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Federal Insurance Fraud Penalties and Misdemeanors

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If you are going to commit any type of insurance fraud, you need to be aware of the penalties and misdemeanors that are associated with such a crime. As with other misdemeanors, Federal insurance fraud is punishable by a fine, jail time, and community service. You can learn more about these penalties and laws by reading this article.

Premium diversion

One of the most common insurance fraud schemes is premium diversion. The scheme occurs when an insurance agent steals the premiums paid by a policyholder and keeps the money for himself.

Premium diversion is a serious offense and can cost an individual hundreds of thousands of dollars. If you suspect that you are being defrauded, contact an experienced criminal defense attorney. They can help you answer questions, respond to investigators, and protect your legal rights.

According to the Federal Bureau of Investigation, there are various ways to commit insurance fraud. The most common are premium diversion and asset diversion.

In both cases, the goal is to divert money to pay for claims. Typically, the scheme involves the creation of phony paperwork. These fake documents are then used to obtain premiums from unwitting consumers.

The FBI estimates that there is a $40 billion industry problem with fraud. That is a significant problem for the insurance industry and the insured.

Hard fraud

The federal law that enables the Department of Justice to prosecute cases of insurance fraud is called the Health Insurance Portability and Accountability Act (HIPAA). HIPAA can result in significant financial penalties, including significant fines, restitution, and imprisonment for individuals accused of fraud.

Insurance fraud is a crime that involves duping an insurer. It can be perpetrated by any party, but the most common forms of fraud involve auto insurance and healthcare.

If you have been contacted by authorities regarding an insurance scam, don’t agree to speak with them. Instead, contact a lawyer.

In the case of an automobile accident, a fraudulent scheme could involve the driver fabricating an injury or filing a false claim. A “recruited” doctor might diagnose soft-tissue injuries and file a claim.

Hard fraud is an intentional, premeditated act. Some examples of hard fraud include falsifying the facts of a claim, staged motor vehicle collisions, feigned injuries, and faking robbery.

Misdemeanors

Federal insurance fraud misdemeanors are crimes that can carry penalties of up to 10 years in federal prison. This penalty depends on the facts of the case and the section of federal law involved. The statute of limitations may also be extended in some cases.

A person is guilty of this crime if he or she willfully makes a false statement, knowing that it could affect the outcome of an insurance matter. He or she is also guilty if he or she conceals material information or otherwise defrauds another person.

In addition to prison time, a person who is convicted of this crime may face fines. The amount he or she can be liable for can range from a few hundred dollars to several thousand. For a second violation, the monetary penalties can be as much as five thousand dollars.

Depending on the crime, the amount of money stolen can determine the type of penalty a defendant will face. If the property he or she stole is worth more than five thousand dollars, the charge will be a class E felony.

Penalties

Insurance fraud is a serious offense that can lead to federal or state charges. It involves deceiving an insurer about the amount of insurance coverage, making false claims, or refusing to provide a benefit. Fraud in the insurance industry can be misdemeanor or felony, depending on the facts of the case.

Most states have insurance fraud bureaus that can assist in detecting and investigating fraud. These agencies also share information with law enforcement. If you have been accused of fraud, it is important to consult an experienced attorney. A lawyer can minimize your criminal liability and help you with the appeal process.

Federal penalties for insurance fraud include fines, restitution, and incarceration. In addition, an individual may lose his or her professional license. This can affect future earning opportunities.

The maximum penalty for insurance fraud is 15 years in prison. However, it increases with the amount of money fraudulently obtained. For example, a business owner who sets his or her own business on fire is guilty of property insurance fraud.

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