To drive in California, drivers must have valid automobile insurance. Based on the limits and form of coverage, an insurer pays for the injury to somebody else or vehicle damage due to a collision caused by the other driver. If you have been in an accident before, you know how costly repairs are, even for minor fender benders. Medical bills might be more than a thousand dollars if someone else was hurt in the crash. With the involvement of money, automobile insurance fraud can tempt individuals to earn cash by defrauding drivers or insurers.
Vehicle insurance fraud is a crime, and prosecutors know the possible ways people can commit it, which is why they treat vehicle insurance fraud cases very seriously. You need an expert defense to avoid a conviction if charged or under investigation. We at Los Angeles Criminal Attorney will do everything possible to mount a winning defense strategy for you.
Vehicle Insurance Fraud Overview
The California crime of automobile insurance fraud is defined differently based on what law section your criminal actions fall under. The primary forms of vehicle insurance fraud are:
549 PC, Soliciting/Referring Vehicle Insurance Fraud Business
There are many ways by which the employees, representatives, or owners of automobile businesses can break auto insurance statutes and therefore face criminal prosecution. This includes any business accepting, referring, or soliciting another business from or to any entity or person, knowing or disregarding whether the entity or person aims to commit vehicle insurance fraud.
551 PC, Illegal Referral to a Vehicle Repair Dealer
PC 551 criminalizes vehicle repair shops or their contractors, dealers, or employees offering an insurance agent, broker, or adjuster a commission, fee, profit, or other considerations, also called kickbacks, in exchange for referring policyholders to the shop for repairs covered by auto insurance. This law also makes it illegal for a vehicle repair dealer to consciously offer a potential customer a discount to offset a deductible on their (customer) insurance policy.
Undercover investigators usually unearth PC 549 and PC 551 violations by soliciting bribes from auto parts shop employees or owners or offering them to automobile shops.
550 PC, Making Fraudulent Claims
550 PC addresses different types of vehicle insurance fraud. 550(a)(4) PC, fraudulently or falsely claiming automobile destruction, damage, conversion, or theft is one of the types. For the court to find you guilty of this fraud crime, the district attorney must demonstrate the following elements beyond a reasonable doubt:
You fraudulently or falsely claimed damages for losses because of conversion, damage, destruction, or theft of an auto, an auto component, or contents of an automobile.
You knew of the claim’s nature as fraudulent or false.
You claimed those damages with the specific aim of defrauding the insurer.
The prosecutor does not have to prove that someone suffered actual financial loss resulting from your action for you to be sentenced. However, the prosecution must prove that you knew of the insurance claim’s nature as false/ fraudulent to be guilty of this fraud crime.
Proving the Violation
The prosecutor can provide evidence of the damage resulting from somewhere else. They may be able to prove there is no way damage resulted from this collision due to the science involved. If you had reported that the vehicle was stolen, but investigations only discovered your fingerprints in the auto, this might be convincing evidence of automobile insurance fraud.
550 PC(a)(3), Staging a Road Crash
You violate 550(a)(3) PC by participating in or staging an auto collision, knowing its purpose is to fraudulently or falsely claim compensation from the insurer aiming to defraud. You are deemed to have violated 550(a)(3) PC if these are factual:
The crash was the natural, direct, and probable consequence of your actions.
The collision would not have taken place without your action.
Evidence of the Criminal Offense
Insurance adjusters know about this practice and are usually suspicious of several non-fraudulent accidents. They look for any inconsistencies in statements from the involved persons and suspicious reports or medical statements that look rubber-stamped or contrived.
Healthcare providers not involved in the scam might also report any suspicions. Prosecutors can also promise immunity or leniency to a person suspected to be passively involved in the insurance fraud in exchange for testifying against others that actively participated.
550(a)(4) PC, Filing Multiple Claims
Another way of violating the automobile insurance fraud Penal Code is by knowingly presenting two or several claims for insurance compensation for one type of loss to one or different auto insurance providers intending to defraud. This violation is criminalized under 550(a)(4) PC.
550(b)(1, 2, 3, and 4) PC, Making False/Misleading Statements
Making misleading/false statements regarding auto insurance will be a PC 550(b)(1, 2, 3, and 4) violation. You break this law when you:
Present oral/written statements to challenge or support an insurance claim for a vehicle insurance compensation, aware the statements have misleading or wrong details regarding the material fact.
Make or prepare oral/written statements to challenge or support an insurance claim for a vehicle insurance compensation, aware that the report has misleading or wrong info concerning the material fact.
Make or prepare written/oral statements to be submitted to a vehicle insurance provider to obtain automobile insurance compensation claiming that you stay in California State when you stay somewhere else.
Evidence of Violation
A material fact asserts that you reside in a given city or state while residing elsewhere to acquire lower rates. Investigators need only review tax records to establish what location or home was claimed as your residence or visit the supposed residence to confirm you do not live there.
An investigator working undercover may also disguise themselves as a car crash victim to a health care provider or lawyer’s office while admitting that they are doing it only for the cash and are not hurt. If the health care provider or lawyer goes along regardless of knowing this, they have committed fraud.
548 PC, Abandoning/Damaging an Automobile
548 PC criminalizes injuring, destroying, hiding, abandoning, or disposing of an automobile insured against damage or loss, intending to prejudice or defraud the insurance provider. If you intend to defraud, you aim to deceive the insurance provider and hurt them by making them lose money or inflict damage on their financial, property, or legal rights.
Like PC 550, making fraudulent claims, the judge/ jury can find you guilty of vehicle insurance fraud by destroying, injuring, abandoning, or hiding a vehicle, regardless of whether or not the insurer loses money due to your action. You can also be guilty irrespective of whether or not the vehicle is yours.
Proving the Violation
Showing the damage caused to your auto was not linked to the insurance claim may be achieved by a skilled auto body shop expert or an appraiser who can establish when the damage occurred. Vehicle insurance fraud can be committed by the insured or policyholders and lawyers, automobile shop owners, health care providers, and anybody else who aids and abets them.
Penalties for Violating Auto Insurance Fraud Laws
The punishments for violating vehicle fraud law vary based on the statute you are accused of violating.
549 PC, Soliciting/Referring Vehicle Insurance Fraud-Related Business
Accepting, soliciting, or referring business to or from a person who aims to commit vehicle insurance fraud per 549 PC is deemed a wobbler violation. A wobbler is a crime that the prosecuting attorney may try as a felony or misdemeanor, considering the facts surrounding the criminal offense and the accused’s criminal history.
The possible consequences of a felony conviction are felony probation, up to three years in jail and a fine not exceeding 50,000 dollars or twice the fraud amount, whichever is higher. The potential consequences of a misdemeanor conviction are informal probation, a jail sentence of one year, and a fine that does not exceed $1,000.
Any second, third, or subsequent violation of this law is always a felony. The penalties when convicted will be felony probation, a maximum of three years in prison, and a fine not exceeding $50,000 or twice the fraud amount, whichever is higher.
551 PC, Illegal Referral to a Vehicle Repair Dealer
The type of vehicle insurance fraud that entails kickbacks from auto repair shops to insurance adjusters, agents, or brokers carries different consequences based on the money amount involved. If the kickback amount is 950 dollars or lower, a PC 551 violation will be a misdemeanor. The punishment upon a conviction will be a maximum of six months in jail and a fine that does not exceed $1,000.
If the kickback amount is more than 950 dollars, a PC 551 violation will be a wobbler. If convicted of a misdemeanor violation whereby the kickback amount is more than 950 dollars, you will face a jail term of one year and a fine of not more than $1,000. And if found guilty of a felony, you will be subject to up to three years in prison and a fine not exceeding $10,000.
550(b)(1, 2,3, and 4) PC, Making Misleading/False Statements
The crime of making any false oral or written statements is also considered a wobbler. If convicted of making false statements as a felony, you will face felony probation, up to five years in jail, and a fine that does not exceed 50,000 dollars or twice the fraud value, whichever is more.
You can also face an increased sentence of two years for every previous felony conviction of vehicle insurance fraud per 550 PC or PC 548. You may be ineligible for a suspended sentence or probation if you have prior felony convictions for vehicle insurance fraud.
But if convicted of making false statements as a misdemeanor, your possible punishment will be informal probation, a maximum of one year in jail, and a fine not exceeding $10,000.
550(a)(3) PC, Causing a Vehicle Accident
Committing vehicle insurance fraud by causing a crash is a felony offense. If convicted, you may face formal probation, up to five years in jail, and a fine that does not exceed 50,000 dollars or twice the fraud value, whichever is higher. Additionally, the following sentence increments will apply to this type of vehicle insurance fraud:
A possible three-year or more sentence increment if you inflicted significant physical injury on a person when causing the collision.
A two-year sentence enhancement for every person that is not your accomplice who sustains severe physical injuries because of your actions.
A sentence increment of five years for two or more prior felony convictions for auto insurance fraud by causing a crash under 550a3 PC.
A two-year sentence enhancement for every prior felony conviction for vehicle insurance fraud per PC 550 0r 548.
550 PC, Making Multiple Claims/Fraudulent Claims
Making a fraudulent/false claim and filing numerous claims are felony offenses. The penalties if convicted are felony probation, not more than five years in jail, and a fine not exceeding 50,000 dollars or twice the fraud amount, whichever is higher.
You can also be subject to a sentence enhancement of two years for every past felony conviction for vehicle insurance fraud under PC 550 or PC 548. And if you have any prior felony conviction for vehicle insurance fraud, the judge may deny you a suspended sentence or probation.
548 PC, Abandoning/Damaging a Vehicle
548 PC, abandoning, hiding, destroying, or damaging an insured auto intending to defraud/prejudice the insurance provider is a felony. The possible penalties upon a conviction are felony probation, not more than five years in jail, and a fine that does not exceed $50,000. You may also face a sentence increment of two years for every prior felony conviction for vehicle insurance fraud under PC 550 or PC 548.
Defending Against Auto Insurance Law Violation Charges
Prosecutors prosecute automobile insurance cases harshly for different reasons. One of these reasons is that vehicle insurance fraud cases have risen in California, and they are trying to curb these incidents. Industry groups approximate that of the casualty or property vehicle insurance claims they receive, 10% are fraudulent. The Los Angeles County DA's office has a distinct auto insurance fraud unit for dealing with these cases.
Another reason for harshly prosecuting these cases is that insurers are politically powerful. It is, therefore, to their advantage that the authorities be tough on vehicle insurance fraud. The insurance department in California works with prosecutors to ensure fraud suspects face the full extent of the law.
However, there is only a slight difference between abusive and aggressive law enforcement. The authorities employ an aggressive approach to automobile insurance fraud cases. This can result in shoddy investigations, overzealous prosecution, and rushed judgments. The prosecuting attorneys working in specialized automobile insurance fraud divisions must justify their job positions, leading them to concentrate more on making arrests and generating convictions than ensuring justice prevails.
If accused of violating auto insurance fraud law, you need a lawyer to fight for you. Your lawyer can argue the following defenses:
Lack of Fraudulent Intent
Fraudulent Intent is a critical factor in all vehicle insurance fraud cases. Most often, your vehicle insurance company will flag a careless error by you as potential insurance fraud and report the matter to law enforcement officers. However, it is upon the prosecutor to prove you aimed to commit vehicle insurance fraud, and it is not a simple mistake.
An experienced lawyer may succeed in casting doubt on this argument, leading to your charges being dismissed or achieving a not-guilty verdict in a trial.
Also, insurance adjusters are usually suspicious. Therefore, they closely review injury claims where slight property damage occurred or the supposed injuries are of soft tissues. The symptoms are subjective and hard to prove with diagnostic exams.
Even a misinterpretation or misstatement of key provisions in a policy might result in a vehicle insurance fraud charge. For example, you may reside in Arizona and California and believe your residence is in California. However, you do not satisfy its residency requirements or fail to advise your insurance adjuster when you relocate. You might also have failed to notice prior damage to your vehicle, assumed that the current crash caused it, and filed a claim for the same.
Your lawyer may be able to show that your mistake was honest and did not have any intent to defraud.
Insufficient Evidence for a Conviction
Most vehicle insurance charges revolve around intricate facts. It may be hard to determine what happened, especially if there is conflicting testimony, a convoluted paper trail, or circumstantial evidence. For example, it is challenging to show you deliberately damaged your vehicle or abandoned it without direct and credible evidence from someone else contradicting your statements.
If your lawyer can assist you in collecting the most solid evidence to show you are innocent and discover the ambiguities in the prosecutor's case, the judge may drop your charges.
Your lawyer may be able to successfully argue that you were wrongly accused of auto insurance fraud. They could assert that the victim falsely accused you of revenge, jealousy, or anger.
No Probable Cause for Arrest
The Fourth Amendment to the U.S. Constitution states that the police must have probable cause to arrest you for an offense. Your lawyer can argue that there was no probable cause for arrest, meaning the evidence collected after the illegal arrest must be struck off. In many cases, excluding critical evidence will compel the prosecution to dismiss the case or lower the charges.
Expunging an Automobile Insurance Fraud Conviction Record
Expungement for convictions that did not attract a prison term is possible under 1203.4 PC. Any misdemeanor conviction is eligible, as most automobile insurance fraud convictions, even if it is a felony, because a county jail sentence instead of state prison time is ordered.
You will be subject to prison time if you have past felony insurance fraud convictions, which would eliminate your qualification for a criminal record expungement.
Automobile Insurance Fraud and Related Offenses
Closely related crimes to vehicle insurance fraud can be prosecuted alongside or instead of this violation. They include:
Arson Under 451 PC
451 PC violation happens when you deliberately and with malicious intent set fire to a property. If you cause your car to burn with intent to collect vehicle insurance benefits fraudulently, you can be charged with arson alongside or instead of vehicle insurance fraud. A conviction of arson carries a prison sentence of up to three years. You could also face a fifty thousand-dollar fine or two times your anticipated financial benefits from the alleged automobile insurance fraud.
Health Care Fraud
You will be charged with healthcare fraud when you:
Bill an insurer for healthcare services you did not receive.
Bill an insurer for expensive healthcare services than you received.
Submit more than one insurance claim for the same healthcare services.
550 PC criminalizes healthcare insurance fraud actions similar to the vehicle insurance fraud actions addressed under the same statute. The consequences are identical as well. A vehicle accident, genuine or fraudulent, might result in health care fraud and automobile insurance fraud if you make fraudulent or numerous claims for medical bills and damage to the vehicle.
Falsely Reporting Vehicle Theft Under VC 10501
Falsely reporting vehicle theft is a violation often charged alongside car insurance fraud. You are guilty of violating this law if you file/make a false/fraudulent report to the police that your vehicle was stolen, intending to defraud. 10501 VC violation is deemed a misdemeanor carrying a jail term of six months upon a first conviction. Therefore, this violation can come in handy as a plea bargain for more serious charges of vehicle insurance fraud.
Contact a Skilled Automobile Insurance Fraud Attorney Near Me
At Los Angeles Criminal Attorney, we have several years of experience in criminal defense and are aware of the repercussions of violating automobile insurance fraud laws. We know how to approach the specific facts of every case for the most significant chance of success, assisting our clients in avoiding incarceration and hefty fines. If you have been arrested, charged, or are under investigation, call us at 424-333-0943 for help. You need not plead guilty just because the authorities are until you.