What is Insurance Fraud?

Folder with close up on the word claims and a note where it is written under investigation - what is insurance fraud concept

Insurance fraud occurs when a person makes false claims to an insurance company to obtain money or something else of value they are not entitled to. Like other fraud crimes, there is no single form of insurance fraud, and insurance fraud charges apply to a wide range of conduct.

The penalties for an insurance fraud conviction are severe. If you believe you are under investigation or have been charged with insurance fraud, speak to an experienced insurance fraud defense attorney before you talk to law enforcement agents or your insurance company.

New York insurance fraud defense attorney Hope Lefeber is frequently called upon to represent people charged with insurance fraud. She regularly represents high-profile clients, including Fortune 500 Company executives, doctors, lawyers, professors, medical professionals, entrepreneurs, and others who are under investigation or have been charged with insurance fraud.

What Is Insurance Fraud?

Insurance fraud is any deception committed for the purpose of obtaining an insurance payout.

To prove insurance fraud, the prosecutor must establish that 1) the perpetrator made a false statement, 2) with the intent to unlawfully obtain a benefit, and 3) the false statement was material to the outcome of their insurance claim.

Examples of Insurance Fraud

While there is no single form of insurance fraud, common examples of insurance fraud include:

  • Businesses or professionals improperly billing an insurance company for services.
  • Staged accidents, where someone deliberately causes an accident to collect the insurance money.
  • Falsely inflating the cost of a car accident property damage claim.
  • A homeowner who submits a false claim that their home was burglarized and valuables were stolen.
  • An uninjured and able-bodied worker collecting workers’ compensation benefits.
  • Making false statements on an insurance application or renewal.

Insurance Fraud Punishment

Insurance fraud is not a distinct offense under federal law. Instead, federal insurance fraud charges are typically prosecuted under mail fraud or wire fraud statutes, which confer federal jurisdiction over insurance fraud that affects interstate commerce.

Federal fraud crimes are generally divided into five categories. A Class A felony is the most severe, and a Class E felony is the least severe. The maximum sentence for a single Class A felony is life in prison and a fine of up to $250,000. The maximum penalty for a Class E felony is between one and five years in prison and a fine of $5,000.

As with most federal fraud charges, the punishment for federal insurance fraud will vary based on the amount of money allegedly taken. The sentence will be calculated under the Federal Sentencing Guidelines. The judge will analyze the seriousness of the offense and assign it one of 43 levels. The offense level can increase if there are extenuating circumstances and decrease if there are mitigating circumstances. Other factors can affect the sentencing guidelines calculation, such as whether a person pleads guilty, cooperates with the government, or is found guilty by a jury.

The judge will also evaluate a defendant’s criminal history and place a defendant into one of six categories. Category I is for most first-time offenders, while Category VI is for people with a lengthy or severe criminal history.

What Are Common Defenses to Charges of Insurance Fraud?

To prove insurance fraud, the prosecution must show that the defendant made a false statement with the intent to unlawfully obtain a benefit, and that the false statement was material to the outcome of their insurance claim.

Defenses to charges of insurance fraud will seek to eliminate one or more of the elements of insurance fraud. Common defenses to charges of insurance fraud include:

  • There was no intent to deceive.
  • The claim was not false.
  • The allegedly false statements were not material to the claim.
  • A portion of the claim resulted from legitimate losses that the insurance company should cover.
  • Unintentional mistake.

What Should You Do If You Are Charged with Insurance Fraud?

Insurance fraud is a serious crime, and a conviction carries severe penalties. If you believe you are under investigation or have been accused of insurance fraud, you must protect yourself and your rights. You should avoid talking to law enforcement agents or your insurance company without first speaking to an experienced insurance fraud lawyer.

Be sure to keep any documentation and other evidence that could be used to prove you are not guilty of insurance fraud. This may include police reports, medical reports, eyewitness testimony, and other information that can be used to show that you did not make false statements to the insurance company, did not intend to defraud the insurance company, or that any false statements you made were not material to your insurance claim.

Hope Lefeber has been defending people accused of insurance fraud and other financial crimes for more than 30 years. She has a comprehensive understanding of the statutes federal prosecutors use to charge people with insurance fraud. She will carefully analyze the evidence against you and mount a vigorous defense designed to lead to a dismissal of the case or a significant reduction in the charges against you.

To learn more and put Ms. Lefeber’s experience to work for you, contact the Law Offices of Hope Lefeber today to schedule a confidential appointment to discuss your situation.

Categories: Fraud