Which scenario is an example of a kickback scheme?

Which scenario is an example of a kickback scheme?

• A. A government official demands money in exchange for making a business decision
• B. A vendor inflates an invoice submitted to the company for payment
• C. A partner negotiates a higher commission in a legitimate arrangement
• D. An employee receives a payment for directing excess business to a vendor

Answer: (D)

Kickbacks are covert payments made to someone who has influence over a business decision, awarded specifically for steering that business to a particular vendor after the deal is made. This scenario fits that pattern: an employee receives a payment in exchange for directing excess business to a specific vendor. The payment is tied to the act of favoring that vendor, typically hidden or not disclosed, which corrupts procurement and creates a personal incentive to steer business rather than act in the organization’s best interest. The other situations involve different improper acts. Direct demands for money to influence a decision by a government official describe a bribery scenario, not a kickback. Inflating an invoice is fraudulent billing, not a reward routed back to someone who influenced the decision. Negotiating a higher commission in a legitimate arrangement is a normal, disclosed compensation practice.

Kickbacks are covert payments made to someone who has influence over a business decision, awarded specifically for steering that business to a particular vendor after the deal is made. This scenario fits that pattern: an employee receives a payment in exchange for directing excess business to a specific vendor. The payment is tied to the act of favoring that vendor, typically hidden or not disclosed, which corrupts procurement and creates a personal incentive to steer business rather than act in the organization’s best interest.

The other situations involve different improper acts. Direct demands for money to influence a decision by a government official describe a bribery scenario, not a kickback. Inflating an invoice is fraudulent billing, not a reward routed back to someone who influenced the decision. Negotiating a higher commission in a legitimate arrangement is a normal, disclosed compensation practice.