Fraud prosecution

In 1998, Environmental Tune-Up, Inc., closed after default of its main technology supplier. As of October, 1998, the company was prosecuting with the City of Houston against the inventor for misrepresentation and fraud (personal communication with Michael Mandeville, Environmental Tune-Up, 1998). 

Introduction Criminal prosecutions of violations of the FDCA are intended to further the goal of protecting the health and safety of the public. The FDA historically has not pursued criminal charges unless the defendant shows a continuous or repetitive course of violative conduct, with the exception of intentional violations, fraud, or danger to health.18... 

From a legal perspective, the chief executive officer (CEO) or president of a firm is considered the most responsible official and thereby becomes the most liable. Therefore, he is subject to criminal prosecution should the organization be found to violate the Food, Drug and Cosmetic (FDC) Act. One of the most serious infractions is fraud, that is, the intent to mislead the FDA. Hence, it is incumbent on the CEO to have well-qualified personnel in the organization and an organizational structure that reinforces quality. 

U.S. regulatory ramifications for non-compliance include invoking the application integrity policy (for fraud), serious inspection observations, a warning letter, import alerts, withheld research and/or product approvals, cancellation of government contracts, product recalls, seizure, consent decree of permanent injunction, civil money penalties, suspension or revocation of licenses, and prosecution (including indictments and temporary or permanent debarment, if found guilty). ... 

There has been much published on the incidence, detection and prosecution of publication fraud, rather less on fraud and misconduct in clinical research, but we should be equally concerned about research fraud. The Consensus Conference on Misconduct in Biomedical Research convened by the Faculty of Pharmaceutical Medicine and the Royal College of Physicians of Edinburgh in 1999 defined research misconduct as behavior by a researcher, intentional or not, that falls short of good ethical and scientific standards . Frank Wells, co-founder of MedicoLegal Investigations Ltd., the only specialist research fraud investigation company in Europe, prefers the generation of false data with the intention to deceive . 

Research fraud is a reality, but in the past, healthcare professionals and academia have sometimes chosen to turn a blind eye, and pharmaceutical companies tacitly condoned it by choosing not to investigate fully and to bring prosecutions. The climate now is changing, driven by all those parties, but medical research is still vulnerable in the absence of any effective mechanism to combat and detect fraud. 

Three elements are necessary to improve the situation. There must be official bodies in each country with real powers to investigate and prosecute clinical research fraud. There must be a widespread and unequivocal acceptance that failure to act on suspicions of fraud is itself serious misconduct. And finally there must be an... 

Staff must not mislead WHO or procurement agencies in relation to their qualifications and/or experience. Any case of misrepresentation of qualifications or experience will be treated as fraud and may eventually lead to prosecution. No future employment in any capacity by any WHO or United Nations organization will be possible at any time. 

The United States Code contains a number of criminal provisions related to enforcement of the FD C Act. These laws prohibit any criminal conspiracy, false reports to the government, mail fraud, bribery, perjury, and other similar illegal activity. FDA has in fact used these provisions on a number of occasions to bring criminal prosecution against individuals and companies who have violated the FD C Act. 

Grainne McKeever, Detecting, Prosecuting and Punishing Benefit Fraud The Social Security Administration (Fraud) Act 1997 , Modem Law Review 62 (March 1999), p. 269. 

Internet fraud has been widely identified across the global as one of the fastest growing and most pervasive forms of white collar crime. The multicultural and multinational nature of e-business has resulted in diverse views on how the cyberspace should be regulated and how cyber ethics should be enforced. For example, encryption of data transmission over the internet is an effective means of curbing e-business abuses. But many third world countries are still not in favor of this practice. On die other hand, investigation and prosecution of internet abuses usually require cooperation of law enforcement authorities from two or more nations. The lack of cooperation from any one of these nations will make it impossible to prosecute the cyber criminals who will in turn continue to pose threats in the e-business arena. Till the world reaches an agreement on how the cyber space should be regulated, companies with e-business activities from all industries have to contend with cyber ethic issues for many years to come. 

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