Why are kickbacks a crime

These brokers help to link individuals with other individuals that are willing to engage in a kickback scheme. In the case that a broker is used, one party or both parties usually pay the broker as a part of the kickback scheme.

Kickback schemes can also be more widespread. In the s, some companies that provided services to patients with Medicare would send payments to doctors if they referred their patients to them for services, regardless of if the patient needed the services the company provided.

These types of fraudulent acts led the United States government to pass an anti-kickback act in order to prevent these activities. The Anti-Kickback Act passed by Congress in bans government subcontractors and contractors from accepting or soliciting kickbacks.

Criminal charges for involvement in kickback schemes can be charged at both the federal and state levels. Use precise geolocation data. Select personalised content. Create a personalised content profile. Measure ad performance. Select basic ads.

Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. Your Money. Personal Finance. Your Practice. Popular Courses. What Is a Kickback? Key Takeaways A kickback is an illegal payment intended as compensation for preferential treatment or any other type of improper services received. Article Sources. Investopedia requires writers to use primary sources to support their work.

If a bank official is offered a bribe, he must disclose all information to the bank so that the situation may be addressed appropriately. Kickbacks are often associated with government fraud. The crime is committed in a variety of settings, however, including the healthcare industry and employee benefit or pension plans. Issuing or accepting bribes is a serious crime that may result in heavy fines or several years in prison. Both civil and criminal charges can be levied against those suspected of being involved in kickback schemes.

The Anti-Kickback Act of prohibits government contractors and subcontractors from issuing or accepting kickbacks. See, e. Fischer v. United States, U.