blog home White-Collar Crime Were You Accused of Accepting a Kickback?

Were You Accused of Accepting a Kickback?

By Los Angeles Criminal Defense Attorney on April 17, 2022

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

Are You Facing Criminal Charges?

You absolutely need a lawyer to represent you if you are under investigation for any type of criminal activity. Our experienced defense attorneys at Werksman Jackson & Quinn LLP will investigate the circumstances of your arrest and provide skilled counsel throughout the legal process. We know what it takes to win.

Call us today at (213) 688-0460 to schedule a free case evaluation.

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Posted in: White-Collar Crime