Insurance Fraud

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Many do not think of insurance fraud as a criminal issue. Insurance companies may make money damages claims in civil court for insurance fraud. Yet every state also criminalizes insurance fraud. State prosecutors may charge an individual for insurance fraud, whether or not the insurance company also pursues a civil money damages claim. And federal prosecutors can also charge insurance fraud as a federal mail, wire, or false statement crime. Don’t ignore or minimize insurance fraud criminal charges. Retain the Lento Law Group’s premier criminal defense attorneys.

The Elements of Insurance Fraud Crime

Insurance fraud is a specific intent crime. Prosecutors must prove that you intentionally made false statements to the insurance company to induce the insurance company to pay you an insurance benefit that the company did not owe. Accidental misstatements are not insurance fraud. The prosecution must generally prove that you knew your statements to be false and that you made those statements with the intent to deceive.

Misstatements that are not material to your insurance coverage or claim are not generally insurance fraud crimes. You must generally direct your false statements to influence the coverage decision of underwriters or the reimbursement decisions of claim representatives. Insurance fraud is at heart a deceit crime. You need not have an elaborate scheme to face insurance fraud charges. But your actions must have the purpose of tricking or deceiving the insurance company.

Types of Insurance Fraud Crime

Insurance companies offer many types of insurance. A consumer may buy life insurance, disability insurance, homeowner’s insurance, motor-vehicle insurance, and health insurance. You may also have worker’s compensation coverage and other insurance coverage through your employer. Business owners also buy insurance coverage for business interruption, property damage, theft loss, and other losses. Insurance fraud crime may involve any of these types of insurance. Examples include:

misrepresenting your prior health conditions or lifestyle habits, such as smoking, alcohol use, or use of drugs, when applying for life, disability, or health insurance;
representing on an insurance claim form that you owned destroyed or stolen personal property that you did not own;
exaggerating the value of destroyed or stolen personal property on an insurance claim form;
misrepresenting the age or condition of destroyed or stolen personal property on an insurance claim form;
claiming medical treatment, prescriptions, or medical mileage costs you did not incur;
claiming a loss or impairment of income earning ability for disability benefits;
claiming that your disability from work was due to a work-related accident, for worker’s comp coverage, when instead due to disease;
claiming vehicle loss or damage that you did not actually incur;
misrepresenting the age, mileage, or condition of your damaged or destroyed motor vehicle;
claiming a business-interruption loss due to loss of power or fire or flood damage when due instead to natural sales declines; or
setting fire to your residential or business property to collect fire-damage coverage.

The Consequences of Insurance Fraud Crime

A conviction for insurance fraud can bring severe penalties and other consequences. Don’t underestimate the impact of a conviction for insurance fraud. Instead, let us help you fight the charges to eliminate or minimize the following potential consequences.

Criminal Penalties for Insurance Fraud

States and the federal government may punish insurance fraud not just as a misdemeanor but as a felony crime. Felony crimes can carry punishment of many years in prison. The federal false statement statute 18 U.S.C. §1033, for instance, punishes insurance fraud with up to a ten year prison sentence, increased to fifteen years if the fraud jeopardizes the company. State laws may punish felony insurance fraud with sentences of four years or more. State and federal laws also authorize fines of up to $50,000 or more for insurance fraud, depending on aggravating factors or mitigating circumstances.

Financial Consequences for Insurance Fraud

Conviction for insurance fraud may also lead to a restitution order requiring you to repay the insurance company or others for their related losses. Insurance fraud conviction may also hasten and confirm your civil liability. The insurance company may recover its entire loss, to which insurance contracts and civil laws may add costs, attorney’s fees, and expenses. Depending on the circumstances, you may also face punitive damages. Conviction for insurance fraud may also affect your credit, cutting off and accelerating credit lines, mortgages, or other debt obligations.

Employment Consequences for Insurance Fraud

Conviction for insurance fraud may also lead to serious employment consequences. Because insurance fraud is a crime of moral turpitude, you could lose your professional license or vocational certification, especially if you work in a position of trust with respect to personal or institutional finances. In the worst case, you could lose your job and career. Conviction for insurance fraud could carry other personal and relational consequences. Take insurance fraud charges most seriously.

Defending Insurance Fraud Charges

To sustain a charge of insurance fraud, prosecutors must have evidence satisfying each of the crime’s elements. The absence of evidence on any element should result in prompt dismissal of the charge. Just because you face criminal charges for insurance fraud does not mean that you committed the crime. Prosecutors have the constitutional burden to prove each element of the crime beyond a reasonable doubt. Defenses to an insurance fraud charge may include:

you did not make the alleged misstatements;
others made the alleged misstatements without your authorization;
you did not intend to deceive the insurance company;
your statements were substantially true and accurate;
you believed your statements to be true and accurate;
you were mistaken about the true circumstances;
your misstatements were not material to your claim; or
police and prosecutors violated your constitutional rights.

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