California Penal Code 550: Insurance Fraud

Legal Definition: Every person who willfully injures, destroys, secretes, abandons, or disposes of any property which at the time is insured against loss or damage by theft, or embezzlement, or any casualty with intent to defraud or prejudice the insurer, whether the property is the property or in the possession of that person or any other person, is guilty of defrauding an insurer. (PC 548(a)).It is unlawful to do any of the following, or to aid, abet, solicit, or conspire with any person to do any of the following:

• Knowingly present or cause to be presented any false or fraudulent claim for the payment of a loss or injury, including payment of a loss or injury under a contract of insurance (PC 550(a)(1)).
• Knowingly present multiple claims for the same loss or injury, including presentation of multiple claims to more than one insurer, with an intent to defraud. (PC 550(a)(2))
• Knowingly cause or participate in a vehicular collision, or any other vehicular accident, for the purpose of presenting any false or fraudulent claim (PC 550(a)(3)).
• Knowingly present a false or fraudulent claim for the payments of a loss for theft, destruction, damage, or conversion of a motor vehicle, a motor vehicle part, or contents of a motor vehicle (PC 550(a)(4)).
• Knowingly prepare, make, or subscribe to any writing, with the intent to present or use it, or to allow it to be presented, in support of any false or fraudulent claim. (PC 550(a)(5)).
• Knowingly make or cause to be made any false or fraudulent claim for payment of a health care benefit (PC 550(a)(6)).
• Knowingly submit a claim for a health care benefit that was not used by, or on behalf of, the claimant. (PC 550(a)(7)).
• Knowingly present multiple claims for payment of the same health care benefit with an intent to defraud. (PC 550(a)(8)).
• Knowingly present for payment any undercharges for health care benefits on behalf of a specific claimant unless any known overcharges for health care benefits for that claimant are presented for reconciliation at that same time. (PC 550(a)(9)).

For a person to be convicted of a violation of PC 550, the prosecution must prove the following:

1a. You presented/caused to be presented a false or fraudulent claim for payment for a loss or injury

1b. You falsely or fraudulently claimed payment for a loss due to theft/destruction/damage/conversion of a motor vehicle/a motor vehicle part/contents of a motor vehicle

1c. You prepared/made/signed or subscribed to a document with the intent to present or use it/allow it to be presented to support a false or fraudulent claim

1d. You made/caused to be made a false or fraudulent claim for payment of a health-care benefit

1e. You presented a claim for a health-care benefit that was not used by or on behalf of the person named in the claim

1f. You claimed payment for undercharges for health-care benefits for a specific person without presenting for  reconciliation, at that same time, any known overcharges for benefits for the same person

2. You knew that the claim was false or fraudulent

3. When you did that act, you intended to defraud.

What does this mean?

Experienced professionals who possess expertise and authority commit fraud when they intentionally deceive others to cause financial loss or damage to legal, financial, or property rights. The intent and attempt to defraud are sufficient to commit the crime, without the actual occurrence of fraud or resulting losses. A claim for payment under an insurance contract encompasses claims for loss, injury, or healthcare benefits. This includes claims made on behalf of providers of workers’ compensation health benefits as defined in the Labor Code. Conversion of property involves unauthorized interference with someone else’s property, resulting in the deprivation of its use and possession by the rightful owner.

Medical facilities that bill insurance can commonly engage in fraudulent practices, such as double billing for services already rendered, billing for work not performed and falsely signed off on, or fabricating entire claims. This type of fraud primarily victimizes insurance companies, as they make payments for work that was not actually done.

Another common example is staging an automobile accident and falsely claiming that the car was stolen or involved in an accident, for the purpose of collecting insurance money.

Penalties

Insurance Fraud charges can be misdemeanors or felonies, depending on which charge you are being charged with. PC 550(a)(6) or 550(a)(8) are wobbler offenses, meaning they can be charged as misdemeanors or as felonies. If you are convicted of these charges as a misdemeanor, you could be sentenced to up to one year in County Jail. If convicted of these as a felony, you could be sentenced to upwards of 16 months, two or three years in State Prison. You would have to serve 50% of that time.
Most other Insurance Fraud charges, including PC 548, are felonies, where you could be sentenced to State Prison for upwards of two, three, or five years. You would have to serve 50% of that time in custody. No Insurance Fraud case as a felony is a Strike offense.In addition to the above, if you are a provider that needs insurance to be paid for your services, you could lose out on obtaining any insurance for your work in the future and could only require out-of-pocket expenses. You would also be financially responsible for any over-payment that has not already been seized in your bank accounts, including additional and hefty fines and fees. These are also Crimes of Moral Turpitude, so any person with a professional license or any immigrant here on a temporary basis will be heavily harmed as this is a crime of theft and dishonesty.For more specifics about what your exposure could be based on your charges, give us a call for a free case analysis about your situation.

Common Defenses

1. Statute of Limitations
2. Insufficient Evidence
3. Mistake of Fact
4. Violation of your Rights

Experienced, expertise, authority, and trustworthy issues can typically arise under this section due to a mistake of fact or lack of intent defense. If you are a sizable company with billers handling your billing, there is a potential for honest mistakes in billing for people using your facility. Correction may be required for wrong Tax ID numbers, and you may unknowingly receive twice the payment for services rendered.

It could also be the case that you had an honest but mistaken belief that work was completed when it was not, yet you still billed for it. However, this tactic does not work well for individuals making auto insurance claims by deliberately destroying their vehicle or falsely claiming damage, as it is a deliberate scheme to profit from insurance.

Call Today

Facing allegations related to fraud, such as those under PC 550, can be both stressful and overwhelming. These charges can have significant implications on your personal and professional life. Hence, the need for seasoned legal representation is undeniable.

At Inland Empire Criminal Defense, our attorneys are seasoned experts in fraud and theft offenses, including cases under PC 550. Drawing from a wealth of experience, we’ve been pivotal in securing favorable outcomes for countless clients. Our holistic approach ensures that we not only provide robust legal defenses but also offer emotional and procedural guidance throughout.

Given the intricacies of fraud-related cases, having a knowledgeable ally by your side can make all the difference. Allow us to be that ally. Benefit from our free initial consultation to gain insights into your situation and the potential strategies we can employ. Don’t hesitate; your future might depend on it. Reach out to Inland Empire Criminal Defense at 909-939-7126. Our office is conveniently situated in Ontario, CA, ensuring easy access for our valued clients.