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False billing
View on Wikipedia | This article needs additional citations for verification. (February 2025) |
False billing, also known as fraudulent billing or billing fraud, is a fraudulent act of invoicing or otherwise requesting funds from an individual or firm without showing obligation to pay. This could be fraudulent billing for part of the work done (over-billing with the intent to defraud), or that no work was done at all.
Such notices are, for example, sent to owners of domain names, goods and/ or services not provided, or purporting to be legitimate renewal notices, although not originating from the owner's own registrar.[1] Other examples are overbilling and fraudulently adding fake fees and taxes (see below).
Attorney bills
[edit]According to the American Bar Association rules governing lawyer's ethics, a false bill, invoice, or statement, this would be a misrepresentation that could result in sanctions. An attorney has a fiduciary duty under Rule 1.1 to their client of competent representation, and competence with billing is part of that.[2] The lawyer has a specific duty under Rule 1.4 (b) to explain matters in order for them to make needed and informed choices about their lawyer's work.[3] There are many more specific requirements under ABA Rule 1.5, Fees, for example, the bill must be "reasonable", which has been defined in great detail since 2014.[4]
If a false bill is sent to a third party to pay, it would violate Rule 4.1, "Truthfulness In Statements To Others ... Misrepresentation."[5]
False billing has become a serious problem, according to the ABA Journal, whereby big law firms allegedly overbill clients.[6] By comparison, over-billing by small law firms is less likely; many small businesses tend to under-bill for a variety of reasons.[7]
Notable examples
[edit]- Akorn#History
- Booz Allen Hamilton#Procurement fraud settlement
- Drug rehabilitation#Criticism
- Dubin v. United States
- Federal District Metro (Brazil)
- Fontainebleau Las Vegas#Financial issues:_2009
- Lumen Technologies
- Operation LabScam
- Oswego Community Hospital
- Prem Reddy#Controversy and Prime Healthcare Services#Controversies
- Rick Scott
- RKO General
- Sumitomo Heavy Industries#History
- Toronto Community Housing#2013 Fraudulent billing
- Maryanne Trump Barry#Allegations of tax evasion
References
[edit]- ^ "False billing scams: Learn about scams that ask you or your business to pay fake invoices, how to avoid getting scammed and where to report false billing scams". Victoria, Australia Police official website. February 11, 2025. Retrieved February 26, 2025.
- ^ "ABA Rule 1.1: Competence: Client-Lawyer Relationship". 2025. Retrieved February 26, 2025.
A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.
- ^ "ABA Rule 1.4: Communications: Client-Lawyer Relationship". 2025. Retrieved February 26, 2025.
(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.
- ^ "Rule 1.5: Fees - Client-Lawyer Relationship". April 14, 2014. Retrieved February 26, 2025.
A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses. The factors to be considered in determining the reasonableness of a fee include the following: (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill ... (2) [it] ... will preclude other employment by the lawyer; (3) the fee customarily charged ... ; (4) the amount involved and the results obtained; (5) the time limitations ...; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer ...; and (8) whether the fee is fixed or contingent
- ^ "ABA Rule 4.1 Truthfulness In Statements To Others - Transactions With Persons Other Than Clients - Misrepresentation". 2025. Retrieved February 26, 2025.
- ^ Cassens Weiss, Debra (February 26, 2025). "ETHICS: Former practice chair allegedly overbilled clients by over $3.5M at 2 BigLaw firms, ethics complaint says". Retrieved March 1, 2025.
A former partner in the Chicago offices of two large international law firms is facing an ethics complaint alleging that he falsified billing records and caused clients to be overbilled by more than $3.5 million over a period of 20 years
- ^ "Billable Hours: A Small Law Firm's Guide to Maximizing Time and Profits". 22 August 2023. Retrieved 13 September 2025.
Types of fraud | |
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| Business-related | |
| Family-related | |
| Financial-related | |
| Food-related | |
| Government-related | |
| Healthcare | |
| Other types | |
