You violate California fraud laws anytime you act in a way that gives you an unfair advantage or undeserved benefit or harms another person. In most cases, fraud crimes are financially motivated, although some commit fraud to avoid criminal culpability. Fraud is a form of white-collar crime and could subject you to charges in both state and federal court for the same offense. Most fraud crimes in California are prosecuted under California’s theft, forgery, or perjury laws.
In this article, the California Criminal Lawyer Group will discuss some of the common fraud crimes in California.
You are guilty of insurance fraud when you attempt to obtain insurance benefits or payments to which you are not entitled. Some of the common examples of insurance fraud are:
1. Auto Insurance Fraud
You are guilty of auto insurance fraud when you knowingly make a false insurance claim or deceive an insurance company to receive benefits you are not legally entitled to. You could be charged with insurance fraud under different statutes, including:
- PC 548 makes it a crime to damage, abandon, injure, hide, or dispose of a vehicle with an auto policy against loss or damage to defraud the insurance company. This offense is a felony punishable by two, three, or five years in jail and a fine of up to $50,000.
- PC 550(a)(4) makes it a crime to present a fraudulent insurance claim for damage, destruction, or conversion of a vehicle. The prosecution must prove that in addition to presenting a false claim, you were aware that the claim was fraudulent or false and intended to defraud. You would also be guilty of auto insurance fraud under this statute if you present multiple (two or more) claims for the same damages or loss. Submitting a fraudulent insurance claim is a felony punishable by up to five years in jail. The court might apply sentence enhancements based on the case’s facts.
- Causing an accident to present a fraudulent insurance claim is a crime under PC 550(a)(3). In this case, the prosecution must prove that you intentionally participated or caused an accident, the goal of the accident was to file a false or fraudulent claim, and you had the intent to defraud. The prosecution must also prove that the accident was a direct and natural consequence of your actions and would not have happened without these actions. Violating PC 550(a)(3) is a felony punishable by between two and five years in jail and up to $50,000 or double the fraud amount, whichever is greater.
- Preparing false written or oral statements as part of an auto claim on material facts is also a crime under PC 550(b)(1)-(4). The penalties, in this case, include up to a year in county jail and $1000 in fines.
- Businesses that solicit, accept, refer, or share profit from a fraudulent insurance claim could result in criminal liability under auto insurance fraud laws. Businesses that refer, solicit or accept insurance fraud businesses are guilty of auto insurance fraud under PC 549 and could face felony charges. The penalties include up to three years in jail fine of up to $50,000 or double the fraud amount, whichever is greater. If charged as a misdemeanor, you face up to one year in county jail.
2. Health Insurance Fraud
Healthcare fraud or medical insurance billing fraud occurs when health care providers defraud insurance companies. Some of the common forms of healthcare fraud include:
- Submitting claims for services not provided
- Submitting false or fraudulent claims by performing an unnecessary procedure, billing for a more expensive procedure than was offered, or applying some charges to patients with insurance and not on those who pay out of pocket
- Filing multiple claims for the same service
- Submitting claims for services that were undercharged without including those that were overcharged
- Preparing a document to support a fraudulent claim
When you engage in one of the above activities and know that the claim was fraudulent and had the intent to defraud, the prosecution will charge you with healthcare fraud. The penalties for healthcare fraud depend on the value of the fraudulent claims within twelve months.
For claims less than $950, you will face misdemeanor charges with a maximum of six months in jail and $1,000 in fines.
For claims more than $950, you could face misdemeanor or felony charges. For a misdemeanor charge, you could spend up to a year in jail and pay up to $10,000 as fines. For a felony offense, you face between 2 and five years in county jail or one year in county jail with probation. You might also have to pay a fine of up to $50,000 or double the fraud amount, whichever is greater.
A conviction for healthcare fraud could result in the revocation or suspension of your professional license.
3. Unemployment Insurance Fraud
Both employers and employees could be charged with unemployment insurance fraud in California under California Unemployment Insurance Code 2101. Some of the common ways employees violate unemployment insurance fraud include:
- Collecting unemployment benefits while working and not reporting that income
- Collecting other benefits and not reporting them
- Using a false SSN, name, or employment information to receive unemployment benefits
- Living in California and attempting to collect benefits in another state
- Cashing another person’s unemployment check without that person’s permission
- Fabricating your attempts to find work
- Falsifying your reasons for not being employed
Employers could be guilty of unemployment insurance fraud by:
- Intentionally falsifying information about the reason for an employee’s termination so that they do not continue contributing to the unemployment insurance program
- Knowingly withholding deductions from employees without submitting them to the EDD
The penalties of unemployment insurance fraud will depend on the statute under which the prosecution charges you. If charged under Unemployment Insurance Code 2101, you face $20,000 in fines and a jail term of up to a year. The prosecution could also charge you with a felony under the statute, in which case you might face up to three years in prison.
Unemployment insurance fraud under PC 550 is a wobbler. The penalties for a misdemeanor conviction include:
- Up to six months in county jail and $1000 in fines for amounts less than $950
- Up to one year if the amount was $950 or more, but the court charges it as a misdemeanor.
- If the amount exceeds $950, you might face felony charges with a potential sentence of two to five years in jail and up to $50,000 in fines or double the fraud amount
Other penalties of unemployment fraud include:
- Professional discipline
- Ineligibility to receive paid benefits
- Repayment of benefits with an additional 30% penalty
Other forms of insurance fraud include:
- Welfare fraud
- Worker’s Compensation insurance fraud
- Medi-Cal insurance fraud
4. Real Estate Fraud
Any fraud committed in relation to a real estate transaction violated California’s real estate fraud laws. Real estate fraud could involve different fraudulent transactions completed at any stage of the real estate proceedings.
Prosecutors will often use different theories to prosecute real estate and mortgage fraud, including:
Theft By False Pretenses
When charged with real estate fraud through false pretenses, the prosecution is charging you for defrauding a person of their money or property through false representations and promises. The prosecution must prove that:
- You intentionally deceived a mortgage lender or real estate owner
- You deceived the person by making false promises
- The victim relied on this promise when they gave you their money or property.
Foreclosure fraud in relation to foreclosure proceedings where you:
- Charge the homeowner for a service you before you provide that service
- You charge an excessive fee for this service
- You take money from a third party for their services without informing the homeowner.
- You take a power of attorney from the homeowner
- You fraudulently get a homeowner to sign an illegal contract
Rent skimming is another common form of real estate fraud, which occurs when you either:
- Rent a residential property in the first year you acquire it and fail to repay the mortgage on that property,
- You pretend to own a property, rent out that property and keep the rental proceeds.
Forged Deeds or Documents
You are guilty of real estate fraud if you file, register, or record false or forged documents with a government office, knowing that these deeds or documents are false or forged.
Some of the common forms of real estate fraud the prosecution might charge you with include:
- Foreclosure fraud
- Straw buyer schemes
- Illegal property flipping
- Predatory lending
Prosecutors often charge real estate fraud under different statutes, including:
- PC 487 grand theft
- Civil Code 2945.4 Foreclosure fraud
- Civil Code 115 Filing forged documents
The penalties of real estate fraud vary depending on the statute under which the prosecution charges you. Here are the common penalties:
- When charged as grand theft, you face up to one year in county jail for a misdemeanor and up to three years in jail for a felony conviction. The same penalties apply when charged for foreclosure fraud under Civil Code 2945.4 or multiple counts of rent skimming under Civil Code 890.
- Filing forged documents is always charged as a felony with a sentence of up to three years in county jail and up to $10,000 in fines.
5. Financial Fraud
Financial fraud offenses are some of the most prevalent violations involving an undeserved financial gain. The common financial fraud offenses include:
Penal Code 476 makes it a crime to commit check fraud. Under this statute, check fraud includes the following elements:
- You attempted or possessed, made, passed, used a false, fictitious, or altered check for payment.
- You knew that the check was altered or false
- You intended to pass the check as genuine
- You committed these acts with the intent to defraud
Prosecutors charge check fraud under forgery laws, which makes this offense a wobbler. The penalties for misdemeanor check fraud include a maximum jail term of one year and a fine of up to $1000. The penalties for a felony conviction include a maximum of three years in jail and $10,000 in fines.
If you are an immigrant charged with check fraud, the offense could result in negative immigration consequences such as inadmissibility or deportation. You might also lose your gun rights if the prosecution charges you with felony check theft.
Credit Card Fraud
California has several sections of the Penal code that define different types of credit or access card fraud. These include:
- PC 484(e) makes it a crime for you to sell or possess someone else’s credit card or credit card information without that person’s consent. Violating this statute is charged as grand theft with a maximum county jail sentence of three years.
- PC 484(f) criminalizes forging credit card information by either altering another person’s card or signing another person’s name on a credit card without their consent. Violating PC 484 (f) is a forgery offense punishable by up to one year in county jail for a misdemeanor and up to three years for a felony conviction.
- Under PC 484(g), fraudulently using an account or credit card is an offense that could result in charges for petty theft or grand theft. The maximum penalties include up to one year in county jail for petty theft and up to three years in county jail for grand theft.
- PC 484(h) makes it a crime for a retailer to accept payment from a stolen or fake credit card when they know it is not valid or presents fraudulent evidence of receiving payments for goods or services when that transaction never occurred. This offense could result in charges for petty theft or grand theft.
- PC 484(i) makes it a crime to manufacture or possess a counterfeit credit card or equipment for counterfeiting credit cards. The possession or manufacture of counterfeit credit cards could result in charges for a misdemeanor or felony, with three years in county jail as the maximum possible penalty for a felony conviction.
- Penal Code 484(j) makes it a crime for you to knowingly communicate credit card information intending to defraud a person or entity. Publishing credit card information is a misdemeanor punishable by up to six months in county jail.
Security fraud laws in California make certain behaviors a crime to protect investors. Some of the common actions that lead to securities fraud charges include:
- Selling unqualified securities
- Failing to abide by the qualification terms when selling securities
- Providing false or misleading information when selling securities (this could include intentionally giving false information or failing to provide key facts when selling securities)
- Securities fraud charges could also arise due to insider trading (where someone with access to insider information due to their special relationship with a company uses it to make a profit)
Securities fraud is a California wobbler. Selling securities in California without complying with or in violation of qualification terms could result in the following penalties:
- Fines not exceeding 1 million dollars
- 16 months, two or three years in county jail
Willfully engaging in insider trading or market manipulation results in penalties such as:
- Fines of up to ten million dollars
- A county jail sentence of two, three, or five years
The federal department of justice could also prosecute you for violating federal securities laws. A conviction for securities fraud in federal court could lead to a 20-year sentence in federal prison.
6. Identity Theft
PC 530.5 defines identity theft as taking another person’s identifying information and using it unlawfully or fraudulently. You are guilty of this crime if the prosecution can prove the following elements:
- You willfully obtain another person's personal identifying information and use that information without the owner's consent.
- You took someone's personal identifying information without their consent with the intent to commit fraud.
- You sell, transfer, or provide another person's identifying information with someone else without the owner's consent and with the intent to commit fraud.
- You sell, transfer or provide someone with another person's identifying information knowing that the recipient will use that information for fraud.
Personal identifying information includes someones:
- Name, date of birth, address, or telephone number
- Tax ID
- Social security number
- Driver’s license number
- School or employee ID number
- Mother’s maiden name
- Bank account or credit card information
- Information on birth or death certificates
Identity theft is a wobbler; the penalties for a misdemeanor offense include summary probation or up to a year in county jail and $1000 in fines. The penalties for felony identity theft include felony probation, up to three years in state prison, and up to $10,000 in fines.
Besides, you might face negative immigration consequences, including deportation and inadmissibility.
7. Senior Fraud
You are guilty of financial elder abuse if you steal, embezzle, or defraud money or property from a person aged 65 or older. Some of the common examples of senior fraud include:
- Failing to pay an elder’s bills when you are responsible for them
- Making unauthorized purchases or withdrawals using the elder’s financial information
- Making fraudulent changes to an elder's power of attorney
The elements of senior fraud include:
- You committed a financial crime
- The property involved in the offense belonged to an elder
- You were the elder’s caregiver
- You knew or should have reasonably known that the person was an elder
A financial crime includes theft, forgery, fraud, or embezzlement. California punishes senior fraud under theft crimes, meaning that the penalties you face depend on the value of money or property involved.
You are guilty of misdemeanor elder fraud if the property value or money involved in the fraud was less than $950. Some of the penalties for a misdemeanor violation are:
- Informal probation
- Up to a year in county jail
- Up to $1,000 in fines
You are guilty of felony senior fraud if you defrauded a person 65 years or older of property or money amounting to $950 or more. The penalties include:
- Felony probation
- Two to four years in state prison
- Up to $10,000 in fines
- A strike on your record if the offense was in connection with a burglary
You face half the sentence if charged for attempted financial elder abuse.
8. Internet Fraud
Internet fraud or cybercrime includes any form of fraud that occurs over the internet. California made internet crime an offense following complaints to the FBI by numerous California residents about losing more than 46 million dollars to cybercrime in 2010.
The common examples of frauds offenses that constitute internet fraud include:
- Fraudulent schemes conducted through email or the internet
- Accessing computer data without the owner’s consent
- Phishing schemes
Prosecutors apply Penal Code 530.5 PC identity theft when prosecuting phishing offenses where:
- You willfully obtain the personal identifying information (PII) and use that information unlawfully without the person's consent.
- You possess or acquire someone's PII without the person's consent with the intent to defraud
- You sell, transfer, or provide another person with the victim's PII without their consent, knowing that the recipient intends to commit fraud.
- You sell, transfer, or provide the PII of another person without their consent to commit fraud.
Phishing through PC 530.5 is a wobbler that could result in a sentence of up to three years.
The prosecution could charge you with phishing under the business and professions code 22948, which makes it a crime to use email, webpages, or the internet to obtain another person’s PII. In most cases, violating this statute exposes you to civil liabilities.
Accessing a person’s computer without consent or authorization is a crime under California Penal Code 502. You can violate this law by:
- Accessing or helping someone to access a computer, software, data, or a computer network without permission
- With the intent to defraud, harm, or commit a crime
- You acted knowingly and without permission
Accessing a computer without permission is a wobbler in California. The penalties for a misdemeanor conviction include up to a year in jail and up to $5,000 in fines. A felony offense includes a sentence of up to three years and up to ten thousand dollars in fines.
Internet fraud offenses might also lead to federal charges depending on the circumstances of the crime. Therefore, you must work with a criminal attorney who can practice in federal court when facing these charges.
Find a Fraud Criminal Defense Attorney Near Me
You should hire a fraud defense attorney if you or a loved one is facing fraud charges. California Criminal Lawyer Group works with defendants charged with different forms of fraud. Schedule a free consultation at 714-766-0965 to discuss your case with our fraud defense team.