Insurance fraud is a broad offense, often including all crimes in which an insured individual or entity proceeds to post a false or exaggerated insurance claim.
Insurance fraud may occur when individuals are deceived by insurance companies or agents to collect on money that they aren’t entitled to. Insurance fraud also occurs when individuals misrepresent to an insurance company that they are entitled to insurance benefits or applying for an insurance policy.
Given that insurance fraud is one of the most common white-collar crimes in the United States, it probably is not surprising that it covers several variations.
Premium diversion, for example, is an offense which takes place when an insurance agent embezzles monies paid by the insured rather than properly sending them to the underwriter. Further, it may be the case that the insurance agent in question is not registered whatsoever, and therefore does not pay out claims when the time comes to do so.
According to the FBI, premium diversion is one of the most typical insurance fraud schemes in the country.
False disability claims, falsified accidental injury claims (such as slip and fall claims) and phantom vehicle damage claims are examples of insurance fraud commonly conducted by individual citizens rather than entities.
Law enforcement agencies typically differentiate between hard fraud cases and soft fraud cases, with the former involving large organizations or financial industry professionals engaging in high-level offenses, and the latter involving individuals perhaps tweaking the truth or telling “white lies” in order to enhance a weak or nonexistent claim.
Insurance fraud occurs every day and examples include:
The most common types or categories of insurance fraud include those above as well as:
Insurance fraud is a crime taken very seriously by both the federal government and most state governments. The U.S. Code focuses on various forms of insurance fraud which involve interstate commerce in any fashion, which given the frequency that banks, insurers and other large financial organs are involved is commonplace in terms of this offense.
If you are found guilty of federal insurance fraud charges, you could face a sentence of up to 10 years in prison, or 15 if the fraudulent offense(s) in question actually lead to the dissolution of the insurer as a result. If you are convicted of insurance fraud while working in the capacity of an insurance company, whether the issue be embezzlement, theft or misappropriation of funds, you could face up to 10 years in prison, or 15 if your actions endanger the continued survival of the parent company.
Prior convictions involving dishonesty or breach of trust can enhance these federal penalties by up to five years per offense.
State courts also take charges of insurance fraud seriously in most cases, however, there are circumstances in which the crime may be considered a misdemeanor.
For example, in situations where the offense is related to health care benefits fraud of a sum less than $950, the charge may be categorized as a misdemeanor with a potential punishment of up to six months in county jail as well as a potential $1,000 fine.
If the sum involved is larger than $950, the offense may be categorized as either a felony or a misdemeanor, depending upon judgment and context. If convicted of the felony, you could face a penalty of up to five years imprisonment as well as a fine of either $50,000 or double the appraised value of the fraud.
Insurance fraud can either be considered a felony or a misdemeanor depending on the jurisdiction the crime is being pursued in, as well as the severity of the offense itself.
Almost all charges brought to federal court concerning insurance fraud will be classified as felonies, while insurance fraud charges heard in state court may be more likely to be classified as misdemeanors.
If you are facing charges related to insurance fraud, it is strongly advised that you seek the services of an experienced criminal defense attorney familiar with financial offenses.
An insurance fraud attorney will help you craft a stronger defense against your charges. Several common defenses employed against insurance fraud include evidence provided proving you not guilty of any such fraudulent activity or lack of intent or knowledge (unwitting pawn in a larger scheme, or simply having made a paperwork or filing error).
If you have been accused of insurance fraud, contact an insurance fraud attorney to protect your rights in court. Some of the ways an insurance fraud attorney may be able to help you include:
Contact an attorney specializing in insurance fraud cases if you are accused of defrauding an insurance company. The insurance fraud attorney will help you in your representation including avoid criminal charges and any possible penalties.