Auto insurance fraud costs insurers and taxpayers billions of dollars annually. The crime involves making a deliberate fake insurance claim or deceiving an insurer to receive payments to which you are not lawfully entitled. Consequently, prosecutors, judges, and investigators take the matter seriously. A conviction can significantly impact your future and life since it can carry fines, incarceration, and a damaged reputation. To defend yourself against these penalties, you will require skilled legal representation.
California Criminal Lawyer Group has many years of experience representing defendants throughout Anaheim. We can listen to your side of the story and carefully analyze your case facts to build the defense.
An Overview of California Auto Insurance Fraud
An individual commits car insurance fraud when they make a knowingly false insurance claim or deceive an insurance provider to receive benefits to which they are not lawfully entitled.
The definition of auto insurance fraud depends on the penal code section you allegedly committed. The section below discusses different types of car insurance fraud.
Abandoning or Damaging a Car (PC 548)
According to PC 548, it is illegal to engage in the following:
- Destroy, injure, abandon, dispose, or hide a motor vehicle insured against damage or loss
- Intending to prejudice or defraud the insurance firm.
- Intending to defraud refers to deceiving the insurer so that the company experiences loss of funds or damage to property, financial, or legal rights.
A person can be convicted of this crime even if:
- Their conduct did not result in any loss to the insurance provider, or
- They own the vehicle
Fraudulent Claims (PC 550)
PC 550 covers different kinds of auto insurance fraud, like presenting a fraudulent or false claim for destruction, conversion, damage, or theft of a car (PC 550(a)(4)).
A defendant violates PC 550(a)(4) when:
- They fraudulently or falsely claim payments for the loss on account of conversions, damage, destruction, or theft of a car, or motor vehicle parts
- They were aware that their claim was fraudulent or false
- The defendant planned to defraud when they submitted their claim
Just like PC 548, you can be convicted of this crime even if no one incurred a financial loss due to your conduct.
Multiple Claims (California Penal Code Section 550)
A defendant can also violate auto insurance laws when they:
- Present at least two claims for one loss to different or same insurance providers
- Knowing that they are submitting at least two claims for one loss
- Intending to defraud
Causing a Car Accident (PC 550(a)(3))
You violate this code section when you:
- Participate or cause a car accident
- Knowing that your aim of the collision is presenting a fraudulent or false insurance claim
- Intending to defraud
You commit this car insurance fraud if all the statements below are accurate:
- The collision was the natural, direct, and probable consequence of your behavior, and
- The crash would not have taken place without your conduct.
Moreover, you can violate PC 550 by engaging in one of the below:
- Presenting oral or written statements in opposition or part of the claim for a car insurance benefits or payment, knowing that your statements have misleading or false information about a material fact
- Making or preparing oral or written statements in opposition or part of an insurance claim for benefits or payment, knowing that your statements have misleading or false information about a material fact
- Making or preparing written or oral statements planned to be submitted to the insurer to acquire insurance, stating that you live in Golden State when you live somewhere else.
Proof that Violated Penal Code 550(b)(1)-(4)
A material fact means stating that you reside in a specific city or state while residing elsewhere to acquire lower insurance rates. The investigator can visit the residence to verify that you do not live there or review your tax records to see the location or home you claimed to be your residence.
Additionally, the investigator can pose as a car collision victim at a medical care facility or lawyer’s office while admitting that they are not injured and are doing it for the money. The medical health practitioner or lawyer violates the car insurance fraud laws if they proceed despite that knowledge.
Car Insurance Fraud Committed by Employees or Business Owners
There are numerous methods in which employees, representatives, or owners of car-related companies can violate the law.
- A company accepting, soliciting, or referring a firm from or to any entity or individual knowing that or indifferent to whether that entity or individual aims to commit car insurance fraud
- A car repair shop providing a profit-sharing fee, compensation, or commission to the insurance adjuster, broker, or agent, in return for referring a policyholder to seek repair services covered by car insurance.
Penalties, Consequences, and Sentencing of Car Insurance Fraud
The penalties depend mainly on the type of fraud crime you committed.
Abandoning or Damaging a Car
Violating PC 548 is a felony. It is punishable by:
- Formal (felony) probation
- $50,000 in fines
- Up to five years in county jail
Defendants are also likely to serve two additional consecutive years for every PC 550 or PC 548 felony conviction.
Multiple Claims or False Claim
Both presenting multiple claims or a false claim are California felonies. The crimes are punishable by the following potential consequences and penalties:
- Formal (felony) probation
- Two, three, or five years in county jail
- $50,000 in fines or twice the amount defrauded, whichever is higher
A defendant is also likely to serve an additional and consecutive two years for every PC 550 or PC 548 felony conviction. A previous felony conviction disqualifies you from a suspended sentence or probation.
Causing a Car Accident (PC 550)
Violation of PC 550 is a California felony. It carries the following penalties:
- Up to five years in county jail
- Formal (felony) probation
- Fines of fifty thousand dollars or twice the amount defrauded, whichever is higher
The sentencing enhancements below apply to PC 550:
- Two additional and consecutive years for every previous felony conviction under PC 550 or PC 548
- A defendant will face five additional consecutive years if they have at least two prior California Penal Code Section 550 felony convictions.
- A defendant would serve three additional consecutive years if they inflicted great bodily injuries on a person during the crime commission.
- Two additional and consecutive years for every individual apart from an accomplice who sustained serious bodily injuries due to their behavior
You will face a California wobbler for violating PC 550(b)(1)-(4). Depending on your criminal history and case circumstances, the prosecutor will charge you with either a felony or a California misdemeanor.
If charged with a misdemeanor, you will face the following potential penalties:
- Summary (misdemeanor) probation
- A one-year county jail sentence
- A maximum of $10,000
Felony consequences for making false statements are similar to penalties under Penal Code 550(a)(4) or 550(a)(2).
Soliciting, Accepting, or Referring Car Insurance Fraud Business
Violation of PC 549 is a wobbler.
A misdemeanor is punishable by:
- A one-year jail sentence
- $1,000 in fines
- Summary (misdemeanor) probation
A felony attracts:
- A formal (felony) probation
- Sixteen months, two years, or three years in county jail
- $50,000 in fines or twice the defrauded amount, whichever is higher
A subsequent PC 549 is an automatic felony.
Kickbacks From Car Repair Shops
The penalties attracted by violation of PC 551 vary depending on the amount involved.
If the kickback amount does not exceed $950, you will face a California misdemeanor. It attracts penalties like $1,000 in fines and six months in jail.
If the involved amount exceeds $950, the crime becomes a California wobbler. If charged with a California misdemeanor, you will pay $1,000 in fines and spend a year in jail. On the other hand, a felony carries $10,000 in fines and up to three years in jail.
Fighting Your Criminal Charges
There are numerous legal strategies that your Anaheim criminal defense lawyer can use to beat criminal charges. Each case is unique and requires a thorough examination of the facts and circumstances before formulating an effective legal defense. Some of the most common defenses include:
The Defendant Did Not Have a Fraudulent Intent
Defrauding intent is one of the elements in all types of car insurance fraud. That means the defendant cannot be sentenced if they did not act with the intent.
Typically, an insurance provider can flag a careless error and report it to law enforcers.
However, the prosecutor must establish that you intentionally planned to commit the crime. Your experienced defense lawyer should cast doubt on the assertion, resulting in a not-guilty verdict or dropped criminal charges.
Most car insurance criminal charges revolve around complicated facts. It could be hard for the prosecution to prove what occurred, especially if conflicting testimony, paper trails, and circumstantial evidence exist.
It is your lawyer’s responsibility to find weaknesses in the prosecutor’s case and assist you in building your defense.
Numerous crimes are charged alongside or in place of car insurance fraud, including:
Arson (PC 451)
Arson happens when a person burns property maliciously and willfully.
It is a felony that attracts up to three years in state prison. Additionally, it can result in $50,000 in fines or twice the total money of the expected financial gain from the fraud.
Health Care Fraud
Some of the instances of this fraud include the following:
- An individual billing an insurer for a medical service they did not receive
- A person billing an insurance provider for a more expensive medical service than what they received
- An individual submitting multiple insurance claims for one medical service
PC 550 bans different types of health care fraud, similar to car insurance fraud under the statutes. The penalties and consequences are similar.
A motor vehicle accident, whether fraudulent or real, can result in health insurance fraud and car insurance fraud if you submit multiple or false claims for medical bills and property damage.
Making False Reports of Car Theft (Vehicle Code Section 10501)
You will face VC 10501 charges if you file or make a fake report of your stolen car with the police, intending to deceive.
The crime is a California misdemeanor carrying up to six months in county jail for your first-time offense. Consequently, you can seek a charge reduction from a more serious car insurance fraud charge.
California Law on Companies’ Use of Conviction and Arrest Records
If you have been charged with car insurance fraud, you could be worried about how the criminal record will impact your job search. Most companies conduct criminal background checks before hiring. Moreover, it is not uncommon for bosses to inquire about a criminal record on job applications. Luckily, a job seeker with a criminal history has some protections.
The California ban-the-box law became effective in 2018. The Fair Housing and Employment Act amendment makes it unlawful for public and private entities with at least five workers to inquire about an applicant’s criminal record until later in the job application process. The law encourages companies to assess every applicant’s qualification for the position.
The law removes the question, “Do you have a previous conviction?” That means an applicant should no longer check “no” or “yes” to the question. Employers cannot inquire about, consider, or look into criminal records until you receive a conditional offer of employment.
After your employer makes the conditional offer of employment, they can inquire about your conviction records before considering you for the position. However, the following types of criminal records are off-limits for your employer.
- Arrest record — Your employer may not ask about your previous arrests that did not result in a conviction or use records associated with the arrests. However, your employer can ask about an arrest that led to a conviction or one for which you are awaiting trial.
- Sealed record — Your employer should not ask about an expunged or sealed conviction.
- Juvenile criminal records — Companies should not ask about your juvenile records linked to adjudication, detention, or arrest.
Before denying the employment opportunity based on your criminal record, the company should review whether the conviction has an adverse and direct relationship with the job’s duties. Some of the factors the employer will consider are:
- Severity and nature of the crime
- How long it has been since you violated the auto insurance fraud laws and served your sentence
- The position you are seeking
If your potential boss decides not to employ you following the inquiry, they should notify you of their decision. The written notice should:
- Outline your conviction that was the basis for the company’s decision
- Offer a copy of your conviction report
- Explain your entitlement to respond with evidence
You, the applicant, have five days to offer mitigating evidence or challenge the precision of your employer’s information that lowers the effect of your conviction. If you tell your potential boss within five days that you will take steps to collect evidence, you should be given another five days to respond to the notice.
What and When to Inform Your Boss About Your Auto Insurance Fraud-Related Arrest
If a person has been arrested, they could be terrified about alerting their employer.
While your arrest is nobody’s business, there are work-related circumstances where you must tell your boss. Although an arrest differs from your conviction, it could adversely affect your career. How your employer will react depends mainly on the job’s nature, the alleged offense, your case, and state laws.
Mandatory Arrest Reporting
Once many people are hired, they sign contracts or receive a handbook detailing their responsibilities. Some handbooks require employees to inform their bosses of criminal charges against them or arrests. Typically, most companies wait until the case disposition before deciding how to handle the matter. Your employer can forget the case upon a not-guilty verdict or dismissed criminal charges.
If you should tell your employer and fail to act so, you can face severe repercussions, including termination. If you are not sure whether you should report your arrest, you can find this information in:
- Your employee handbook
- Your firm’s code of conduct
- Employment contract
- Human resources department
- Official company website
Professionals like nurses, doctors, realtors, pharmacists, teachers, or physical therapists licensed by the state should report their arrests when renewing their licenses.
If a defendant is a law student and has been arrested, they should report their arrest. Every law school student should complete a character fitness application before taking their bar examination.
Company Driver or Commercial Driver’s License Holder
If you hold a CDL or drive a company car, you should inform your boss about the arrest. Generally, employers run background checks on workers. Therefore, it is wise to alert them before they learn.
You Should Make The Decision on Whether to Inform Your Boss After Careful Considerations
If you do not possess a professional license, you are not under the responsibility to tell your boss. Consequently, that decision is yours.
However, it is wise to inform your boss, particularly if they are likely to find out. Most California counties post summaries of criminal activities in the area, and your employers and colleagues could find your name and the alleged crime on that list.
If you decide to inform your boss, remind them of your contribution to the firm and reassure them that the criminal charges will not affect your job performance. Request your boss to reserve their judgment until the case is closed. Finally, tell them you have retained legal representation and expect a favorable case outcome.
Your Rights In Your Criminal Investigation
Being charged with fraud charges is an overwhelming experience. The criminal investigation resulting in an arrest can be confusing. You will be unsure what to do and how to interact with the law enforcers. Knowing that you have constitutional rights throughout your criminal process is essential.
Right Against Illegal Search and Seizure
The 4th Amendment to the United States Constitution protects you from unreasonable searches and seizures. Law enforcers should acquire a search warrant before searching your person, car, or home. To obtain the search warrant, the officer should request one from the judge proving that there is probable cause that they will find crime evidence on the property or person the police want to search.
The law enforcers should execute the warrant within its scope.
If the investigators violate your right against an illegal search and seizure, your skilled defense attorney should file a motion seeking exclusion of the evidence.
Right Against Self-Incrimination
According to the 5th Amendment, police officers cannot force you to offer evidence or testify against yourself in your criminal case. If the law enforcers ask you whether you committed the auto insurance fraud crime, you are entitled to remain silent if answering will incriminate you.
Right to Legal Representation
The 6th Amendment to the U.S. Constitution provides that a defendant should enjoy their right to legal assistance. If the defendant cannot afford a defense lawyer, the judge should appoint a lawyer at government expenses.
Entitlement to Adequate Legal Representation
The United States Supreme Court ruled that all defendants, represented by a public defender or private attorney, have a right to adequate representation. You have a right to adequate legal representation during plea bargain negotiations and at the trial.
Nonetheless, it does not mean perfect legal representation. The claims below can make a judge reverse a guilty verdict:
- Your lawyer put a law-student intern in charge of the criminal case and left the courthouse while your court hearing was proceeding
- During your closing arguments, your lawyer acknowledged that you were guilty of a less severe offense without first securing your approval of the tactic.
Find Skilled Legal Representation Near Me
When you file an insurance claim for auto benefits, the insurance provider will conduct thorough investigations into the matter. If the insurer determines that your claim was fraudulent, the firm will report it to law enforcers. The reporting can result in auto insurance fraud charges that can have severe ramifications and adversely impact your life, future, reputation, and finances. Hiring a lawyer can help in protecting your rights and freedom. California Criminal Lawyer Group has extensive knowledge and experience in fraud laws. We understand the nature of the crime and how to protect your rights, develop valid legal defenses and resolve your charges without you serving time. Please contact us at 714-766-0965 to schedule your initial free consultation and learn how we can help you.