Fraud

Published: 08th June 2006
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Fraud



Fraud is generally defined as the intentional use of deceit, a trick or some dishonest means to deprive another of his/her/its money, property or a legal right. Quite often there are several persons involved in a scheme to commit fraud and each and all may be punished criminally. There are several different types of fraud. Constructive fraud can be proved by a showing of breach of legal duty, like using the trust funds held for another in an investment in one's own business without direct proof of fraud or fraudulent intent. Extrinsic fraud occurs when deceit is employed to keep someone from exercising a right, such as a fair trial, by hiding evidence or misleading the opposing party in a lawsuit. Since fraud is intended to employ dishonesty to deprive another of money, property or a right, it can also be a crime for which the fraudulent person or persons can be charged, tried and convicted. Fraud, which victimizes a large segment of the public, has become the target of consumer fraud divisions in the offices of district attorneys and attorneys general.



Fraud is a specific intent crime, requiring that the person intend the specific act and its outcome. Specific intent refers to the mental state of mind of the perpetrator.



Insurance Fraud



Insurance fraud has become a big problem in society, resulting in a lot of prosecutions. People acting alone or in concert with a "crew," stage accidents, file fraudulent claims for personal injury or damage to the vehicle. If a person does any of the following acts, they stand at risk of being prosecuted for fraudulent insurance claims:



1. Knowingly presents or causes to be presented any false or fraudulent claim for payment of a loss or injury, including payment of a loss or injury under a contract of insurance.

2. Knowingly presents multiple claims for the same loss or injury, including presentation of multiple claims to more than one insurer, with the specific intent to defraud.

3. Knowingly causes or participates in a vehicular collision, or to any other vehicular accident, for the purpose of presenting any false or fraudulent claim.

4. Knowingly presents 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.

5. Knowingly prepares, makes, or subscribes 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. CALJIC 15.40













Worker's Comp Fraud



The definition of worker's compensation claim fraud in California is a simple one: It's illegal to lie to get benefits. A successful prosecution requires proving the lie and the intent to defraud. California Penal Code Section 550(b)(3) states that it is unlawful to:

"Conceal, or knowingly fail to disclose the occurrence of an event that affects any person's initial or continued right or entitlement to any insurance benefit or payment, or the amount of any benefit or payment to which the person is entitled."

Worker's compensation fraud is a felony in the State of California, under the California Insurance Code Section 1871.4. This section states that it is unlawful to file false statements for the purpose of supporting or applying for worker's compensation benefits, including false proof of injury, bill for services, payment for services, hospital or doctor records, x-rays, test results, or medical-legal expenses. The following acts fall under the worker's compensation fraud umbrella:

 Making any knowingly false or fraudulent statements or material misrepresentations for the purpose of obtaining compensation.

 Presenting any knowingly false or fraudulent written or oral material statement in support of any claim for compensation for the purpose of obtaining compensation.

 Knowingly assisting, abetting, conspiring with, or soliciting any person in the above-mentioned acts.

The punishment for worker's comp fraud can be classified as either a misdemeanor or a felony. This type of classification is termed a "wobbler." This means that it may be prosecuted as either a misdemeanor or a felony. A misdemeanor is punishable by up to one year in the county jail. A felony is punishable by imprisonment in the state prison.

Sentencing for worker's comp fraud is either imprisonment in the county jail for one year or in state prison for 2, 3, or 5 years, and/or a fine up to $50,000, or double the value of the fraud, whichever is greater. The 2, 3, or 5 year prison terms are called the low, mid, and high terms. The Legislature has determined that the mid sentence is the most appropriate unless there are mitigating or aggravating circumstances, stated on the court record, which would justify either the lower or higher terms. The existence of any fact that would subject a person to a penalty enhancement shall be alleged in the information or indictment and either admitted by the defendant in open court, or found to be true by the jury trying the issue of guilt or by the court where guilt is established by plea of guilty or nolo contendre or by trial by the court sitting without a jury.

Restitution is also ordered, including any restitution for any medical evaluation or treatment services obtained or provided. The court determines the amount of restitution and the person or persons to whom the restitution must be paid.

If a person had been convicted of fraud before, under Penal Code section 548 or 550, it is a penalty enhancement of two years for each prior conviction in addition to the sentencing required for the current crime.

Welfare Fraud

Welfare fraud occurs when a person either makes a false representation or omits pertinent information when applying for public assistance, in order to receive a benefit they are not otherwise entitled to, such as cash assistance, food stamps, child care, in-home support services and/or general assistance benefits. The types of fraud that most often occur are:

 Failure to report income or money received.

 Failure to report the return of the absent parent to the home.

 Failure to report a child out of the home

 Failure to report property or assets.

 Internal employee fraud

 Duplicate Aid

 Forgery or duplicate warrants

 Receiving Public Assistance Benefits to which they are not entitled.

The punishment for welfare fraud is dependent on the monetary amount of fraud and the type of fraud that was used. The following offenses and punishments are defined in Section 10980 of the Welfare and Institutions Code:



 If a person knowingly makes a false statement or representation, or fails to disclose a material fact in order to obtain aid, is guilty of a misdemeanor, punishable by imprisonment in the county jail up to six months and/or by a fine up to $500.

 If the total amount of the aid obtained or retained is $400 or less it is a misdemeanor, punishable by imprisonment in the county jail for up to six months and/or by a fine up to $500.

 However, if the total amount is above $400, it is a wobbler felony, punished by either imprisonment in the state prison for a period of 16 months, 2 , or 3 years, and/or by a fine up to $5,000 or up to one year in county jail and/or by a fine up to $1,000.

 If a person knowingly makes more than one application for entitlement for any person, or by claiming a false identity for any person is guilty of a wobbler felony, punishable by imprisonment in the state prison for a period of 16 months, 2, or 3 years and/or by a fine up to $5,000.

 If a person knowingly uses, transfers, acquires, or possesses blank authorizations to participate in the federal Food Stamp Program in a non-authorized manner with the intent to defraud is guilty of a felony, punishable by imprisonment in the state prison for a period of 16 months, 2, or 3 years and/or by a fine up to $5,000.

 If any person counterfeits, alters or knowingly uses, transfers, acquires, or possesses counterfeited or altered authorizations to participate in the federal Food Stamp Program or to receive food stamps or electronically transferred benefits in any non-authorized manner is guilty of forgery.

 If any person fraudulently appropriates food stamps, electronically transferred benefits, or authorizations to participate in the federal Food Stamp Program with which he or she has been entrusted pursuant to his or her duties as a public employee is guilty of embezzlement of public funds.








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