Common Charges For California Insurance Fraud
The seriousness of a fraud charge is often underestimated. As a result of insufficient legal representation, thousands of people who have been wrongfully convicted face unnecessary sentences and penalties. The truth is that a fraud conviction can have far-reaching consequences in your life. If you have been convicted of fraud, you must retain the services of a Criminal Defense Attorney with the necessary expertise to safeguard your future and reputation.
Fraud comes in many forms and is one of the most popular forms of white-collar crime. Even if the word "fraud" isn't included in the proceedings against you, suspected crimes like embezzlement may be classified as fraud and subject you to the same penalties. Any suspected crime in which someone is accused of using deceit or dishonesty for financial or personal gain is referred to as fraud.
Insurance Fraud Offenses in California
When you try to collect insurance premiums or benefits to which you are not otherwise entitled, you are committing California insurance fraud.
Insurance Fraud in Automobiles
When a person makes an intentionally false insurance claim or otherwise deceives an insurance provider to obtain benefits to which he or she is not legally entitled, this is known as automobile insurance fraud. In California, insurance fraud is typically charged as a crime, punishable by up to five years in state prison. You might need a Criminal Law Attorney to help you overcome it.
You commit auto insurance fraud if you do any of the following things, according to the California Penal Code:
To collect car insurance proceeds, intentionally harm, cover, or abandon your vehicle.
Submit a knowingly false auto insurance claim for a vehicle loss due to injury, destruction, or theft.
To defraud, make two (2) or more auto insurance claims for the same loss.
Intentionally cause or engage in a car accident to fraudulently claim auto insurance proceeds
Present or plan any written or oral declaration that includes false or misleading details as part of an insurance claim or false claims that you reside in California on an application for car insurance.
It is also a form of criminal auto insurance fraud for the following reasons:
A business owner or employee soliciting, referring, or accepting any business from someone who plans to commit auto insurance fraud.
An auto repair shop owner or employee is offering insurance brokers or adjusters a fee or profit-sharing agreement (a "kickback") in exchange for referring policyholders to their shop (this offense overlaps with commercial bribery in California).
Sanctions
The majority of forms of auto insurance fraud in California are felonies.
However, certain types of auto insurance fraud in California are wobblers, meaning they can be prosecuted as either misdemeanors or felonies, such as preparing or filing false claims or the forms that companies or auto shop members perpetrate.
Vehicle insurance fraud will result in felony prison sentences ranging from sixteen (16) months to five (5) years.
As a misdemeanor, auto insurance fraud will result in a one-year county jail sentence and/or a fine.
Employees or company owners defrauding auto insurance
Owners, officials, and employees of auto-related companies may break California's auto insurance laws in various ways, exposing themselves to criminal liability.
There are some of them:
Any form of business that solicits accepts or refers business to or from any individual or entity with knowledge of, or careless disregard for, that person's or entity's intention to commit auto insurance fraud.
An auto repair shop that pays an insurance agent, broker, or adjuster a commission, fee, profit-sharing, or other forms of compensation in return for referring policyholders to shop for auto insurance-covered repairs.
What does California law mean when it comes to auto insurance fraud?
In California, the legal concept of auto insurance fraud varies depending on which portion of the California Penal Code you are accused of violating.
This section will cover the most common types of California auto insurance fraud.
PC 548 Penal Code causing damage to a car or abandoning it
The following are prohibited under California Penal Code 548 PC:
An automobile or other motor vehicle that is protected against loss or damage is injured, destroyed, hidden, abandoned, or disposed of.
To defraud or cause harm to the insurance provider.
The term "intent to defraud" refers to the intention to deceive the insurance provider into defrauding them of money or damaging their legal, financial, or property rights. Even if the insurance provider never loses money due to your conduct, and even if the vehicle is not yours, you may be found guilty of auto insurance fraud by damaging, destroying, or hiding/abandoning a car.
Fraudulent claims are punishable under Penal Code 550 PC.
Several types of California car insurance fraud are covered by California Penal Code 550 PC. One of these is presenting a false or fraudulent claim for theft, loss, injury, or conversion of a motor vehicle.
This form of auto insurance fraud is legally described as follows:
You made a false or fraudulent demand for reimbursement for a theft loss.
A motor vehicle, a motor vehicle component, or the contents of a motor vehicle is destroyed, damaged, or converted.
You were well aware that the assertion was misleading or deceptive.
You wanted to defraud when you filed the lawsuit.
No one needs to incur a financial loss due to what you did, as it is with Penal Code 548 damaging or abandoning a car.
Multiple allegations under Penal Code 550 PC
Another way to break California's automobile insurance fraud laws is to:
Present two (2) or more claims to the same or different auto insurers for the same loss
You are aware that you are filing two (2) or more claims for the same loss
With the intention of defrauding
Penal Code 550(a) addresses the "multiple claims" form of auto insurance fraud
Penal Code 550 PC is a charge of causing an accident
If you do any of the following, you are in violation of California Penal Code 550(a)(3) PC:
Involved in or caused a car accident
Knowing that the accident is being staged to file a false or fraudulent insurance claim
To defraud others
If all of the following are true, you are deemed to have committed auto insurance fraud by "causing" an accident:
The accident was a direct, normal, and likely result of your actions;
Without your intervention, the accident would not have occurred.
False statements are punishable under Penal Code 550 PC.
The court can also consider any of the following a violation of California Penal Code 550, subsections (b)(1)-(4):
Presenting any written or oral argument in support of or in opposition to a claim for an auto insurance premium or other gains when recognizing that the statement contains inaccurate or misleading details about any material fact;
Knowingly preparing or making some written or oral statement as part of or in opposition to a claim for an auto insurance premium or other rewards that contains inaccurate or misleading details concerning any material fact;
Preparing or making some oral or written assertion to an auto insurer to receive car insurance that you live in California while you actually live elsewhere.
Consider one of our prescreened California Lawyers in your California Attorney Search.
Employees or company owners defrauding auto insurance
Owners, officials, and employees of auto-related companies may break California's auto insurance laws in various ways, exposing themselves to criminal liability.
There are some of them:
Any business that solicits, accepts or refers business to or from any person or entity with knowledge of, or reckless disregard for, that person's or entity's intent to commit auto insurance fraud.
An auto repair shop that pays an insurance agent, broker, or adjuster a commission, fee, profit-sharing, or other forms of compensation in return for referring policyholders to shop for auto insurance-covered repairs.
California's anti-fraud regulations apply to healthcare insurance fraud.
Life insurance billing fraud, health insurance fraud, HMO fraud, Medicare fraud, and Medi-Cal fraud are all terms used to describe health care fraud. Both criminal and law enforcement activity in these areas is booming these days.
It's easy to understand why. In today's America, anyone other than the patient pays for a lot of health care, whether it's a private medical insurance provider or a government medical insurance policy like Medicare or Medi-Cal.
To make matters worse, payment processing systems are often complex. This opens the door to a plethora of fraud possibilities. However, the perplexing bureaucracy of medical bills provides plenty of ways for officials to falsely accuse individuals of healthcare fraud. Seek advice from your Criminal Law Attorney to help you with your case.
Frequently, for conduct that is simply the product of honest blunders.
Government services like Medi-Cal (California's government-provided health insurance program for low-income, elderly, and disabled people) are involved in many healthcare fraud cases. As a result, it may be considered a "taxpayer ripoff." As a result, prosecutors can gain political points by going after people they accuse of healthcare fraud, even though they haven't done anything wrong.
Here are some examples of conduct that may result in healthcare fraud charges in California:
Billing for medical care or treatments that were never given to the patient.
Upcoding means billing for more costly treatments than the ones the patient got.
Submitting a so-called duplicate claim for the same procedure—paying the medical insurance company for a previously provided treatment to a patient but then submitting a second claim for the same service even though the patient only received it once.
Healthcare fraud charges are typically brought against medical personnel (such as physicians, nurse practitioners, or therapists) or other individuals who work in medical offices or hospitals, as the examples above show (like medical secretaries or records clerks).
Sanctions
In California, Penal Code 550(a) PC forbids most forms of healthcare and medical billing fraud.
If the overall value of the supposedly false statements is less than nine hundred fifty dollars ($950), the violation is a misdemeanor.
However, if the claims in question equal more than $950 ($950), the crime of healthcare fraud becomes a wobbler. It may be charged as a misdemeanor or a felony, depending on the circumstances.
If it is prosecuted as a crime, the following are the maximum penalties:
a fine equal to the amount defrauded or twice the amount defrauded
incarceration in a local jail for two (2), three (3), or five (5) years
Healthcare fraud comes in a variety of forms.
California's insurance fraud regulations cover healthcare fraud. Health care professionals (such as physicians and therapists) file requests for reimbursement of premiums to health insurance companies or government health insurance services.
Making claims that benefits have not been received
It is against the law to file a claim for some type of healthcare facility or treatment that was not actually used by the individual whose name is on the claim, according to Penal Code 550. In other words, healthcare fraud occurs when you make claims to a health insurance provider for services that were never released to you. A Criminal Law Attorney can help explain the details of the case.
False or fraudulent claim submission
If you make a "false or fraudulent" application for health care benefits in California, you may be charged with health care fraud.
This can include things like:
Performing a service that the patient didn't need and then paying the insurance company for it.
Upcoding, or billing insurance for a more costly treatment or service than the patient got, is common.
Patients with insurance are subjected to charges that are not imposed on patients who pay out of pocket.
Submitting multiple claims for the same medical service—basically, double billing the insurance provider—is another type of health care fraud under Penal Code 550.
Submitting undercharged invoices without submitting overcharged invoices
Sending a bill to a health provider for previously undercharged services without also sending a bill for previously overcharged services is expressly prohibited under Penal Code 550.
Creating a document in support of a fraudulent claim
Preparing any document that would be used to support a false health care claim is often called criminal health care fraud.
Medi-Cal insurance fraud rules in California
A crime committed in conjunction with California's Medi-Cal program is known as "Medi-Cal fraud."
Medi-Cal is a state-run program that offers free or reduced-cost health insurance to children and adults with low income and assets. Medi-Cal fraud is a combination of healthcare and welfare fraud.
Individuals will be charged with California Medi-Cal fraud if they do the following things:
Receiving Medi-Cal benefits for which you are ineligible due to false claims or making false declarations regarding another person's eligibility for Medi-Cal.
Make a false or fraudulent claim for payment of a Medi-Cal benefit with the intent to defraud.
Knowingly filing a claim for a Medi-Cal benefit that the applicant did not use.
In addition, healthcare providers (usually doctors) can be charged with Medi-Cal fraud if they engage in any of the following activities:
To defraud, submit some false or fraudulent claim to the Medi-Cal program to provide services or merchandise.
Knowingly providing false information to seek a higher payout from the Medi-Cal program than they are entitled to.
Providing false information knowingly to gain permission to offer health care services to Medi-Cal patients.
Executing or attempting to execute a scheme to defraud the Medi-Cal program or obtaining money or property from the Medi-Cal program by fraud or false statements.
Soliciting, accepting, selling, or providing some commercial bribe or kickback in exchange for referrals for Medi-Cal services or purchases.
Sanctions
The majority of Medi-Cal fraud cases are wobblers. This means that under California law, they can be charged as either misdemeanors or felonies. Most types of Medi-Cal fraud will result in a felony prison sentence ranging from sixteen (16) months to five (5) years.
In certain cases, Medi-Cal theft is a crime punishable by up to one year in county prison.
Offenses Related to Medi-Cal Fraud
Other California crimes that may be prosecuted in addition to or instead of Medi-Cal fraud include:
Abuse of the elderly
California's elder abuse rule, Penal Code 368 PC, makes it illegal to intentionally or negligently cause unjustified physical distress and/or mental anguish to anyone aged 65 or older.
If charged as a felony, this crime carries a possible state prison term of two (2), three (3), or four (4) years, as well as a fine.
Nursing homes or organizations that provide in-home services for the elderly, which serve many Medi-Cal recipients, are often involved in Medi-Cal fraud cases.
If a nursing home bills Medi-Cal for treatment provided by physicians or licensed nurses but provides care by unlicensed assistants instead, and an elderly patient is injured while under their care, the prosecution may create a case against the nursing home's owners or managers for both Medi-Cal fraud and elder abuse.
Forgery
PC 470 Penal Code Forgery in California is described as doing any of the following with the intent to defraud:
Using someone else's name as a signature
Using someone else's handwriting or a fake seal
Changing or falsifying a legal document is a serious offense.
Creating, changing, or showing a fake financial record as genuine
You may be charged with both Medi-Cal fraud and forgery if you forge a doctor's signature on a report about an accident and use the report to seek Medi-Cal reimbursement. Forgery is a wobbler that can result in the same sentence as grand theft.
Perjury
When you intentionally give false information while under oath, you commit Penal Code 118 PC perjury.
In several cases, you may be charged with perjury and Medi-Cal fraud, such as knowingly misrepresenting your income or assets on a Medi-Cal application.
Perjury is often a felony punishable by two (2), three (3), or four (4) years in prison.
Unemployment insurance fraud rules in California
In California, unemployment insurance fraud (EDD fraud) occurs when claimants provide misleading or inaccurate information to apply for or receive benefits to which they are not legally entitled. EDD fraud occurs when an employer provides false details for current or former employees to be denied benefits to which they are entitled.
Insurance fraud occurs when someone makes a "willful false representation, knowing concealment, or false identity to receive, raise, minimize, or defeat any profit under the state or federal programs," according to California Unemployment Insurance Code 2101.
The U.S. unemployment insurance policy has a long history
Unemployment insurance (also known as UI) is a federal-state insurance policy administered by the Employment Development Department in California (EDD). Employer tax contributions have supported the initiative since its inception in 1935.
While unemployment insurance is intended for people who have lost their jobs due to no fault of their own, some aspects of the law can allow anyone who left or was fired (rather than laid off) to obtain benefits. Eligibility in these situations is decided solely by the California EDD on a case-by-case basis, and questions about these situations should be directed to the California EDD.
The issue is that people often take advantage of insurance coverage, as is the case in many public insurance schemes. And in the case of unemployment insurance, this raises employer rates and causes a backlog in the system, resulting in longer wait times for those legally entitled to UI benefits.
Welfare fraud laws in California
The Welfare & Institutions Code 10980 in California addresses two forms of welfare fraud: beneficiary fraud and internal fraud. The most common type of fraud is recipient fraud, which occurs when people submit misleading or inaccurate information to receive benefits, such as food stamps or Medi-Cal, to which they are not legally entitled. Internal welfare abuse occurs when government employees assist in assigning or distributing benefits to unavailable individuals.
Most welfare fraud charges are wobblers, so prosecutors can file them as felonies or misdemeanors at their discretion. Probation, fines, restitution, and possible time in jail or state prison will all result from a conviction. However, if you can repay all or a large portion of the money, you may be granted leniency – and in certain cases, the charges may be dismissed entirely. Get a Criminal Law Attorney to help you get through the process of overcoming your charges.
California's welfare programs
Welfare benefits in California are available to qualifying participants in the following forms:
CalWORKs (California Work Opportunities and Responsibility to Kids, formerly known as Help to Families with Dependent Children, or ADFC) is the state's primary benefits program that offers short-term cash assistance to vulnerable families for lodging, clothes, food, utilities, and/or medical care.
CalFresh (California Fresh) (more commonly referred to as the food stamp program, CalFresh issues monthly electronic benefits that can be used to buy food).
in-home programs that fix concerns like:
abuse in the home (counseling, medical and public health information, parenting skills training, financial planning, and relocation services)
Abuse of substances (evaluation and treatment)
mental well-being (assessment, case management, treatment, and rehabilitation for those suffering from depression, anxiety, etc.)
"GAIN" stands for "Greater Avenues for Independence" (provides mandatory support to CalWORKs participants to help them find employment, remain employed, and advance to higher-paying jobs)
"GA/GR" stands for "General Assistance" or "General Relief" (provides support to poverty-stricken adults who are not supported by other public assistance programs). Even though Medi-Cal is a form of welfare gain, Medi-Cal fraud is prosecuted under different laws, as discussed in our article on California Medi-Cal Fraud.)
In the case of CalWORKs and CalFresh, the majority of benefits are now delivered electronically. These forms of cash assistance are deposited into an account connected to an Electronic Benefits Transfer (EBT) card, which the recipient uses in the same way as a debit card. Food stamps and paper checks are becoming obsolete.
Welfare abuse by recipients
As described by 10980 WIC, reciprocal welfare fraud occurs when people obtain or seek to receive welfare benefits to which they are not legally entitled.
While there are many ways to defraud welfare recipients, some are more common than others. The most common types of welfare fraud in California occur when someone attempts to receive illegal benefits by:
claiming to be a single parent while the child's other parent stays with them (also known as "absent parent living in the home")
omitting to disclose extra earnings or benefits
submitting a petition on behalf of a child who does not live with his or her parents
submitting a petition for children who are fictitious or unavailable
obtaining benefits from a different state in addition to the benefits received in California
Internal fraud in the welfare system
Internal welfare fraud occurs when a government employee who distributes welfare benefits tries (or actually does) to receive or administer illegal benefits from that agency.
This "inside job" usually happens when an eligibility worker falsifies applications for otherwise unavailable friends or family members and divides the proceeds. Workers can make up children, make false income statements, or fail to disclose information that would disqualify these friends or family members from receiving legitimate benefits.
Persons accused of internal welfare fraud face fraud charges and a slew of other charges. They are also accused of embezzlement.
When you unlawfully take money or other property that has been entrusted to you, you are breaking Penal Code 503 PC, California's embezzlement statute, also known as employee theft.
Welfare and Institutions Code 10980, California's welfare fraud statute, has many separate offenses.
If you are accused of making a false or misleading statement to receive benefits, you will be charged with a misdemeanor, resulting in up to six months in prison and a fine.
Submitting forged applications
If you are accused of filing a fraudulent application, you will face a wobbler because:
You've submitted several applications for the same person.
You applied for assistance on behalf of a fictitious individual.
You applied for benefits under a false name.
The following penalties apply to the felony:
16 months in county prison to two or three years
fines
The following penalties apply to the misdemeanor:
a maximum sentence of one year in prison
fines
Getting or keeping benefits
It is a crime to obtain or maintain fraudulent benefits if:
You were able to receive or keep fraudulent benefits.
The total amount of benefits received was less than $950.
It is punishable as a crime by:
a maximum of six months in prison
a fine
If the help was for more than $950, you would be charged with a crime.
The following penalties apply to the felony:
16 months in county prison to two or three years
fines
Food stamps
You will be charged with a crime if you are found guilty of participating in any operation with illegal blank authorizations to engage in the food stamp program.
It is punishable by the following:
16 months in county prison to two or three years
fines
However, using, transferring, selling, purchasing, or possessing food stamps, electronically transmitted benefits, or food stamp authorizations in an unauthorized manner is a wobbler offense.
It is a misdemeanor if the value of the food stamp benefits or authorizations is less than $950. It is punishable by the following:
a maximum of six months in prison
a maximum fine of $500
It is, however, a felony if the amount reaches $950. It may be sanctioned by:
16 months in county prison to two or three years
a fine
Benefits that are transferred electronically
If you do any of the following, you will face additional penalties:
You've been found guilty of welfare fraud.
Electronically transmitted benefits were the target of the fraud (or attempted fraud).
Additional repercussions
A conviction for welfare fraud carries the following penalties in addition to the ones mentioned above:
If you have a state license, you can face professional discipline (since criminal convictions can affect professional licenses), especially if the crime is categorized as a crime of moral turpitude (as is often the case with fraud offenses).
If you are a legal immigrant, you can face deportation or expulsion.
disqualification from earning any potential benefits from the government
Workers' compensation in California
Workers' compensation fraud in California entails giving false or misleading information to receive benefits to which you are not legally entitled. The offense may be charged as a misdemeanor or a felony, with sentences ranging from probation to five years in prison.
Workers' compensation is a type of insurance that covers medical expenses and missed wages for employees who are injured on the job. Fraud involving workers' compensation insurance will result in serious criminal penalties.
In California, the following acts are considered workers' compensation fraud:
Making or delivering a materially misleading or dishonest statement with the intent of gaining or refusing workers' compensation benefits.
Making a misleading or dishonest assertion about insurance eligibility to deter an injured worker from filing a lawsuit.
Aiding and abetting workers' compensation fraud or engaging in a scheme to commit workers' compensation fraud.
Different applications for reimbursement of a health care benefit provided by workers' compensation insurance, all for the same accident, must be prepared or submitted.
Making a petition for a workers' compensation-covered health insurance plan that was never used.
Soliciting, referring, or receiving any business from an individual who intends to defraud the workers' compensation system.
Sanctions
California wobblers are the most common type of workers' compensation fraud. This means that under California law, they can be charged as either misdemeanors or felonies.
Most types of workers' compensation fraud will result in a criminal prison term of two (2), three (3), or five (5) years. You can be charged fines for felony theft or twice the amount defrauded (whichever is greater).
In most cases, workers' compensation theft is a crime punishable by up to one (1) year in county jail.
In California, there has been a lot of talk about workers' compensation abuse and professional discipline.
Doctors, nurses, and pharmacists in California who are convicted of workers' compensation fraud are understandably worried about professional repercussions.
Any criminal conviction for an offense that is "substantially related" to a physician's credentials, functions, or duties will result in professional discipline for California doctors. Many types of workers' compensation fraud may be classified as this (for example, paying for services that were never provided).
As a result of a workers' compensation fraud conviction, nurses can face nurse supervision and (in some cases) license revocation. Another group of practitioners who must consider the impact of a workers' compensation fraud charge on their professional license is pharmacists. Your Criminal Law Attorney will know how to handle your case.
Fraudulent workers' compensation insurance will result in civil penalties.
Certain types of workers' compensation fraud are also punishable by hefty civil penalties under California law.
Parties who commit any of the following offenses are subject to these penalties:
Willfully misrepresent any evidence to receive workers' compensation benefits at a lower rate than is required (employers commit this type of workers' compensation fraud).
Present or cause to be made any intentionally false or fraudulent argument in support of, or in opposition to, any workers' compensation claim to obtain or deny such benefits.
Solicit, receive, bid, pay, or accept any illegal reimbursement, refund, fee, or other rewards for soliciting or referring clients for workers' compensation insurance-covered services.
Operating or participating in a program for profit that refers patients to medical or medical-legal facilities protected by workers' compensation.
Assist or conspire with someone else to commit any of the above crimes.
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