Auto insurance fraud refers to the crime of knowingly lying to obtain compensation from your auto insurance provider. It is a serious offense that causes losses to the insurance company and is severely prosecuted in California. Various laws describe various forms of auto insurance fraud. You, therefore, need to have the San Jose Criminal Attorney Law Firm help you understand the specific charges you are facing, their consequences, and the possible defenses.
Auto Insurance Fraud Overview
Auto insurance fraud involves any activity by a policyholder, body shop, healthcare provider, attorney, or another party that engages in fraudulent activities with the specific aim of defrauding the insurance company. The elements of insurance fraud vary depending on the specific penal code you violated. However, there are general elements that must be present. They include:
- You had the specific intent to commit the offense
- You complete the act, for example by submitting a false claim
You are guilty of auto insurance fraud, even if the insurer does not suffer any losses.
Damaging, or abandoning a vehicle
- PC 548 prohibits you from abandoning or damaging your vehicle to file a fraudulent claim. The prosecution has to prove that you damaged, secreted, hid, or abandoned your car.
- When doing this, you had the intention to defraud or influence the insurance company
You are guilty of violating PC 458 even if you did not file the claim, or your policy is invalid. What counts is the specific intent to commit the offense.
You can also be guilty of the offense if you sell your car for parts, or through an untraceable transaction and report it as stolen.
Some situations that can lead to charges of violating PC 458 include:
- Damaging your car and reporting it as an accident
- Hiding your car and reporting it as stolen
- Vandalizing your car and reporting it as theft
Damaging or abandoning a car is a felony in California. If you are found guilty of the offense, you face several penalties including:
- Felony probation
- A county jail term of up to five years
- Fines as high as $50,000
The court may also impose a two-year sentence enhancement for any prior violation of California's auto insurance fraud laws.
Causing an accident
PC 550 prohibits you from knowingly causing or participating in a traffic accident to defraud by making an insurance claim.
Causing an accident is a felony in California. The penalties include:
- Formal probation
- Up to five years in county jail
- A fine of $50,000 or twice the amount you intended to defraud (whichever is higher)
The offense also carries the potential of sentence enhancements depending on the facts of the offense and your criminal history. These enhancements include:
- Two years for prior auto insurance fraud convictions
- Up to five additional years for at least two prior convictions for auto insurance fraud by causing an accident
- Two years for every person other than the accomplice who was injured
- Up to three or more additional year if another person other than you or the accomplice suffered great bodily injury
Soliciting or Referring Auto Insurance
PC 549 prohibits individuals from referring or businesses from soliciting business to make a fraudulent claim.
Soliciting happens when an employee, individual, or owner of the auto repair shop finds customers post-accident and intends to make a false insurance claim.
You are also guilty of violating the law if you refer someone to a business that you know submits fraudulent insurance claims.
Another way body shops could be guilty of auto insurance fraud include:
- Overpricing the final cost of repair
- Using non-manufacturer parts but charging for manufacturer parts
- Charging for nonexistent repairs
The offense is a wobbler depending on the facts of the case and your criminal history.
The penalties for a felony conviction include formal probation, a maximum incarceration period of three years in county jail and fines not exceeding $50,000 or two times the amount involved (you will pay the higher amount between the two)
Filing a fraudulent claim
PC 550 covers various instances that count as an auto insurance claim. These include:
- Staging an accident
- Filing multiple claims for the same damages
- Filing multiple claims for several people for the same loss
- Submitting false information when filing a claim or applying for a policy
False information can be given orally or in written form, including lying about your residence.
When these activities are done knowingly, and with the intent to defraud, then you will be charged with auto insurance fraud.
The offense is convicted as a felony; however, the offense can be charged as a wobbler if it involved making false statements. The penalties for a felony conviction include:
- Up to five years in county jail
- A fine of $50,000 or twice the amount you intended to defraud, whichever is greater
If you are convicted of a misdemeanor for making false statements, then the penalties include up to a year in county jail and a fine of $10,000.
Auto insurance fraud cases are mostly felonies. Therefore, you risk spending years in county jail if you are convicted. In addition, you have to pay significant fines and probation fees if you are released on probation.
An insurance fraud lawyer will develop a solid defense strategy to fight these charges. The success of the defense will depend greatly on the skill of the attorney, the circumstances of the crime, the evidence against you, and your flexibility in accepting suitable offers.
For example, if the prosecution has overwhelming evidence against you, your flexibility in accepting the best plea increases the chances of less severe consequences.
Note that, while your attorney has the legal knowledge and initiates negotiations on your behalf, you have the final say on whether to settle or not.
Before deciding to settle at the pretrial stage or not, you have to seek the counsel of your attorney. Ensure that you are willing and have the strength to withstand the uncertainties of trial.
Going to trial is risky, especially when the prosecution has sufficient evidence to prosecute you for the offense, and possibly add sentence enhancements or additional charges.
Whether you will defend your case during the pretrial stage or at trial, your lawyer can use several legal defenses. These include:
Lack of Intent to Defraud
The intent to defraud is a major element of auto insurance fraud. However, it is also difficult for the prosecution to prove beyond a reasonable doubt.
Police, insurance companies, and the prosecution are keen on punishing auto insurance fraud, which could lead to an arrest due to actions committed accidentally or without criminal intent.
For example, the insurance company may attempt to pin an auto accident on you to avoid paying you for the damages. However, your lawyer, with the help of an accident reconstruction expert, can help reconstruct what happens. With that reconstruction, your lawyer can prove that the accident was just an accident rather than a criminal act with the intent to defraud.
Luckily, if the prosecution cannot prove that you showed the required intent, it will drop your charges, or you will be acquitted.
The Claim Was Not Fraudulent
Insurance companies can flag a genuine claim as fraudulent. Over the years, insurance companies have grown to identify the most common areas where insurance fraud takes place. Auto insurance fraud is one of the common ones.
The company can, therefore, flag a genuine claim as a fraudulent one. For example, if you report your vehicle as stolen, the company can claim that you faked the loss to defraud the company.
In such a case, you will need an experienced lawyer to prove that you made a legitimate claim.
Revenge, anger, and jealousy are the main drivers of false accusations. A person might accuse you of committing the offense to cover his or her misdoing.
False accusations are an acceptable defense to auto insurance fraud charges.
When you are facing these charges due to false accusations, you need an attorney to help you prove your innocence.
Your accuser might have lined up enough evidence to incriminate you, meaning you have to build a strong defense so that you do not suffer consequences you an offense you didn't commit.
Your lawyer will help you fight false accusations through witness testimonies and cross-examining witnesses, arresting officers, and the person who reported the offense. In most cases, a good attorney will find inconsistencies and gaps in the testimony used to accuse you of the offense falsely.
For example, if an expert witness seems to side with the prosecution, it could be an indication that he or she is giving biased or false testimony.
In other cases, witnesses could be working together with the actual fraudster. For example, if the car ahead of you brakes so that you rear-end it, the "victim" might collaborate with other motorists to accuse you of the offense.
Lack of Knowledge
Auto insurance offenses such as submitting multiple claims, soliciting businesses, or referring customers require knowledge. However, if you make a mistake, you cannot be guilty of the offense.
A mistake could arise if you solicit business for your employer without the knowledge that he or she will make a fraudulent claim.
Duress refers to a situation where another person forces you to commit auto insurance fraud. It can happen if the person threatens to take adverse action against you or your loved one.
When you use duress as a defense, you lack the power to form the criminal intent required to commit auto insurance fraud.
The prosecution will have the burden of proving that you acted wilfully
Law enforcement officials may be so eager to arrest someone for an offense that they may plant the idea into the defendant's mind.
If you committed the offense due to entrapment, the charges would likely be dismissed. However, you have to prove that you would not have committed the offense.
For example, if you have prior convictions for auto insurance fraud, proving entrapment can be difficult. However, with a dedicated attorney, you can provide evidence to prove entrapment. This evidence could include proving that the officer picked on you due to your previous criminal record.
Illegally Obtained Evidence
In their zeal to prosecute you for insurance fraud, law enforcement agencies may break certain laws and violate your rights to obtain evidence.
For example, if the officers search your house without a warrant or your permission, your lawyer can successfully initiate a motion to suppress the evidence.
You Withdrew from the Plan
If you intended to collaborate with other parties to committing auto insurance fraud but withdrew before any action was taken, you could fight against the charges.
One of the elements of auto insurance fraud is intent accompanied by action towards committing the offense.
If you had the intent but did not commit an act to further the offense, your charges might be dismissed. In some cases, the prosecution might require you to witness against the other defendants.
When the prosecution lacks enough evidence to prosecute you, it cannot prove the elements of the offense. Some of the signs that the evidence is insufficient include ambiguity raised by circumstantial evidence, conflicting testimony by witnesses, and complicated evidence that does not directly point at the defendant.
Your attorney might introduce several motions to suppress evidence, dismiss charges, or prevent the prosecution from filing unsupported charges.
Fighting auto insurance fraud charges can be expensive. Therefore, you need to take time when choosing an attorney. Make sure that he or she has a successful track record of settling similar cases during the trial or the pretrial stages.
Investigation of Auto Insurance Fraud
Most auto insurance fraud investigations begin with suspicion from the insurance provider. Insurance companies are allowed by the law to report suspected cases of fraud. The companies gather their evidence when determining the cause of the accident and estimating the settlement owed to the claimant.
Due to the reporting requirement, these companies are protected from lawsuits by the defendant in case the person did not commit fraud. This protection can give rise to false accusations and the use of fabricated evidence and coached expert witnesses to testify against you.
Once the company reports the offense to law enforcement, the agency should launch its own investigation to determine whether there is sufficient evidence to prosecute the case.
Sometimes, prosecutors may fail to conduct an investigation, preferring instead to use the reports and evidence from the insurer.
Such actions increase the likelihood of being convicted for an offense you did not commit.
It is important to hire a skilled lawyer who is willing to work diligently on your case to get the best outcome for you.
He or she should be willing to conduct a thorough investigation into the circumstances surrounding the offense, the basis of the 'fraudulent' claim, and the records that indicate fraud.
If you did commit the offense, then your attorney should be in a position to fight for the best possible outcome, including dismissal of the charges or acquittal.
Part of the investigation for auto insurance fraud involves interviews with auto insurance companies. When conducting such interviews, the statements you make can be used to build a case against you.
The best thing is to refer them to your lawyer.
During the investigation, keep off social media. Insurance companies are in business for profit. They can, therefore, claim that a claim is fraudulent to avoid paying you the settlement you deserve. They can twist your words, pictures, or any information your friends or relatives post on social media.
Investigators will also conduct a background check on you to determine your past, your financial position, including financial struggles you are going through, and your criminal record and affiliations. While these can be used as circumstantial evidence to show your likelihood to commit the offense, they are not always accurate.
If the claim in question also involves injuries sustained in a motor accident, the insurance company might conduct surveillance to determine whether the injuries are genuine.
You may be charged with additional offenses to auto insurance fraud, depending on the circumstances of the crime. The prosecution might choose to bring more than one charge against you, especially if the evidence is overwhelming or after you proceed to trial after rejecting a plea deal. These related charges include:
Kickback From An Auto Repair Shop
PC 551 prohibits you from referring customers to a certain auto repair shop in exchange for a commission. It is a form of fraud that leads to an increased settlement from the insurance company. Some of the people involved in this form of fraud include auto insurance company employees, attorneys, medical care professionals, and employees of the auto repair shop.
PC 551 is a wobbler offense depending on the amount involved.
If the amount is less than $950, the offense is a misdemeanor. The penalties include:
- Incarceration for up to six months in county jail
- A fine of up to $1000
The penalties for a felony offense include:
- Up to three years in county jail
- Fines of up to $10,000
If you intentionally burn your car to commit insurance fraud, you can be charged with arson under PC 451.
Intentional arson is always convicted as a felony in California with penalties such as:
- A state prison incarceration term of 16 months, two or three years
- A fine of ten to fifty thousand dollars or twice the amount you intended to defraud
- A strike on your criminal record
- Mandatory registration as an arson offender
The court might also increase your sentence if aggravating factors are present. These aggravating factors include:
- A prior conviction for malicious arson
- Someone suffers a great bodily injury due to the fire
- You act leads to the destruction of multiple structures
- You use devices to delay or accelerate the fire
Health Insurance Fraud PC 550
You can be charged with both health and auto insurance fraud if you fake injuries or exaggerate the cost of medication or medical procedures to collect a higher settlement.
If the offense involves an amount of less than $950, you will be charged with a misdemeanor. The penalties include a maximum of six months in jail and a fine not exceeding $1000.
If the amount exceeds $950, the offense becomes a wobbler depending on your criminal record. A felony charge will have a county jail term of up to five years and a fine of up to $50,000 or double the amount involved in the fraud.
If you are a medical care professional who collaborates with another party to engage in auto insurance fraud, you could lose your professional license.
False Report of A Stolen Vehicle
VC 10501 prohibits making false reports of auto theft with the intent to deceive. The offense is usually charged in relation to auto insurance fraud.
First-time offenders are charged with a misdemeanor. The penalties could include up to six months in jail and a $1000 fine.
Subsequent violations of VC 10501 are charged as wobblers. If charged as a misdemeanor, you will pay a fine of $1000 and spend up to one year in county jail.
When charged as a felony, the penalties include incarceration in a county jail for up to three years and a fine of up to $10,000.
Find An San Jose Auto Insurance Fraud Attorney Near Me
Auto insurance fraud is a complicated area of law. You will need an attorney who understands the various laws dealing with different forms of auto insurance fraud, to help you in fighting the charges. When you are facing charges of auto insurance fraud, the potential penalties are harsh. The California Criminal Lawyer Group represents people arrested or charged with auto insurance fraud. The firm works closely with investigators and prosecutors to fight these charges. In addition, the firm evaluates the evidence against you and conducts its separate investigation to establish the facts of the case. Contact us at 408-622-0204 for legal defense if you are facing auto insurance fraud or related charges.