What to Do if You’re Under Investigation for Insurance Fraud in California?

Insurance fraud occurs when an individual knowingly and willingly commits an act that defrauds an insurance company. A common example is when an individual is dishonest with an insurance company to gain something to which they are not entitled. You need to know what to do if you’re under investigation for insurance fraud in California.

What Are the Potential Penalties and Consequences for Insurance Fraud

Insurance fraud is a crime in California and can be charged as a misdemeanor or a felony. A conviction may mean criminal or civil penalties, restitution, loss of professional licenses, and fines. Laws regarding insurance fraud are included in Sections 448-550 of the California Penal Code and the state’s insurance code. The Department of Insurance, Fraud Division is responsible for investigating claims of insurance fraud and subsequent prosecution.

A misdemeanor conviction can result in up to one year in county jail. A felony could mean more severe penalties, such as incarceration in state prison for two to five years. A fine may also be imposed, not to exceed the greater of $50,000 or twice the amount of the fraud.

Other outcomes include a period of probation and mandatory community service. Typically, the severity of the punishment is directly correlated to the amount of money involved and any past criminal history of the individual charged.

Types of Insurance Fraud in California

Annually, insurance fraud costs the United States $308.6 billion. In Alameda County, accusations of real estate fraud are investigated by the District Attorney’s Real Estate Fraud Unit located at 7677 Oakport Street, Suite 650, Oakland, CA 94621. There are various types of insurance fraud in California:

• Auto insurance fraud occurs when an individual presents false information regarding theft or damage to a vehicle, makes false claims about an accident, or stages a vehicle accident.
• Disability insurance fraud involves lying about or exaggerating the impact of a disability to access benefits.
• Healthcare insurance fraud occurs when an individual submits false claims for services that were never provided or exaggerates the presence and severity of medical conditions. It also covers forging prescriptions or receiving kickbacks.
• Life insurance fraud centers around filing a falsified death claim, providing false information, forging death certificates, or committing murder to collect life insurance benefits.
• Property insurance fraud covers filing claims under a homeowners or renters insurance policy for property damage or loss that did not occur, such as storm damage. It may also include committing arson or staging a theft.
• Unemployment insurance fraud is attempting to receive or increase benefits unlawfully.
• Workers’ compensation fraud involves lying about injuries that happened on the job, claiming benefits while employed, or falsifying records to claim benefits.

Steps to Take When Facing an Insurance Fraud Investigation

Begin by gathering evidence and documentation. This should include any correspondence with the insurer, such as emails, claim submissions, and letters. You should also collect documents related to your claim that may include photos, receipts, or police reports. Create a list of witnesses who can support your claim and note their contact information.

Work with your insurance fraud defense lawyer to draft a reply to the charges. The reply should be concise and direct, and respond to the specific accusations made against you. Always consult with your attorney if additional information or an interview is requested by the insurance company.

What Is the Fraud Statute of Limitations in California?

A statute of limitations defines the timeline in which a lawsuit must be filed. In California, the statute of limitations for fraud is typically three years from when the fraud was discovered. The discovery of fraud is a key element in establishing the statute of limitations because fraud is often not easily detected.

There are circumstances where the statute of limitations may be tolled – or paused. In these cases, the time frame will be extended for filing a lawsuit. This most commonly occurs if the defendant is out of state or if the plaintiff is a minor.

FAQs

Q: What Evidence Is Needed to Prove Insurance Fraud?

A: In order to prove insurance fraud, an individual must have knowingly committed an act against an insurance company with the intent to deceive. According to California law, the act and the intent must be fraudulent – this helps to differentiate deliberate fraudulent acts from genuine mistakes. Examples of circumstantial evidence used to demonstrate intent in a fraud case may include emails, witness testimony, and financial records.

Q: How Long Do You Go to Jail for Insurance Fraud in California?

A: If you are found guilty of insurance fraud in California, a felony conviction may lead to a period of incarceration of two to five years. A misdemeanor charge can mean up to one year in county jail. Not all cases end in a jail sentence. Other outcomes may include paying restitution, paying fines, serving a period of probation, or performing community service.

Q: How Do You Win an Insurance Fraud Case?

A: There are defenses an individual may use to win an insurance fraud case. To challenge an accusation of insurance fraud, one may argue a lack of intent. If intent cannot be proven beyond a reasonable doubt, the defendant may prevail. If the act was committed under duress, the prosecution may not be successful. Duress would include actions by a third party that was coercive or threatened harm.

Q: What Triggers an Insurance Investigation?

A: There are common situations that may trigger an insurance investigation. Typically, an insurance investigation may be initiated if a claim involves a large dollar amount, there are discrepancies or inconsistencies, multiple claims have been filed in a short period of time, a claim is filed shortly after opening a new policy, fraud is suspected, or theft or liability claims are filed. Insurance companies conduct investigations in order to prevent fraud.

Contact an Alameda County Insurance Fraud Attorney

Fraud is a serious offense that can have a harmful impact on your life if not addressed promptly and effectively. If you are facing charges of insurance fraud, it is essential to seek legal counsel. The Law Office of Louis J. Goodman has over 30 years of experience providing a solid defense to individuals facing criminal charges. Contact the office to schedule a consultation to discuss your case.