Insurance Fraud

Insurance fraud refers to the act of presenting inaccurate or false information to an insurance company in order to receive money from that insurance company. This may involve auto insurance, property insurance, homeowners insurance, health insurance, life insurance, or any other type of insurance.

A common form of fraud involving automobile insurance is staging accidents whereby fraudsters drive into the middle of busy roads with the intention of stopping suddenly. This causes drivers behind them to rear them, placing the fault on the other driver for driving too close or too fast behind them. These fraudsters will often make exaggerated claims of whiplash and other physical damages caused by the accident. Less dramatic is submitting false claims for services. Like all other types of fraud, the best defense is to convince the court that you had no fraudulent intent, and you only made a mistake(s).

Under California law, insurance fraud is what is known as a ‘wobbler’, which means that it may be charged as either a misdemeanor or a felony depending on the circumstances, i.e., the amount of money or assets involved and other circumstances, and whether or not the defendant has a criminal history.

There are varying degrees of fraud, beginning with small fabrications to very serious types of fraud. The latter often involve other crimes such as arson, destruction of property, theft, and faking accidents or injuries in order to collect large insurance policies.

Various branches within the Department of Insurance, such as the Investigation Division and the Fraud Division, work with law enforcement to investigate individuals and companies who are suspected of fraud, and ensure that they are prosecuted to the fullest extent of the law. If you are convicted of insurance fraud, the consequences may be severe. If your case is held at the federal level the consequences may be yet worse.

In addition to criminal charges being filed against you, the insurance company may also file a civil lawsuit against you under the RICO Act (Racketeering Influenced and Corrupt Organizations Act). This has become increasingly common in fraud and has resulted in guilty parties paying huge amounts of money in damages and restitution.