Kickbacks involve offering services or payments to influence a business or person, and are often associated with white-collar crime. They can occur in politics, government, medicine, and other industries. While some forms of kickbacks are legal, others are illegal and can result in prison time. Reciprocal relationships with other businesses are acceptable, but fraudulent representations are not.
Kickbacks are paying for or offering services with the intent to influence or get something from a business or person. Kickbacks can be less fancifully defined as kickbacks. They are often associated with white-collar crime and can occur in many fields of work or politics.
In politics, kickbacks could be used to secure influence over the vote by offering services or even campaign contributions. This type of financing is illegal, yet many still use it in one way or another. Also, in the government, bribes may be offered to get government approval for projects.
Perhaps most famous are the kickbacks for government officials who issue permits in exchange for profits or upfront payments. In these cases, the permits issued are usually made without the existing legal right to such a permit. For example, a housing inspector might issue an illegal building permit in exchange for a bribe.
While these bribes still exist, there are now laws regarding government officials accepting bribes in the United States. Government officials who accept bribes can face up to five years in prison. It should be noted that there are many government officials who would never accept a kickback.
In medical communities, bribes may exist to give doctors access to free samples of medicines in exchange for prescribing certain drugs. Indeed, these forms of kickbacks are quite blatant. You can’t go into most doctors’ offices without noticing the increase in the marketing of certain pharmaceuticals. One can use a clipboard that contains one drug ad, a pen with another, or look for a tissue box with another drug ad.
Currently, there are no legal penalties for a doctor accepting free office supplies or free drug samples. In fact, many doctors use these samples to reduce taxes and provide drugs to people in financial difficulty. These practices are considered illegal bribes only if the doctor agrees to prescribe certain drugs in exchange for these products. Many argue that such product placement often equates to product endorsements. However, this remains legal, as long as these backlashes do not influence a doctor’s treatment decisions.
In other businesses, kickbacks might be offered to companies who agree to recommend a particular business. For example, a bank that recommends a particular mortgage broker and receives a fee below that scale is kickback. A travel agent being rewarded for booking a particular hotel is also a form of kickback.
These actions may or may not be illegal and depend on whether the recommendation involves fraudulent representations of other organizations. For example, if a banker refers everyone to the same broker and claims to be the least expensive, when that’s not the case, the kickbacks, particularly if not collected as income, are illegal.
There is a lot to be said for establishing reciprocal relationships with other businesses. However, when these mutual relationships turn into fraud, they are illegal kickbacks. Normally if a person is affiliated with a group outside of his business, he has to claim this affiliation so that misrepresentation does not occur.
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