or offered to somebody for helping facilitate a transaction. A key aspect of a kickback is that it is offered in secret. Rewards that are provided above board such as royalties or referral fees as part of a legal contract are not considered kickbacks.
Kickbacks Are Common in the Health Care Industry
The healthcare system is one area where kickbacks frequently occur. There is a great deal of federal money available to physicians and hospitals, and large sums of money are often involved when kickbacks are used to direct federal funds to a particular medical provider.
It is a violation of federal law when an individual, physician, hospital employee, or corporation accepts any type of reward or compensation for the following types of behavior:
a) referring patients for items or services reimbursable under a health care program
b) purchasing, leasing, or arranging any good, facility, service, or item reimbursable under a health care program
A kickback does not have to be a direct cash payment. For example, under California law a person may be guilty of taking a kickback if they secretly accept “any rebate, refund, commission, preference, patronage, dividend, discount, or other consideration for directing a patient to a particular provider.”
There Are Many Kinds of Kickbacks
Kickbacks can be used in any type of industry or endeavor where someone has an interest in achieving a certain type of result. Examples of kickbacks include:
- When a purchasing agent inflates the price of goods received and is given a secret fee
- When a pharmaceutical company provides exorbitant fees for research, speaking, or consulting to a doctor who frequently prescribes their drugs
- Cash benefits to encourage referrals
- “Fee splitting” arrangements where the referrer gets a percentage of the fee
- Payola in the music business where DJs are paid to play certain records
- Providing a medical practitioner with inducements such as low-priced office space or equipment for encouraging a hospital to purchase your equipment
The Consequences of Criminal Prosecution
People charged with offering or accepting a kickback face severe legal penalties. Under California law, it can be prosecuted as a misdemeanor or a felony. And even when it’s prosecuted as a misdemeanor, a defendant may receive up to 6 months in prison and a fine of up to $2500 for “the corrupt payment of funds or something of value to an employee who owes fiduciary obligation to an employer from another person desiring a benefit in some sort of exchange.”
Offering or providing kickbacks is also a federal crime, with penalties that include up to five years in prison and fines up to $25,000. This is a serious legal offense that is often investigated by the FBI.
A conviction for accepting or providing kickbacks may be used to enhance other sentences, resulting in considerable jail time. The consequences of a felony conviction may also include:
- Damaging your immigration status
- Harming your professional reputation
- Relinquishing your right to own firearms
- You must disclose your conviction when applying for public employment, applying for a state license, or testifying or giving a statement under oath
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