What Is a Fraudulent Insurance Claim?
Fraud allegations against you or your business can seriously harm your reputation. In addition to civil penalties, insurance fraud can also result in criminal prosecution. There are several types of activities that fall under the heading of insurance fraud. These offenses are vigorously investigated and prosecuted in California. If convicted, you face stiff fines and serious jail time.
State and federal prosecutors advance their careers by getting high conviction rates. They hate to lose, and they’ll come after you with everything they’ve got to win a case.
Types of Insurance Fraud
Insurance fraud occurs when someone knowingly lies to obtain a benefit or advantage from some type of insurance agency. It’s the second most costly crime after tax evasion, and law enforcement officials take it very seriously. Types of claims that may be subject to prosecution for insurance fraud include:
- Auto insurance
- Disability insurance
- Property insurance
- Medical Insurance
- Life insurance
- Fire insurance
- Natural disaster insurance
Examples of Insurance Fraud
False statements made in an insurance claim can lead to insurance fraud charges under state and federal laws include. Examples of insurance fraud include:
- Falsely reporting vehicles stolen or vandalized
- Faking a car accident
- Arson to collect on a fire insurance policy
- Murder to collect on a life insurance policy
- Staged burglaries
- False natural disaster claims (wildfire, flood, earthquake, wind)
- False slip and fall claims
- False food contamination claims
- Billing for services never rendered
- Billing for more expensive services than you provided
- Providing a patient with unnecessary medical treatment
- Claiming property was damaged when it wasn’t
- Overstating damages in an insurance claim
- Falsifying a personal injury in an insurance claim
Automobile Insurance Fraud
Many types of insurance fraud involve motor vehicles. In addition to falsely reporting a vehicle stolen or damaged, repair claims can also be faked or exaggerated. For example, people may list charges for repairs that were not made. And mechanics frequently bill customers for parts that are much more expensive than the parts they actually use.
One common insurance scam is intentionally causing an accident to collect on an auto insurance policy. Tactics in these cases include suddenly stopping or changing lanes in front of another vehicle to force the other driver to rear-end your vehicle. A “stuffed passenger” scam occurs when a driver claims injuries for someone who wasn’t actually inside the vehicle when the accident occurred.
State and Federal Enforcement and Penalties
State and federal law enforcement agencies devote considerable resources to combatting insurance fraud. The Fraud Division at the law enforcement unit within the California Department of Insurance investigates insurance fraud by interviewing witnesses and suspects and conducting surveillance and undercover operations.
Categories of fraud investigated by Fraud Division include:
- Auto theft
- Disaster fraud
- Underground economy
- Pharmaceutical fraud
- Computer forensics
State penalties for insurance fraud in California include up to 5 years in prison and fines up to $50,000.
At the federal level, the FBI investigates several types of insurance fraud, including:
- Healthcare fraud
- Fraud schemes carried out by wire or mail
- Diversion of insurance company funds
- Workers’ compensation fraud
- Disaster relief fraud
A federal conviction for insurance fraud may result in 15 or more years in prison in addition to heavy fines and penalties.
Are You Being Investigated for Insurance Fraud?
The experienced trial attorneys at Werksman Jackson & Quinn LLP have earned a national reputation for excellence. We aren’t intimidated by anybody, and we’ll find the best strategy to get your charges reduced or dismissed.
Call (213) 688-0460 to learn more today.