Michigan Laws 324.21548 – Knowledge of false, misleading, or fraudulent request for payment as felony or subject to civil fine; retroactive application; “fraudulent” or “fraudulent practice” defined; action brought by attorney
Current as of: 2023 | Check for updates
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Attorney's Note
Under the Michigan Laws, punishments for crimes depend on the classification. In the case of this section:| Class | Prison | Fine |
|---|---|---|
| H | up to 5 years |
Terms Used In Michigan Laws 324.21548
- Affidavit: A written statement of facts confirmed by the oath of the party making it, before a notary or officer having authority to administer oaths.
- Authority: means the underground storage tank authority created in section 21523. See Michigan Laws 324.21502
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Claim: means the submission by the owner or operator or his or her representative of documentation on an application requesting payment by the authority. See Michigan Laws 324.21502
- Deductible amount: means the amount of corrective action costs or indemnification costs that are required to be paid by an owner or operator as provided in section 21510a. See Michigan Laws 324.21502
- Department: means the department of environmental quality. See Michigan Laws 324.21502
- Fraud: Intentional deception resulting in injury to another.
- Fund: means the underground storage tank cleanup fund created in section 21506b and includes the bond proceeds account established within the fund. See Michigan Laws 324.21502
- Indemnification: means indemnification of an owner or operator for a legally enforceable judgment entered against the owner or operator by a third party, or a legally enforceable settlement entered between the owner or operator and a third party, compensating that third party for bodily injury or property damage, or both, caused by an accidental release as those terms are defined in R 29. See Michigan Laws 324.21502
- Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
- Lien: A claim against real or personal property in satisfaction of a debt.
- Oath: A promise to tell the truth.
- oath: shall be construed to include the word "affirmation" in all cases where by law an affirmation may be substituted for an oath; and in like cases the word "sworn" shall be construed to include the word "affirmed". See Michigan Laws 8.3k
- Operator: means that term as it is defined in section 21303 or a person to whom an approved claim has been assigned or transferred. See Michigan Laws 324.21502
- Owner: means that term as it is defined in section 21303. See Michigan Laws 324.21502
- Person: means an individual, partnership, corporation, association, governmental entity, or other legal entity. See Michigan Laws 324.21503
- Personal property: All property that is not real property.
- Refined petroleum: means aviation gasoline, middle distillates, jet fuel, kerosene, gasoline, residual oils, and any oxygenates that have been blended with any of these. See Michigan Laws 324.21503
- Refined petroleum fund: means the refined petroleum fund established under section 21506a. See Michigan Laws 324.21503
- Refined petroleum underground storage tank: means an underground storage tank system used for the storage of refined petroleum. See Michigan Laws 324.21503
- Release: means that term as it is defined in section 21303. See Michigan Laws 324.21503
- removed: means a physical transfer other than by evaporation, loss, or destruction of refined petroleum or a refined petroleum product from a refiner, pipeline terminal operator, or marine terminal operator. See Michigan Laws 324.21503
- Restitution: The court-ordered payment of money by the defendant to the victim for damages caused by the criminal action.
- Site: means that term as it is defined in section 21303. See Michigan Laws 324.21503
- state: when applied to the different parts of the United States, shall be construed to extend to and include the District of Columbia and the several territories belonging to the United States; and the words "United States" shall be construed to include the district and territories. See Michigan Laws 8.3o
- Subpoena: A command to a witness to appear and give testimony.
- Underground storage tank system: means that term as it is defined in section 21303. See Michigan Laws 324.21503
- Work invoice: means a list of goods or services for costs of corrective action related to a claim, including a statement of the amount due. See Michigan Laws 324.21503
(1) A person who makes or submits or causes to be made or submitted either directly or indirectly any statement, report, affidavit, application, claim, bid, work invoice, or other request for payment or indemnification under this part knowing that the statement, report, application, claim, bid, work invoice, or other request for payment or indemnification is false or misleading is guilty of a felony punishable by imprisonment for not more than 5 years or a fine of not more than $50,000.00, or both. In addition to any penalty imposed under this subsection, a person convicted under this subsection shall pay restitution to the authority for the amount received in violation of this subsection.
(2) A person who makes or submits or causes to be made or submitted either directly or indirectly any statement, report, application, claim, bid, work invoice, or other request for payment or indemnification under this part knowing that the statement, report, affidavit, application, claim, bid, work invoice, or other request for payment or indemnification is false, misleading, or fraudulent, or who commits a fraudulent practice, is subject to a civil fine of not more than $50,000.00 or twice the amount submitted, whichever is greater. In addition to any civil fine imposed under this subsection, a person found responsible under this subsection shall pay restitution to the authority for the amount received in violation of this subsection. The legislature intends that this subsection be given retroactive application.
(3) As used in subsection (2), “fraudulent” or “fraudulent practice” includes, but is not limited to, the following:
(a) Submitting a work invoice for the excavation, hauling, disposal, or provision of soil, sand, or backfill for an amount greater than the legal capacity of the carrying vehicle or greater than was actually carried, excavated, disposed, or provided.
(b) Submitting paperwork for services or work provided that was not in fact provided or that was not directly provided by the individual indicated on the paperwork.
(c) Contaminating an otherwise clean resource or site with contaminated soil or product from a contaminated resource or site.
(d) Returning any load of contaminated soil to its original site for reasons other than remediation of the soil.
(e) Causing damage intentionally or as the result of gross negligence to a refined petroleum underground storage tank system, which damage results in a release at a site.
(f) Placing a refined petroleum underground storage tank system at a contaminated site where no refined petroleum underground storage tank system previously existed for purposes of disguising the source of contamination or to obtain funding under this part.
(g) Submitting a work invoice for the excavation of soil from a site that was removed for reasons other than removal of the refined petroleum underground storage tank system or remediation.
(h) Any intentional act or act of gross negligence that causes or allows contamination to spread at a site.
(i) Registration of a nonexistent refined petroleum underground storage tank system with the department.
(j) Loaning to an owner or operator the deductible amount and then submitting or causing to be submitted inflated claims or invoices designed to recoup the deductible amount.
(k) Confirming a release without simultaneously providing notice to the owner or operator.
(l) Inflating bills or work invoices, or both, by adding charges for work that was not performed.
(m) Submitting a false or misleading laboratory report.
(n) Submitting bills or work invoices, or both, for sampling, testing, monitoring, or excavation that are not justified by the site condition.
(o) Falsely characterizing the contents of a refined petroleum underground storage tank system for purposes of obtaining funding under this part.
(p) Submitting or causing to be submitted bills or work invoices by or from a person who did not directly provide the service.
(q) Characterizing legal services as consulting services for purposes of obtaining funding under this part.
(r) Misrepresenting or concealing the identity, credentials, affiliation, or qualifications of principals or persons seeking, either directly or indirectly, funding or approval for participation under this part.
(s) Falsifying a signature on a claim application or a work invoice.
(t) Failing to accurately disclose the actual amount and carrier of unencumbered insurance coverage available for new environmental impairment or professional liability claims.
(u) Any other act or omission of a false, fraudulent, or misleading nature undertaken in order to obtain funding under this part.
(4) The attorney general or county prosecutor may conduct an investigation of an alleged violation of this section and bring an action for a violation of this section.
(5) If the attorney general or county prosecutor has reasonable cause to believe that a person has information or is in possession, custody, or control of any document or records, however stored or embodied, or tangible object which is relevant to an investigation of a violation or attempted violation of this part or a crime or attempted crime against the fund, the attorney general or county prosecutor may, before bringing any action, make an ex parte request to a magistrate for issuance of a subpoena requiring that person to appear and be examined under oath or to produce the document, records, or object for inspection and copying, or both. Service may be accomplished by any means described in the Michigan court rules. Requests made by the attorney general may be brought in Ingham county.
(6) If a person objects to or otherwise fails to comply with a subpoena served under subsection (5), an action may be brought in district court to enforce the demand. Actions filed by the attorney general may be brought in Ingham county.
(7) The attorney general or county prosecutor may apply to the district court for an order granting immunity to any person who refuses to provide or objects to providing information, documents, records, or objects sought pursuant to this section. If the judge is satisfied that it is in the interest of justice that immunity be granted, he or she shall enter an order granting immunity to the person and requiring the person to appear and be examined under oath or to produce the document, records, or object for inspection and copying, or both.
(8) A person who fails to comply with a subpoena issued pursuant to subsection (5) or a requirement to appear and be examined pursuant to subsection (7) is subject to a civil fine of not more than $25,000.00 for each day of continued noncompliance.
(9) In addition to any civil fines or criminal penalties imposed under this part or the criminal laws of this state, the person found responsible shall repay any money obtained directly or indirectly under this part. Money owed pursuant to this section constitutes a claim and lien by the authority upon any real or personal property owned either directly or indirectly by the person. This lien shall attach regardless of whether the person is insolvent and may not be extinguished or avoided by bankruptcy. The lien imposed by this section has the force and effect of a first in time and right judgment lien.
(10) Subsection (1) does not preclude prosecutions under other laws of the state including, but not limited to, section 157a, 218, 248, 249, 280, or 422 of the Michigan penal code, 1931 PA 328, MCL 750.157a, 750.218, 750.248, 750.249, 750.280, and 750.422.
(11) All civil fines collected pursuant to this section shall be apportioned in the following manner:
(a) Fifty percent shall be deposited in the general fund and shall be used by the department to fund fraud investigations under this part.
(b) Twenty-five percent shall be paid to the office of the county prosecutor or attorney general, whichever office brought the action.
(c) Twenty-five percent shall be paid to a local police department or sheriff’s office, or a city or county health department, if investigation by that office or department led to the bringing of the action. If more than 1 office or department is eligible for payment under this subsection, division of payment shall be on an equal basis. If there is not a local office or department that is entitled to payment under this subdivision, the money shall be forwarded to the state treasurer for deposit into the refined petroleum fund.