Diligent Federal Attorneys Defending Allegations of Fraud
In terms of federal prosecution, 18 U.S.C. Section 1349 is one of the government’s most-potent tools for exposing targets of federal investigations to severe criminal penalties. Titled, “Attempt and Conspiracy,” 18 U.S.C. Section 1349 provides for prosecution in cases even where individuals and organizations are unsuccessful in committing a federal offense, and even if they ultimately decide not to engage in a proposed criminal enterprise. The law states:
“Any person who attempts or conspires to commit any offense under this chapter shall be subject to the same penalties as those prescribed for the offense, the commission of which was the object of the attempt or conspiracy.”
You read that correctly. The penalties for actually committing a federal crime and for attempting or conspiring to commit a federal crime are the same. This applies to all offenses outlined in Chapter 63 of Title 18 of the United States Code, including bank fraud, mail fraud, health care fraud, securities fraud, and wire fraud.
What Is an Attempt?
Despite establishing severe penalties for attempt and conspiracy (many federal offenses in Chapter 63 carry the potential for enormous fines and years or decades behind bars), 18 U.S.C. Section 1349 does not actually define “attempts” or “conspires.” As a result, in order to understand these offenses, it is necessary to look to judicial decisions interpreting and applying the law.
Under federal law, there are two primary elements of a punishable attempt to commit a crime. These are:
- Intent to commit the underlying substantive offense, and
- Taking some “substantial step” toward committing the underlying offense.
In order for federal prosecutors to obtain a conviction for attempt under 18 U.S.C. Section 1349, proof of both elements above is required. Simply intending to commit a criminal offense does not constitute an attempt – and likewise – doing something that happens to be a “substantial step” toward a federal offense without the intent to commit a crime is not enough to establish criminal culpability. However, the attempt clause of 18 U.S.C. Section 1349 still provides government attorneys with broad prosecutorial discretion, and attempt charges are commonplace in federal fraud investigations.
What constitutes a “substantial step” for purposes of an attempt charge under 18 U.S.C. Section 1349? The courts have made clear that “mere preparations” are not enough. Rather, prosecutors must establish that the target of an investigation has taken an action which is both corroborative of intent and which, if uninterrupted, could have resulted in the commission of the underlying substantive offense. As a result, both the intent and substantial step elements of an “attempt” are extremely fact-dependent. They are also largely subjective. This provides for both widespread prosecution and a bevy of potential exculpatory defenses.
What Is a Conspiracy?
While a conspiracy under 18 U.S.C. Section 1349 involves more than an attempt, conspiracy prosecutions are just as common. Therefore, health care providers and others facing investigations for fraud-related offenses must address the potential for conspiracy charges when defending against the government’s substantive fraud allegations.
For purposes of 18 U.S.C. Section 1349, a conspiracy is defined as an agreement between two or more individuals to commit a substantive offense under Chapter 63 (i.e., bank fraud or health care fraud), followed by an “overt act” toward commission of the substantive offense. Prosecutors can establish the existence of a conspiracy in one of two ways:
- A hub-and-spoke conspiracy, which involves multiple co-conspirators who work with a central figure, but who do not conspire amongst themselves. An example of a hub-and-spoke conspiracy would be a health care practice in which one doctor works with multiple pharmacists to dispense illegal and medically-unnecessary opioid medications, but where the pharmacists all operate independently of one another.
- A chain conspiracy, which involves multiple individuals who each play a role in a chain of activities or events culminating in a substantive offense under Chapter 63. In chain conspiracy cases, each member of the conspiracy is deemed to be responsible for the acts of the entire chain, even if their role is minimal, and even if they are isolated from other members of the chain.
As with an attempt, successful commission of a substantive crime under Chapter 63 is not necessary to establish conspiracy liability. This is one reason why prosecutors routinely pursue conspiracy charges in federal fraud investigations. Even if the conspiracy fails or falls apart before a substantive offense is committed – prosecutors can still pursue charges with penalties equal to those imposed against individuals who successfully engage in various forms of fraud.
Defenses to Attempt and Conspiracy Charges Under 18 U.S.C. Section 1349
There are numerous potential defenses to attempt and conspiracy allegations under 18 U.S.C. Section 1349, and determining which defenses are available in any particular case requires a critical assessment of the relevant facts and the underlying substantive offense (or offenses) involved. Some of the defenses most-commonly asserted against federal attempt and conspiracy allegations include:
1. Lack of Intent
If the government cannot prove that you intended to commit a crime, then it cannot convict you of an attempt crime or involvement in a criminal conspiracy. Lack of intent is often a key defense in federal fraud investigations, as the government must be able to use the available evidence to prove beyond a reasonable doubt that you intended to commit fraud.
2. No “Substantial Step” or “Overt Act”
Even if prosecutors can prove that you intended to commit a crime, they will not be able to convict you in the absence of evidence of a substantial step (in the case of attempt) or an overt act (in the case of conspiracy) toward the commission of the underlying offense.
3. No Agreement
In order to prove a conspiracy, prosecutors must prove the existence of an agreement. If you can challenge the prosecution’s evidence that you agreed to work with someone else to commit a crime, this can be sufficient to avoid charges for conspiracy under 18 U.S.C. Section 1349.
Speak with a Skilled Federal Defense Lawyer at Oberheiden, P.C.
If you are being targeted in a federal investigation, it is important that you engage experienced defense counsel as soon as possible. The attorneys at Oberheiden, P.C. have decades of experience in federal criminal cases as both defense lawyers and former DOJ prosecutors, and we represent clients in federal investigations and prosecutions nationwide. To get started with a free and confidential case assessment, please call (888) 519-4897 or request an appointment online now.
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