Fraud Crimes

With all the laws and regulations governing how people should act and interact with each other, it is easy to unknowingly violate some of these laws. Fraud crimes are often prone to false allegations, which can make an innocent person get a wrongful conviction and other penalties, especially fraudulent offenses committed via the internet. To be guilty of a fraud crime, you have to commit an act against another person that results in an underserved gain for yourself and loss to the victim through deceitful means.

Even though fraud crimes are not violent or aggressive like robbery or theft offenses, violators of fraud laws can face severe criminal penalties under federal and state law. If you are facing fraud crime charges in Santa Ana, get in touch with us at the Darwish Law to discuss how we can defend you.

An Overview of Fraud Crimes in California

Fraud crimes generally involve deceitful actions and subterfuge of an entrusted position of trust mostly for financial gain, which causes loss to another person or unlawful gain. Under the broad definition of a fraud crime, there are different means in which a person can commit the offense. Regardless of the amount of money involved, a fraud crime carries unbearable consequences. A fraud offense can result in criminal and civil actions depending on the person who files the charge. Sometimes a government prosecutor can petition criminal charges against the defendant, and at the same time, the defrauded victim can bring a civil lawsuit to seek restitution.

A government prosecutor can file a fraud crime as a wobbler offense, meaning it can either become a felony or misdemeanor offense depending on the defendant’s criminal history and essential facts of the case. The standard of evidence proven in criminal lawsuits is higher than the standard evidence required in a civil lawsuit.

In a criminal case, the prosecutor must demonstrate and prove to the jury the specific elements of the fraud crime that the defendant has committed above a reasonable doubt. Although every fraud crime is different in terms of details and circumstances, most fraud crimes consist of the following crime elements:

  • Purposeful and intentional misrepresentation of particular issues or materials of fact
  • The defendant did the act with knowledge and awareness that it was deceitful or false.
  • The defrauded victim justifiably and reasonably trusted the false information to be true.
  • The defrauded victim suffered an actual loss after the false misrepresentation.

Any type of fraud crime, regardless of the circumstances and the amount of money involved, can negatively affect a person’s life. Apart from the possible conviction, fines, and restitution, the defendant can also face deportation consequences because fraud is considered an offense of moral turpitude in California. Below, we will discuss a general overview of various fraud crimes and their respective penalties.

Insurance Fraud

Fraud in the context of insurance occurs when a person makes an exaggerated and false claim seeking restitution for unreal injuries and losses or when an insurance provider knowingly denies policyholder compensation benefits that are due. A person who commits an insurance fraud seeks to obtain undeserved and improper payments from an insurer. Insurance fraud can attract severe penalties in California, depending on the type of insurance law a person violates. Here are common types of insurance fraud prosecuted in California:

1. Auto Insurance Fraud

A fraud involving auto insurance typically involves any deceitful acts of obtaining undeserved benefits from the car auto insurance provider. According to California penal code section 548-551, you commit an auto insurance fraud:

  • When you knowingly file a false compensation claim for car damage or loss you did not incur
  • When you stage an accident which never actually occurred to obtain unlawful and undeserved benefits
  • If you present two or more compensation claims for the same type of damage or loss
  • If you intentionally damage or abandon your car so that you can obtain false insurance coverage benefits

Penalties for auto insurance fraud vary depending on the law the defendant violated. A guilty defendant may face prison sentence, fine and pay restitution to the defrauded victim.

2. Workers Compensation Insurance Fraud

Workers' compensation insurance is a type of a federal-state program that provides restitution to employees for the injuries and losses they incur in the workplace. California penal code 549 and 550 defines acts that constitute workers' compensation insurance fraud. Making fraudulent or deceitful claims against the workers' compensation insurance system to obtain undeserved benefits is a violation of California workers' compensation laws. Here are examples of acts that can constitute to workers compensation insurance fraud:

  • Seeking compensation for non-work injury while claiming the injury is work-related
  • Faking or exaggerating the severity of an injury
  • Failure to disclose a past injury that is relevant to your workers' compensation claim

Employers are also culpable under California workers' compensation insurance fraud laws. An employer will be guilty of this crime if he/she commits the following acts:

  • Provide false information to their insurance company about the number of employees
  • Knowingly lie to the employee the potential benefits of an injury to discourage the employee from seeking compensation
  • Misrepresent an injured employee’s job obligations/duties so that he/she can receive less compensation benefit or none at all

Penalties for workers' compensation fraud crime will vary if the prosecutor files the charge as a wobbler offense. Fraudulent workers' compensation claims often involve large sums of money, which means the prosecutor is likely to charge the offense as a felony. A felony charge on this crime can result in three to five years imprisonment and a maximum of $150,000.

3. Unemployment Insurance Fraud

Unemployment insurance is a type of federal-state program designed to help people who lose their jobs at no fault obligation to meet their needs for the first year while they are actively seeking employment opportunities. To be eligible for unemployment insurance, you must be actively looking for a job, have worked for the past eighteen months, and be physically fit to work.

You commit unemployment insurance fraud when you fraudulently file false representations or identification to obtain undeserved and unentitled benefits. Bilking or tricking the unemployment insurance system so that you can receive unlawful benefits can also lead to unbearable sentences, including fines and prison terms.

Fighting any insurance fraud case is not an easy thing to do alone. Therefore, you need to contact a criminal defense attorney as soon as possible for an investigation and assessment of your case to identify loopholes on the allegations for proper legal defense.

Credit Card Fraud

Using another person's credit card information to make a fraudulent transaction constitutes a credit card fraud per California penal code 484e. Credit card fraud is a form of identity theft that happens when someone takes your debit card physically or its information without your consent to obtain money from it or make purchases fraudulently. According to the California penal code section 484e-484j, you commit a credit card fraud when you do the following:

  • Steal credit card or use lost credit card to obtain money from it or buy goods
  • Forge another person credit card information without his/her consent
  • Use a fake or counterfeit credit card
  • Publish another person credit card information
  • Knowingly accept a stolen credit card to pay goods and services
  • Fraudulently use an expired credit card to obtain goods and services or money

Credit card fraud can lead to misdemeanor or felony charges depending on the specific facts of the case and the law violated. Severe credit card fraud is punishable by a prison sentence of up to three years. To non-citizens, there might also be some immigration consequences because credit card fraud falls in the category of “deportable” moral turpitude crimes.

Mail Fraud

California law prohibits the use of mail to commit fraudulent activities. Generally, you commit mail fraud when you use a fraudulent scheme to make a financial deal via mail through false contracts or receipts. Below are the criminal elements that a prosecutor must prove above a reasonable doubt to convict a defendant for a mail fraud:

  • The defendant had a scheme to commit mail fraud
  • The defendant used the mail to further a fraud scheme
  • The defendant had the intent to commit mail fraud

A scheme in a mail fraud can be any plan intended to deprive someone of his/her property or money. As long as the defendant used a mail system to pull a fraud scheme, he/she will be guilty of this federal crime even if the fraud was not successful. In California, a mail fraud can attract a prison sentence of 20 years and fines. You will need to seek a criminal defense attorney’s services to possibly exonerate you from this charge or seek lesser charges because such a lengthy prison sentence can significantly affect your life.

Identity Theft

As per California penal code 530, you’re guilty of identity theft crime when you take another person identifying information such as address or account numbers with intent to commit fraudulent or unlawful acts, mostly for financial gain. Identity theft constitutes a fraud crime because it involves unlawful gain and causes unfair losses to another person.

Identity theft falls under the category of “wobbler” offense in California. Therefore, the prosecutor has the right to submit the criminal charge to court as either a misdemeanor or a felony offense depending on the defendant’s past criminal history records and circumstances surrounding the offense. A misdemeanor identity theft is punishable by a sentence of up to one year and a maximum of $1,000 fine. On the other hand, a felony identity theft is more severe as it carries an imprisonment term of up to three years and a fine amounting up to $10,000. The defendant would be guilty for violation of California penal 530 even if he/ she did not intend to defraud the victim, as long as he/she took the victim's personal identifying information.

Gambling Fraud

Under California penal code 332PC, you commit a gambling fraud when you defraud another person of his/her property or money through game tricks such as gambling or betting. California penal code 332 does not forbid gambling, but it makes it illegal to use stacked decks, card tricks, and other types of schemes to trick people into gambling or betting so that you can obtain their money or property.

Gambling fraud carries the same penalty as crimes such as petty theft or grand theft. If you defraud another person's property or money worth less than $950, you will be facing misdemeanor charges. A misdemeanor gambling fraud charge attracts a penalty of $1,000 maximum fine and six months jail sentence. On the other hand, defrauding another person's money or property worth more $950 through betting game tricks is a felony. A guilty defendant is subject to a prison term of six months to three years and a maximum fine of up to $5,000 for a first-time fraud offense.

Telemarketing Fraud

Telemarketing fraud is another common fraud crime in California because it can simply take place over the phone or computer. Engaging in a telecommunication fraud is a crime as per the California Business and Professions Code 17511.9. During the commission of telecommunication fraud, a person with fraudulent intent may just call a victim over the phone and use false misrepresentations to lure a victim into giving out his/her personal information such as social security number or bank account number. You are also guilty of a telecommunication fraud if you call someone via the phone and make a deal to sell something you have no intention of delivering so that you can obtain undeserved money.

To convict a defendant for a telecommunication fraud, the prosecutor must prove the following crime elements of the crime:

  • The defendant was an agent representative or salesperson.
  • The defendant used a telecommunication device to make fraudulent business deals.
  • The defendant was involved in a fraudulent business activity directly or indirectly over the phone with the motive to obtain money from the victim.

Telemarketing fraud is a “wobbler” offense meaning that the prosecutor can file the charge as either a misdemeanor or felony depending on the severity of the offense. A misdemeanor telemarketing fraud carries a prison sentence of one year and $10,000 fine for each transaction. At the same time, a felony charge is punishable by the same amount of fine but longer prison sentence of up to three years. Instead of imprisonment, the guilty defendant may also receive formal or informal probation under certain conditions.

Misuse of Handicap Placards

California vehicle code 4461 makes it a criminal offense to use disability parking license plates or placards wrongly and intentionally. The offense is also commonly known as handicapped parking fraud. You commit this crime when you do the following:

  • Lend your disabled parking license plates or placard
  • Use an expired, canceled or revoked disabled placard knowingly
  • Park your vehicle in the parking lot designated for handicapped only

The prosecutor must prove the above elements of this crime to hold the defendant guilty during the trial. Misuse of this parking placard for the disabled can either be a misdemeanor or infraction offense in California, and it is punishable by six months jail term and $1,000 fine. You would be an exception to this law only if you were transporting a disabled person or at a reasonable proximity to the disabled placard’s legal holder.

Real Estate Fraud

Real estate fraud is likely to involve a lot of money, considering the price of real estate in California. According to California law, you commit a real estate fraud when you engage in fraudulent activities connected with purchasing, selling, or renting a real estate property. A person with fraudulent intent can commit this crime at any stage of real estate transaction, whether during appraisal or foreclosure. Below are laws used to prosecute real estate fraud cases:

  • Foreclosure fraud – This type of fraud affects people facing foreclosure. According to California penal 2945.4, you commit a foreclosure fraud when you knowingly charge or collect an excess service fee from homeowners, defraud homeowners into signing unlawful contracts or take an interest in a real estate property that is subject to foreclosure
  • Forged title deeds – Use of forged title deeds or documents to defraud another person is a crime according to California penal code 115. The law makes it a crime to record or file a forged document with a government office such as the county clerk’s office to obtain money or property
  • Rent skimming – California civil code 890 makes it a crime for landlords or investors to collect the first rent revenue and fail to pay obligatory responsibilities such as mortgage
  • Theft by pretense – Committing a real estate theft through pretense is also a crime, whether through fake representations or false promises. Defendants can be guilty for violation of penal code 487 if the real estate fraud involved theft by false representation.

Prosecutors rely on the above laws to prosecute people who commit fraud related to real estate. The punishment for real estate fraud involves a prison sentence, fines, or probation. After real estate fraud allegations, contacting a criminal defense attorney can increase the chances of having the case dismissed or reduced to a less severe charge.

Healthcare Fraud

Fraud in the healthcare system involves players such as doctors, nurses, or patients. Healthcare fraud, also known as health insurance fraud, includes the following deceitful acts:

  • Filing of false health insurance claims
  • Filing of multiple health insurance claims
  • Submission of undercharges in the absence of overcharges
  • Preparation documents to support false health insurance claims
  • Submission of false health insurance claims for undelivered benefits

The above fraudulent acts define health insurance fraud or healthcare fraud. The defendant will be guilty of healthcare insurance fraud if he/she willfully violates any of the above laws. However, the prosecutor must prove the following two crime elements of health insurance fraud for the judge to grant conviction:

  • The defendant had intent defraud
  • The defendant knew that the claims were deceitful or fraudulent

The penalty for health insurance fraud depends on whether the amount of money involved. A health insurance fraud involving more than $950 is charged as a felony, while a charge involving an amount of less than $950 is a misdemeanor. A misdemeanor health insurance fraud consists of a penalty of up to six months sentence and a fine amounting up to $1,000. If the government prosecutor charges the offense as a felony, the defendant will be subject to a prison term of three to five years and $50,000 fine or a fine equivalent to a double amount involved in the fraud.

As illustrated in this article, it is evident that a fraud crime in California can result in harsh penalties even if it does not involve any type of violent act. The fraud crime a prosecutor will file in connection to a fraud activity depend on:

  • The specific facts of the case
  • Specific law the defendant violated
  • The past criminal history of the defrauder and other aggravating factors

After any allegations or accusations of a fraud crime, you should contact a criminal defense attorney as soon as possible for a comprehensive evaluation of your case to identify the potential legal defenses.

Find a Fraud Crime Defense Attorney Near Me

There are different legal defenses a criminal defense attorney can use to protect you from possible harsh penalties of fraud crimes in California, such as lack of intent or mistaken identity. Do not give in to a fraud crime charge without contacting a criminal defense attorney to explore the possible legal defenses that can possibly help you get lighter penalties or have your punishments reduced. Darwish Law is here to help you get a better understanding of the above issues related to fraud and ensure that your legal rights are protected. If you have a case in Santa Ana, we invite you to call us at 714-887-4810 to talk to our knowledgeable attorneys about your fraud case for a result-oriented legal representation.