Understanding Insurance Fraud
Insurance fraud is a serious crime that poses a significant problem across the United States. According to the FBI, the total cost of insurance fraud (excluding health insurance) exceeds $40 billion annually. This staggering figure translates to an additional $400 to $700 in annual premiums for the average American family. Given these costs, prosecutors aggressively investigate and prosecute those suspected of insurance fraud.
What Is Insurance Fraud?
Insurance fraud occurs when an individual knowingly provides false information to an insurance company to obtain a benefit or payment they are not legally entitled to. This crime can be committed by policy applicants, policyholders, third-party claimants, and even professionals providing services to claimants.
When an insurance claims adjuster suspects fraud, the claim is referred to the Fraud Department for further investigation and may subsequently be assigned to a detective and the local prosecutor’s office. The prosecution of insurance fraud does not require actual financial loss by the insurance company—the intent to defraud is sufficient for charges. Depending on the circumstances, charges can range from misdemeanors to felonies, with penalties including heavy fines, restitution, and incarceration in county jail or state prison.
Common Types of Insurance Fraud
Here are some of the most frequently encountered examples of insurance fraud:
- Receiving medical treatment for non-existent injuries and billing the insurance company.
- Intentionally lying on an insurance claim.
- Staging auto accidents or injuries to collect insurance payouts.
- Reporting a vehicle stolen and filing a false insurance claim.
- Filing fake property damage claims.
- Committing arson for profit by setting property on fire to claim insurance proceeds.
- Collecting unemployment benefits while employed.
- Faking one’s death to claim life insurance proceeds.
- Filing false workers’ compensation claims.
- Overbilling for medical treatments or services by healthcare providers.
- Inflating the value of stolen or damaged items.
- Filing claims under someone else’s insurance using stolen information.
- Submitting false police reports to support fraudulent claims.
- Purchasing insurance after an incident and falsely claiming the incident occurred post-coverage.
Penalties for Insurance Fraud in California
The penalties for insurance fraud depend on factors such as the type of fraud, the monetary value involved, and the defendant’s criminal history. Misdemeanor charges can result in up to one year in county jail, while felony charges are punishable by two to five years in prison. Additional consequences include substantial fines and restitution.
Insurance fraud convictions carry collateral consequences, including threats to professional licenses and reputations. Healthcare providers, auto mechanics, and other professionals may lose their licenses, jeopardizing their livelihoods.
How the Attorneys at Stephen G. Rodriguez & Partners Can Help
The criminal defense attorneys at Stephen G. Rodriguez & Partners are highly experienced in handling insurance fraud cases. With over 50 years of combined experience, we provide hands-on representation throughout the criminal process, from pre-file investigations to trial.
If you are under investigation or have been charged with insurance fraud, it is crucial to act quickly. Avoid making statements to investigators or detectives without legal representation, as these statements are often recorded and can be used against you. Our attorneys work diligently to have charges reduced or dismissed and to protect your career, reputation, and future.
Contact Stephen G. Rodriguez & Partners today for a free, confidential consultation. Call us at (213) 481-6811 to discuss your case and explore your legal options.