Published 2026 | TIKC NewsWire
Most contractors have heard of the False Claims Act, which is a civil law that costs money. Fewer know about a criminal cousin called Major Fraud Against the United States. It sits in the law books at 18 U.S.C. 1031, and it is aimed straight at fraud on bigger government contracts, generally those worth $1 million or more. The word that matters here is criminal. This is not just paying money back. This is fines that can run into the millions and, for the people involved, the possibility of prison. If your business is growing into larger awards, this is a line you need to understand.
What this law actually covers
Major Fraud targets a scheme to defraud the United States, or to get money or property by false pretenses, in connection with a government contract or related program of a certain size. In plain words, if you set up a plan to cheat the government on a large contract, whether by lying about what you delivered, inflating what you charged, or faking what you did, this is the law that can turn a billing dispute into a criminal case. It was written to go after serious, deliberate fraud on the contracts that cost taxpayers the most.
Why the dollar size changes everything
As your contracts get bigger, the government’s attention gets sharper. A small invoice error is one thing. A pattern of false billing on a multimillion-dollar award is the kind of case prosecutors build a criminal file around. The same false paperwork that creates civil liability can also be a false statement and feed a Major Fraud charge. Growth is good, but it raises the stakes on every certification you sign, which is why your billing has to get more disciplined, not less, as you scale.
The people behind the company are exposed
Criminal fraud laws do not just punish the business. They reach the people who ran the scheme. An owner or manager who directed false billing on a large contract can face charges personally, which is the hard edge of individual accountability in government work. This is why you never let pressure to hit a number push you into shading what you bill. On a large contract especially, how you handle your progress payments and interim invoices is exactly where this risk lives.
What to do now
- Respect the size line. Treat contracts of $1 million or more as higher-risk and build tighter billing controls around them.
- Bill only what is real. Every invoice should match delivered work and documented cost.
- Separate duties. Do not let one person create, approve, and submit claims without a second set of eyes.
- Kill the pressure to pad. Make clear to your team that no revenue target justifies a false bill.
- Get help early. If you spot a serious billing problem on a big award, talk to counsel before it grows.
Winning larger contracts is the goal, and you should chase it. Just carry the discipline up with you. Bill honestly, watch your big awards closely, and the growth that builds your business never turns into the kind of case that ends it. Brick by brick.
FAQ
What is Major Fraud Against the United States?
It is a criminal law at 18 U.S.C. 1031 targeting schemes to defraud the government on contracts and programs, generally those worth $1 million or more. It carries heavy fines and possible prison time.
How is it different from the False Claims Act?
The False Claims Act is civil and costs money. Major Fraud is criminal and can mean prison for the people involved, not just payment.
Why does the contract size matter?
The law is aimed at larger contracts, and the government gives bigger awards more scrutiny. The same false paperwork carries much higher stakes at scale.
How do I protect my company?
Build strong billing controls on large awards, bill only for real delivered work, separate who creates and approves claims, and remove any pressure to inflate numbers.
Sources
18 U.S.C. 1031. Major fraud against the United States. (2026).
U.S. Department of Justice. (2026). Justice Manual, guidance on procurement fraud prosecutions.
This article is general information, not legal advice.
About the Author
Melanie Patterson
Founder and CEO of Team Integrity Knowledge Center and creator of GovCon iSource. Former nurse turned entrepreneur with over 10 years guiding small, women-owned, and minority-owned businesses to over $10 million in government awards. Build, grow, scale, brick by brick. Contact
