What is conspiracy to defraud the government?

Under 18 U.S.C. § 371, it's an agreement between two or more people to defraud the United States, combined with at least one overt act in furtherance of the conspiracy. In tax cases, this often accompanies evasion or false return charges.

Can I be convicted of conspiracy even if the fraud wasn't completed?

Yes. Conspiracy is a separate crime from the underlying fraud. You can be convicted of conspiracy even if the fraudulent scheme was never completed, as long as there was an agreement and an overt act.

What is a Klein conspiracy?

United States v. Klein extended 18 USC § 371's 'defraud the United States' clause to agreements to impede the lawful functions of the IRS. It's the government's go-to charge in multi-defendant tax fraud cases because it sweeps broadly and the overt act requirement is light.

Do I have to know about every part of the conspiracy?

No — § 371 requires knowing agreement to the unlawful objective, not knowledge of every act or every co-conspirator. The flip side: we defend by showing absence of agreement, lack of knowledge of unlawful purpose, or genuine withdrawal.

What's the sentencing exposure on a § 371 tax conspiracy?

Up to 5 years imprisonment and substantial fines, plus restitution. Sentencing guidelines drive heavily on tax loss, sophistication, role, and acceptance of responsibility — every one of which is a defense lever.

What is conspiracy to defraud the government?

Under 18 U.S.C. § 371, it's an agreement between two or more people to defraud the United States, combined with at least one overt act in furtherance of the conspiracy. In tax cases, this often accompanies evasion or false return charges.

Can I be convicted of conspiracy even if the fraud wasn't completed?

Yes. Conspiracy is a separate crime from the underlying fraud. You can be convicted of conspiracy even if the fraudulent scheme was never completed, as long as there was an agreement and an overt act.

What is a Klein conspiracy?

United States v. Klein extended 18 USC § 371's 'defraud the United States' clause to agreements to impede the lawful functions of the IRS. It's the government's go-to charge in multi-defendant tax fraud cases because it sweeps broadly and the overt act requirement is light.

Do I have to know about every part of the conspiracy?

No — § 371 requires knowing agreement to the unlawful objective, not knowledge of every act or every co-conspirator. The flip side: we defend by showing absence of agreement, lack of knowledge of unlawful purpose, or genuine withdrawal.

What's the sentencing exposure on a § 371 tax conspiracy?

Up to 5 years imprisonment and substantial fines, plus restitution. Sentencing guidelines drive heavily on tax loss, sophistication, role, and acceptance of responsibility — every one of which is a defense lever.

You Are Not The First. You Will Not Be The Last.

Conspiracy to Defraud the Government

Defense against conspiracy charges related to tax fraud schemes.

Federal Statute18 U.S.C. § 371

Max Prison5 years

Key ElementAgreement + overt act

Common WithOften charged alongside § 7201

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Legally reviewed byGregory McCauley Jr., Esq.

Tax Attorney · Villanova University School of Law · Admitted in Delaware, New Jersey, United States Tax Court

Last reviewedDecember 22, 2025

What This Actually Is — And How We End It

The Truth About Conspiracy to Defraud the Government — And What To Do Right Now

Conspiracy to defraud the government under 18 U.S.C. § 371 is charged when two or more people agree to impede IRS functions through deceit or dishonesty. It carries up to 5 years in prison and can be added to virtually any other tax crime charge.

McCauley Law Offices defends against conspiracy charges by challenging the existence of an agreement, the defendant's knowledge and participation, and the sufficiency of the government's evidence.

Conspiracy is a separate crime from the underlying fraud — the government can charge you with conspiracy even if the fraud was never completed. However, this also means we have two sets of elements to attack: the conspiracy itself and the alleged underlying crime.

What the Government Must Prove

An agreement between two or more people to defraud the United States
Knowledge and intent to participate in the conspiracy
At least one overt act in furtherance of the conspiracy (the act itself doesn't need to be illegal)

Defense Strategies

No agreement existed: Parallel conduct isn't conspiracy — people can independently make the same decisions
Withdrawal from conspiracy: If you took affirmative steps to withdraw and reported to authorities
No knowledge: You didn't know about the illegal purpose of the agreement
Severance: In multi-defendant cases, we seek to sever your case to avoid guilt by association

In multi-defendant tax fraud cases, the government often pressures co-conspirators to cooperate. If you've been contacted by investigators or learn that a business partner is cooperating, get legal representation immediately — before you're the last one without a defense strategy.

You Are Not Alone

People Just Like You Have Sat In This Exact Chair

They were terrified. They were ashamed. They thought they were the only one. Then they made one phone call — and everything changed.

Business Partners Charged with Tax Fraud Conspiracy

Two business partners were charged with conspiracy to defraud the IRS by underreporting cash income. We severed their cases, demonstrated our client was unaware of his partner's cash skimming, and achieved a full acquittal.

Co-Defendant Severance Drives Acquittal

In a multi-defendant § 371 case, we obtained severance for our client, isolated the proof against him, and secured an acquittal at trial while co-defendants pled.

Pre-Indictment Withdrawal Defense

A Chester County professional approached us after learning of a federal investigation involving a former business partner. We documented timely withdrawal from the venture and the client was never charged.

Every Day You Wait, The IRS Wins A Little More.

Penalties stack. Interest compounds. Legal options quietly disappear. One free call ends the spiral.

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From Panic To Peace Of Mind

Exactly How We Take This Off Your Shoulders

The hardest step is the first one. Everything after that, we carry for you. No surprises. No runaround. No lectures.

1
Identify the alleged agreement and your role
Conspiracy turns on agreement. We isolate exactly what the government claims you agreed to — and what the proof actually shows.
2
Develop the withdrawal or no-agreement defense
Affirmative withdrawal, lack of knowledge of unlawful purpose, or mere association — each is a recognized defense with specific proof requirements.
3
Pursue severance and motion practice
Multi-defendant cases live or die on pretrial motions. We move to sever, suppress, and exclude where the law allows.
4
Engage prosecutors pre-indictment when possible
Pre-charging advocacy can result in declination, downgraded charges, or cooperation arrangements that protect long-term interests.
5
Prepare for trial or structured plea
Either path is built from day one — exhibits, witnesses, sentencing mitigation, and post-conviction strategy.

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"McCauley Law resolved my $180,000 IRS debt for a fraction of what I owed. I was facing wage garnishment and bank levies — they stopped everything and negotiated an incredible settlement."

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"After years of IRS letters and threats, Gregory and his team got my penalties completely removed. They were professional, responsive, and genuinely cared about my case."

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"They stopped a wage garnishment within 48 hours and ultimately settled my case for pennies on the dollar. I can't recommend them enough."

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"I hadn't filed taxes in 5 years and was terrified. McCauley Law handled everything — filed all my returns, negotiated with the IRS, and got my penalties reduced by 80%."

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"As a small business owner, I was facing $250,000 in payroll tax debt. Their team negotiated an Offer in Compromise that saved my business."

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"My ex-husband's tax fraud left me liable for $135,000. McCauley Law got full innocent spouse relief — I owe nothing. They gave me my life back."

Maria G.

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