Strategic Federal And State Criminal Defense

8 reasons authorities may suspect you of taking kickbacks

On Behalf of | Aug 25, 2021 | White Collar Crimes |

If your line of work includes procuring bids for contracts, providing business to other agencies or referring clients to specialists, you probably find the job quite competitive. It is not always the lowest price that can win a contract, and often you must weigh numerous factors before awarding the job. 

In some cases, you will deal with contractors or service providers who are willing to offer certain incentives if you send business their way. If this offering goes beyond the boundaries of the bidding process, you may be dealing with a kickback. Offering kickbacks is against the law; however, accepting kickbacks is also a serious violation. 

Why are they investigating me? 

A kickback is a gift of money or other valuables that someone offers you in exchange for preferential treatment during contract bidding or similar decisions. For example, contractors may promise you a percentage of profits or other enticements if you choose or recommend their company for contracts open for bids. 

While the lowest bidder is not always the most qualified for the job, authorities might suspect you are involved in a kickback scheme if you fail to consider lower bids or if you do not establish a fair and competitive process for submitting bids for a project. Other signs that could cause investigators to suspect you are potentially receiving kickbacks include: 

  • You work alone in your department with little oversight or supervision. 
  • You accept bids that are excessively high for the services or goods you procure. 
  • You or your employees have an unusually personal rapport with vendors or service providers. 
  • Even if a contractor provides substandard service, you continue to award contracts to him or her. 
  • The staff complains that you or other managers force them to work with certain vendors or you ignore their suggestions to use better or cheaper vendors. 
  • Vendors consistently miss delivery dates. 
  • The vendors you use have a history of issues with legal or regulatory agencies. 
  • You are underpaid for the work you do, and authorities might suspect you are trying to supplement your low wages. 

You or your California business might also be targets of authorities simply because the industry in which you work is known for kickback schemes. Additionally, if you work with certain foreign countries, you may deal with officials who expect kickbacks as a normal part of doing business. Nevertheless, the law prohibits giving or accepting kickbacks between a company or individual and any companies listed with the U.S. Securities and Exchange Commission. A conviction for violating this law carries severe penalties.