What Happens After An Arrest On Auto Insurance Fraud Charges?

Under PC 548, PC 549 & PC 550

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Overview of Auto Insurance Fraud

Automobile insurance fraud can be committed by policy holders or the insured as well as by healthcare providers, auto shop owners, attorneys and anyone else who aids and abets them. Conduct that qualifies as insurance fraud includes:

  • Purposely damaging, concealing or abandoning your car to collect the insurance proceeds
  • Staging an accident with fabricated injuries and presenting a personal injury claim
  • Knowingly submitting a false claim for damages, theft or other losses regarding your car
  • Knowingly make an oral or written statement that contains false or misleading information as part of an insurance claim
  • A body shop owner or employee who offers a bribe or monetary inducement to insurance adjusters or agents to induce their policy holders to have their vehicles repaired at their shops
  • Presenting multiple claims for the same accident

Abandoning or Damaging an Auto – Penal Code 548

It is unlawful to deliberately abandon or damage your car to collect the loss from the insurer for the car. You do not have to follow through on the act so long as there is evidence of your intent to deceive the insurer so that it suffers or would have suffered a loss.

Proving the Crime

Proving that the damage to your car was not related to the claim can be done by an experienced appraiser or body shop expert who can determine when the damage occurred.

A violation of this section is a felony. You face:

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Referring or Soliciting Auto Insurance Fraud Business — Penal Code 549

Auto body shops are in competition for business from insurers and sometimes will offer kickbacks to adjusters to get them to refer their insured’s cars to them for repairs. An adjuster may also be guilty by offering to refer business in return for a fee.

Proof of the Crime

Such schemes are often discovered by investigators working undercover by either offering bribes to auto shops or soliciting them from auto body shop owners or employees.

The commission of a crime under this code section is a wobbler offense. If charged and convicted as a felony, you face:

  • Formal probation
  • 16 months, 2 or 3 years in county jail
  • A fine up to $50,000 or double the fraud, whichever is greater

If a misdemeanor, you face:

  • Informal probation
  • Up to one year in county jail
  • A fine up to $1000

If you are charged a second time under this code section, it is a straight felony.

Auto Insurance Fraud Under Penal Code 550

A number of false auto claims come under PC 550.

Fraudulent Claim for Theft, Destruction or Conversion—PC 550(a)(4)

You commit this offense if you:

  1. Fraudulently claim payment for a loss because of theft, vandalism, destruction or conversion or for the loss or theft of the vehicle’s contents
  2. With knowledge that the claim was false
  3. And with the intent to defraud the insurer when you presented the claim

An example is having inflicted the damage yourself or it came from a previous accident and then claim it was from the present accident under which you are presenting the loss claim. Another instance is providing receipts for items allegedly stolen from your car that were never in the vehicle.

Proof of the Crime

The state can offer proof that the damage came from another source or could not have been caused by this accident because of the physics involved.

If you reported the car as stolen but investigators only found your fingerprints in the car, this may be persuasive evidence of fraud.

Presenting Multiple Claims—PC 550(a)(4)

You are committing fraud by making more than one claim for the same loss to different insurers or even the same one with intent to defraud the insurer.

Any violation under PC 550(a)(4) is a felony. If convicted, you face:

  • Formal probation
  • 2,3 or 5 years in county jail
  • A fine up to $50,000 or double the fraud, whichever is greater

Intentionally Causing an Accident—PC 550(a)(3)

Staging an accident is not that uncommon and can be difficult to detect. Its elements are:

  • Causing an accident or participating in one
  • With the knowledge that it is for the purpose of presenting a false or fraudulent claim
  • And with intent to defraud

You can be guilty under this code section even if you did not personally collect any insurance proceeds so long as you participated in it.

Proof of the Crime

Insurance adjusters are aware of the practice and are suspicious of many accidents that are not fraudulent. They do look for inconsistencies in statements from the persons involved and suspicious medical statements or reports that look contrived or rubber stamped. Healthcare providers who are not part of the scam may report their suspicions as well. Prosecutors may also promise leniency or immunity to a participant who is suspected in the fraud if the person would offer testimony against others who were more actively involved.

If convicted under this code section, you face:

  • Formal probation
  • 2, 3 or 5 years in county jail
  • A fine up to $50,000 or double the fraud, whichever is greater
  • An additional 2 years for each prior auto insurance fraud conviction
  • An additional 5 years if you have 2 prior convictions under PC 550(a)(3)
  • An additional 2 years for each person who suffers a serious bodily injury in an accident that you intentionally caused under this section
  • Possible additional 3 years or more if you personally inflicted great bodily injury on someone who was injured while you were intentionally causing an accident

Making a False Statement—PC 550(b)(1)-(4)

You may commit fraud by any of the following:

  • Presenting an oral or written statement that is part of or that opposes a claim for an auto insurance benefit  or payment knowing that the statement was false or misleading concerning a material fact
  • Making an oral or written statement for the purpose of obtaining insurance in California when you actually reside elsewhere

Proof of the Crime

A material fact is certainly asserting that you live in certain state or city while living elsewhere so as to obtain lower rates. An investigator need only visit the alleged residence to confirm that you are not living there or examine tax records to see which home or location was claimed as your residence.

An undercover investigator may also pose as an auto accident victim to an attorney’s office or health care provider while confessing that he is doing it for the money only and is not injured. If the attorney or healthcare provider goes along despite this knowledge, they are guilty of fraud.

Commission of a crime under this section of Penal Code 550 is a wobbler offense. If charged and convicted of a felony, you face:

  • Formal probation
  • 2, 3 or 5 years in county jail
  • A fine up to $50,000 or double the fraud, whichever is greater

If a misdemeanor:

  • Informal probation
  • Up to one year in county jail
  • A fine up to $10,000

Legal Defenses

Lack of Intent 

Insurance adjusters are naturally suspicious and will closely scrutinize injury claims where there is little property damage or the alleged injuries are soft tissue with the symptoms subjective and difficult to corroborate with diagnostic tests. Even a misstatement or misinterpretation of a key provision in a policy may lead to a charge of fraud. For instance, you may live in California and Arizona and believe your residence is in California but you do not meet its residency requirements, or you neglected to advise your insurance adjuster when you moved.

You may also have not noticed prior damage to your car and assumed the present accident caused it and claimed it as such.

Lack of Evidence 

It is difficult to prove you abandoned your car or deliberately damaged it without credible and direct evidence from another person that contradicts your statements.

What Our Clients Say

Expungement For Auto Insurance Fraud

Expungement is available under California Penal Code 1203.4 PC for criminal convictions where no state prison time is served. Any misdemeanor qualifies as do most auto insurance fraud convictions, even if it is a felony, since county jail time rather than time in state prison is imposed. You do face state prison if you have prior felony convictions for insurance fraud.

  • Find Out if You Are Eligible To Have Your Record Expunged
  • Stop Worrying About Employer Background Checks
  • Start Worrying About Landlord Background Checks

Related Offenses

Healthcare Fraud

In conjunction with an auto insurance claim, you may commit healthcare fraud by submitting bills for services not performed or which were performed by someone who was not licensed but are charged as if you, as a licensed physician, did so.

Fraud is also committed when certain procedures or services are billed at more expensive rates. Healthcare fraud are either misdemeanors if the fraud amount is $950 or less, or a wobbler offense if it is more than $950.

Arson-PC 451

Arson in the context of auto insurance fraud is the deliberate burning of your motor vehicle for the purposes of collecting the insurance proceeds for your loss. This is a felony and you face 16 months, 2 or 3 years in state prison and a fine up to $50,000 or double the amount of the fraud, whichever is greater.

What You Should Do Now

If you are serious about defending your charges against auto insurance fraud contact us for a free confidential 30 minute consultation.

 

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