What is Insurance Fraud:
Insurance fraud can include workers’ compensation fraud, auto insurance fraud, unemployment insurance fraud, and welfare fraud. There are many statutes which apply to the specific type of fraud that is charged. Workers’ compensation and auto insurance fraud can be charged under California Penal Code Section 550(a) (1). Penal Code Section 550(a)(1) includes many permutations of insurance fraud including knowingly presenting a false claim for the payment of a loss of injury, participating in a vehicular collision for the purpose of presenting a false claim, preparing a false writing to support a false or fraudulent claim, and knowingly making a false claim for the payment of a health care benefit. Penal Code Section 550(b)(1) makes illegal presenting a false oral or written statement to an insurance company in an effort to obtain insurance benefits.
Workers’ compensation fraud is also contained in Insurance Code Section 1871.4. Unemployment Insurance fraud can be charged under Section 2101 of Unemployment Insurance Code. A related crime to all of the above charges is a violation of Penal Code Section 487, grand theft. Therefore, the same crime could be charged under more than one of these sections.
Examples of Insurance Fraud:
Workers’ Compensation Fraud:
- Failing to report earnings to your worker’s compensation insurer while you are receiving benefits
- Collecting benefits when you have been returned to health and are able to work
- Making a false statement on your worker’s compensation report indicating that you cannot certain tasks that you are in fact able to do – such as lifting, sitting for a prolonged period or reaching above your head.
- Engaging in strenuous leisure activities when you have reported that you are unable to work
Automobile Insurance Fraud:
- Reporting that your car has been stolen when in fact you had given it away to someone
- Reporting to an insurance company that you were injured in an accident when in fact it was not true
- Reporting your vehicle as being stolen and then selling it to a chop shop
Unemployment Insurance Fraud:
- Collecting benefits and failing to report that you are working and earning income
- Receiving both disability benefits and unemployment benefits at the same time without reporting the other
- Reporting that you were laid off from a job when in fact you were fired for good cause
What the District Attorney Must Prove:
- The Defendant did one of the following acts:
a. Caused to be presented a false or fraudulent claim for payment for a loss or injury;
b. Falsely or fraudulently claimed payment for a loss due to theft, destruction, or damage to a motor vehicle;
c. Prepared or signed a document with the intent that it be used to support a false or fraudulent claim;
d. Made a fraudulent claim for payment of a health-care benefit;
- The Defendant knew that the claim was false or fraudulent
- When the Defendant did the act he/she intended to defraud.
Intent to Defraud is defined as intending to deceive another person.
Actual Case No. 1:
Susan was injured at her job as a warehouse worker. Susan went out on disability and began receiving workers’ compensation benefits. After all conservative treatment failed, Susan had surgery to repair her damaged shoulder. Susan received medical benefits that paid for her surgery as well as bi-weekly disability pay. After six months of recuperation Susan began engaging in physical leisure activities in a limited manner. Susan asked her surgeon in a follow-up visit if she could pursue her passion, which was fishing. Susan’s orthopedic doctor gave her the okay as long as she agreed to stop if her shoulder started to hurt her. Susan’s employer suspected that she her injury was healed and that Susan should have returned to work. As a result, Susan’s employer had her investigated by a private investigator who took secret video of Susan fishing. Also, the investigator searched Susan’s Facebook and found posts regarding fishing trips and pictures of Susan fishing. Susan went to a medical examination for workers’ compensation and was asked about her leisure activities. Susan reported that she did fish but on a very limited basis. The insurance company forwarded the case to the district attorney and Susan was charged with worker’s compensation fraud.
Working with my expert workers’ compensation investigator I was able to obtain interview reports from many of Susan’s friends and family that attested to the fact that Susan was very limited in her activities and when she fished, she could only do so for a few minutes at a time. My witnesses also testified that Susan needed assistance in performing many of the everyday activities of living such as brushing her hair and regular household chores. Also, I obtained a statement from my client’s significant other who stated that he had attended the doctor’s visit with Susan and that Susan’s doctor had confirmed that Susan could engage in the fishing on a limited basis. After presenting the evidence to the District Attorney I was able to obtain a dismissal of the charges. Susan is now back at her job and doing well.
Actual Case No. 2:
Tom was charged with automobile insurance fraud in falsely reporting his Mustang to be stolen when in fact he had disposed of the vehicle. After having Tom make substantial restitution payments to the automobile insurer I was able to persuade the district attorney to reduce all the five charges to one misdemeanor. As a result of the reduction in charges, Tom was able to keep his job.
Actual Case No. 3:
Tomika was a twenty-four year old single mother who had never been in trouble with the law before. Tomika was going to school and received government assisted child-care funds for her four year old boy. Tomika left school but continued to have her son attend the day-care which was paid for by the government funds. Tomika was charged with welfare fraud for falsely reporting that she was in school. The district attorney was first seeking $6,000 in restitution from Tomika. Since the filing of the charges, Tomika had obtained a good job and was making a living wage. I was able to persuade the district attorney to reduce the amount of the restitution to $1,500. Tomika borrowed the money and made one full payment of the debt. In return, the district attorney dismissed all charges against Tomika.
Penalties for Insurance Fraud:
Insurance fraud is a wobbler and can be charged as either a felony or a misdemeanor. If charged as a felony penalties can include five years of formal probation, up to five years in prison, and full restitution to the insurance company, government, or employer. If charged as a misdemeanor the penalties can include up to three years on probation, up to one year in the county jail, and full restitution.
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