Criminal Liability for Insurance Fraud
Submitting a false or fraudulent insurance claim of any type – health insurance, homeowner’s insurance, automobile insurance, or otherwise – is a crime in Florida. A conviction for insurance fraud is a felony and could result in jail time in addition to civil penalties and restitution.
At Herman Law, P.A., our dedicated team has expertise in criminal law, including white collar crimes such as insurance fraud. Principal attorney Ron D. Herman is a former prosecutor and is dedicated to serving clients throughout South Florida. Attorney Herman will evaluate the specifics of your case and work with you to develop a plan of action that achieves the best possible outcome in your case. Criminal charges are a serious matter, but with Attorney Herman’s experience and knowledge of prosecutorial tactics on your side, you can rest assured that your interests are protected.
What Is Insurance Fraud?
Insurance fraud, as defined by Florida statute, ecompasses many forms of fraudulent activity against an insurer and can arise in many contexts and through many professions.
At its most basic level, insurance fraud is producing false or fraudulent statements (written, oral, or otherwise) in support of a claim seeking a benefit under an insurance policy with knowledge that the statement is false or misleading for the purpose of defrauding or deceiving an insurer.
Examples of this type of fraud can include deliberately causing a typically accidental event, such as setting a house on fire or purposely flooding a home in order to claim insurance proceeds for the damages. Any statements made to an insurer intended to support the belief that the fire or flood was accidental would constitute false or fraudulent statements. Another example is orchestrating a motor vehicle crash or creating documentation purporting to evidence a motor vehicle crash that did not occur for the purposes of defrauding an automobile insurance company.
Insurance fraud can also arise in professional situations. For instance, a physician who conspires with or assists a patient in filing false insurance claims and knowingly benefits from the fraud is guilty of insurance fraud. Similarly, a person or entity licensed to operate a hospital who knowingly allows use of the hospital to commit insurance fraud also commits a crime. An attorney who willfully assists a client commit insurance fraud is also guilty of the crime.
The punishment for a person convicted of insurance fraud differs based on the value of the property involved in the scheme to defraud.
- In cases in which the property is valued at less than $20,000, the defendant commits a third degree felony punishable by up to 5 years in prison and/or a fine of no more than $5,000 for a first offense.
- In cases in which the property is valued at between $20,000 and $100,000, the defendant commits a second degree felony punishable by up to 15 years in prison and/or a fine of no more than $10,000 for a first offense.
- In cases in which the property is valued at more than $100,000, the defendant commits a first degree felony punishable by up to 30 years in prison and/or a fine of no more than $10,000 for a first offense.
If a defendant is classified as a “Habitual Felony Offender” pursuant to Florida statute 775.084, meaning he or she has been convicted of two or more prior felonies, potential prison sentences may double in maximum length.
Florida’s insurance fraud statute provides two distinct civil remedies against persons convicted of insurance fraud.
First, any insurer damaged by a convicted defendant’s fraudulent action may bring a civil cause of action for compensation for damages plus costs related to fraud investigation and litigation expenses, such as attorneys’ fees.
Second, in the case of motor vehicle insurance fraud, a defendant is subject to a penalty of $5,000 for a first offense, up to $10,000 for a second offense, and up to $15,000 for a third or subsequent offense. These funds must be paid to the State’s Insurance Regulatory Trust Fund, which serves to fund the investigation and prosecution of these cases.
Additionally, a defendant who is professionally licensed by a state governed board, such as a medical doctor, hospital administrator, or attorney may lose his or her license to practice the profession for a period of years or permanently.
Defenses to Charges
Defenses to insurance fraud charges are different in each case. However, three general defenses to crimes related to fraud generally apply:
- Lack of intent to deceive or defraud;
- The statement made is not false or fraudulent; or
- There is a mistake of fact (the defendant truly believed an insurable event was an accident when it was the result of an intentional act by a third party).
In addition to being criminally responsible for insurance fraud, a defendant may also be liable for other criminal charges, such as conspiracy or participation in a scheme to defraud, which involves obtaining property through systematic ongoing fraudulent conduct intended to deceive or defraud another.
Receiving proceeds of the crime may also open a defendant up to federal criminal charges such as tax evasion, money laundering, wire fraud, or bank fraud.
Contact a White Collar Criminal Defense Attorney
A conviction for committing insurance fraud has serious consequences. First, this is a felony carrying with it a potentially substantial prison sentence. Insurance fraud is also a crime of fraud or dishonesty, which may forever limit employment or educational opportunities and cast a convicted felon as a criminal for life.
If you are involved in an investigation or criminal prosecution for insurance fraud you should reach out to Herman Law, P.A. as soon as possible. Attorney Ron D. Herman will schedule a free consultation and explain what you should expect. Hiring a trusted advisor such as Herman Law, P.A. puts you in the hands of an experienced attorney who will ensure your rights are protected.
Herman Law, P.A. serves clients in Ft, Lauderdale, West Palm Beach, Martin, Okeechobee and Palm Beach Counties and throughout South Florida