INSURANCE FRAUD

Insurance Fraud is a felony.
Easy money? Hard time in state prison – up to 5 years!
Insurance fraud is intentional lying or concealing information in order to obtain payment or some benefit from an insurance company that would not otherwise be paid. Insurance fraud is a serious offense in most states, including California. It is usually charged as a felony. Insurance fraud carries strict penalties, including jail time upon conviction. Most insurance scams involve staged car accidents, false medical claims (e.g. Medicare fraud, billing fraud, workers compensation fraud) or property that is reported as stolen or damaged when it was not.

If you have been contacted by an insurance fraud investigator, police officer or detective regarding any kind of potential insurance fraud, immediately contact an experienced criminal defense attorney. Do not speak to the investigator or law enforcement until you have spoken to an attorney. Remember, the stakes are high in insurance fraud. Anything you say in an interview can and will be used against you in a criminal case. Call the attorneys at Stephen G. Rodriguez & Associates to schedule a confidential consultation to discuss your legal options. (213) 223-2173.

California Insurance Fraud Law
California Insurance Fraud Law is primarily contained in California Penal Code Sections 548 to 550.

• Penal Code 548 (Destruction of Insured Property) makes it a felony punishable by imprisonment for 2, 3 or 5 years and a fine of up to $50,000 when someone with the intent to defraud the insurer, willfully injures, destroys, hides, abandons, or disposes of property that was insured against loss or damage from theft, embezzlement, or any casualty other than fire. There is an additional 2 year prison enhancement for each prior insurance fraud conviction.
  
• Penal Code 549 (False Claim Pending) makes it a crime for a firm, partnership, association, or an individual acting in an individual capacity, or as a public or private employee to solicit, accept, or refer business to or from an individual or entity knowing that the provider or recipient of that business intends to violate Penal Code 550 (file or present a fraudulent insurance claim). Punishment, on a first conviction, is by imprisonment in the county jail for not more than one year or in the state prison for 16 months, 2 or 3 years. Punishment for subsequent convictions is punishable in state prison for up to three years.
  
• Penal Code 550 (False or Fraudulent Claims) makes it a felony to do, or to aid, abet, or conspire to do any of the following:
  1. Knowingly present a false or fraudulent claim for the payment of a loss or injury
     
  2. Knowingly present multiple claims for the same loss or injury, including presentation of multiple claims to more than one insurer, with the intent to defraud
     
  3. Knowingly cause or participate in a vehicular collision, or any other vehicular accident, for the purpose of presenting any false or fraudulent claim
     
  4. Knowingly present a false or fraudulent claim for the payment of a loss for theft, destruction, damage, or conversion of a motor vehicle, a motor vehicle part, or contents of a motor vehicle
     
  5. Knowingly prepare, make, or subscribe any writing, with the intent to present or use it, or to allow it to be presented, in support of any false or fraudulent claim
     
  6. Knowingly make or cause to be made any false or fraudulent claim for payment of a health care benefit (including workers compensation)
     
  7. Knowingly submit a claim for a health care benefit that was not used by, or on behalf of, the person named in the claim (including workers compensation)
     
  8. Knowingly present multiple claims for payment of the same health care benefit with the intent to defraud (including workers compensation)
     
  9. Knowingly present for payment any undercharges for health care benefits on behalf of a specific claimant unless any known overcharges for health care benefits for that claimant are presented for reconciliation at that same time (including workers compensation).

Car Insurance Fraud
The Los Angeles County District Attorney’s office has identified various car insurance scams. These range from individuals claiming that pre-existing damages resulted from a current accident to organized rings of doctors, insurance representatives, attorneys and “cappers” (recruiters). In California, staged accident insurance fraud is so prevalent that it has its own slang:

• Capper - A "capper" recruits people to ride as passengers in a staged accident. Cappers are usually paid a percentage of the insurance payments to the recruited passengers and a kickback from attorneys and/or doctors involved in the scam.
  
• Stuffed Passengers – A “stuffed passenger” is a person who is recruited by a capper to make a false claim regarding a staged car accident.
  
• Nail Car – The “nail car” is the term for the vehicle hit by the “hammer car” in a staged accident.
  
• Hammer Car – The “hammer car” hits the “nail car”.
  
• Kickback – A “kickback” is the fee paid to the "capper" by an attorney or medical provider for referring staged accident “victims”.
  
• Swoop and Squat Scam – The "swoop" car swerves in front of the "squat" car, which causes the "squat" car to slam on its brakes and results in the victim rear-ending the “squat” car.
  
• Sudden Stop Scam – The "squat" car slows down in front of the victim’s car and then suddenly slams on the brakes and causes a rear-end collision.
  
• Backing Scam – The suspect puts his car in the path of a victim who is backing out of a driveway or parking spot.
  
• Right of Way Scam – The suspect appears to give the victim driver the
  right-of-way and then crashes into the victim. The suspect later claims no right-of-way was ever indicated.
  
• Phantom Vehicle Scam – The suspect crashes due to a car that is never identified.
  
• Paper Collision Scam – The suspects create an illusion of a legitimate accident by presenting pre-damaged vehicles or vehicles that have been damaged to appear like they have been in an accident.

Property, Casualty and Life Insurance Fraud
Property, casualty and life insurance fraud includes staged burglaries, murder for life insurance proceeds, fraudulent fire, flood and earthquake claims, fake slip and falls and false food contamination claims. Many of these cases are jointly investigated by local and federal law enforcement agencies and are prosecuted at the local, state or federal level.

Workers' Compensation Fraud
During 2007, 1,063 workers comp fraud cases were prosecuted in California, which resulted in 527 convictions.  Restitution in the amount of $23,611,264 was ordered in connection with these fraud convictions. Workers’ compensation fraud is perpetrated by various individuals: employees who file false claims, employers who misclassify employees or underreport wages to get lower rates, workers comp lawyers who inflate billing or misrepresent facts to insurers and workers comp doctors and/or pharmacists who over bill or use incorrect codes. In addition to incarceration, fines and restitution, workers compensation fraud conviction results in the defendants name, case number, city and county of the defendant's address, the date of conviction a description of the offense, the amount of money alleged to have been defrauded and a description of the punishment imposed being posted on the California Department of Insurance website for five years.

Disability and Medical Insurance Fraud
Each year, hundreds of people in California are investigated for suspected disability and medical insurance fraud associated with claims for medical treatment reimbursement that is unrelated to automobile accidents or workers compensation. This broad area of insurance fraud includes activities such as:

• Using someone else’s insurance card to obtain medical treatment
• Collecting disability insurance with no disability
• Recruiting patients to undergo unnecessary medical treatments or surgery, and
• Billing for medical services that were not rendered.

What the Prosecutor has to Prove
In California, the Fraud Division of the California Department of Insurance is the primary law enforcement agency that investigates suspected insurance fraud. Cases investigated by the Fraud Division most often involve criminal acts involving automobile insurance, workers' compensation, health insurance and residential and commercial property claims. Department of Insurance fraud investigators work with District Attorneys throughout California, who are ultimately responsible for prosecuting insurance fraud suspects. In some counties, there are entire offices devoted to a particular type of insurance fraud. In Los Angeles County, for example, car insurance fraud cases are handled through the Los Angeles Automobile Insurance Fraud Task Force Regional Office.

According to California Insurance Fraud Law, a prosecutor in an insurance fraud case must prove that the suspect:

• Had the intent to commit fraud – knowingly committed the fraudulent act
• Completed the fraudulent act – as little as making a misrepresentation to an insurer is enough
• Completed the act with the intent to defraud – if the act and intent do not come together, it is not a crime.

For the crime of insurance fraud to be complete it is not necessary that the prosecutor prove anyone actually was defrauded or suffered a financial, legal, or property loss as a result of the defendant’s acts. Prosecutors have discretion on whether to file insurance fraud as either a misdemeanor (1 year or less in the county jail and/or fines and restitution) or felony (2, 3 or 5 years in state prison with the possibility of additional fines and restitution). In most cases, a prior insurance fraud conviction results in even more serious punishment.

Los Angeles Insurance Fraud Defense Attorneys
Los Angeles criminal defense attorney Stephen G. Rodriguez & Associates have significant experience protecting the rights of those charged with insurance fraud. We know that the successful defense of insurance fraud charges requires early intervention and investigation by experienced criminal defense attorneys. Do not take a "wait and see" attitude. If you are contacted by law enforcement or an insurance fraud investigator, do not speak to them until your have spoken to an attorney. Most likely, the Fraud Division of the California Department of Insurance has been investigating the case for months or years. Many people think that they can talk their way out of an insurance fraud charge. Don’t count on it. The investigator is hoping you will implicate yourself in the alleged insurance fraud with your own words during an informal interview. DO NOT agree to meet with an investigator or law enforcement officer without your criminal defense attorney present.

Our number one priority is to protect our clients’ rights and keep them out of prison. As your criminal lawyers we will aggressively counter allegations of insurance fraud and attempt to show there was no criminal intent when the insurance claim was made, only an honest error or oversight in billing or a justifiable difference in opinion on how services should have been reimbursed.

From our offices in downtown Los Angeles, the attorneys of Stephen G. Rodriguez & Associates have successfully represented many individuals facing insurance fraud charges. We understand there is a lot at stake.

Call us for a free one-on-one confidential consultation.

Law Offices of Stephen G. Rodriguez
633 West 5th Street
26th Floor
Los Angeles, California 90071

Telephone
(213) 223-2173