Florida´s Division of Investigative and Forensic Services receives approximately 10,000 reports of fraud in the state every year, according to their records. The reason for the proliferation of this type of crime may be (according to The Coalition Against Insurance Fraud) that it is a “low-risk crime”, meaning that there are no guns or any other types of weapons involved. Additionally, it is considered a victimless crime, where the only individual hurt is the insurance company.
What is Insurance Fraud?
Insurance fraud is a white-collar crime, which occurs when an individual intentionally deceives or defrauds an insurance carrier to obtain payment from the insurance company to which they are not legally entitled.
This type of fraud could involve auto, life, property, homeowner, and health insurance, as well as any other type of insurance that protects an individual against damages to themselves, their property, or other assets of value.
Insurance fraud falls into two categories:
- Soft fraud: involves the exaggeration of legitimate insurance claims. For example, claiming that the value of an insured object is higher than it is in reality.
- Hard fraud: involves making a false claim or intentionally causing a destructive event in order to make a claim for property loss. A common example is setting property on fire and making a claim for property loss.
Penalties for Insurance Fraud.
Criminal penalties vary depending on the dollar amount of the claim. Professionals may also face losing their licenses, and the severity of the penalty increases with the increased value of the claim.
- Third-degree felony: occurs when the value of the claim is less than $20,000. It is punishable by up to five years in prison.
- Second-degree felony: occurs when the value is between $20,000 and $99,999, the penalty can be of up to 15 years in prison.
- First-degree felony: If the fraudulent claim involves $100,000 or more, the defendant may face up to 30 years in prison.
In addition to the penalties listed prior, companies may pursue civil litigation. Therefore, defendants who lose these claims may have to pay considerable fines:
- First-time offenders: Up to $5,000 fine.
- Second-time offenders: Between $5,000 and $10,000 fine.
- Third or subsequent offense: Between $10,000 and $15,000.
- For a motor vehicle crash, or a scheme to create false documentation for a crash that didn´t occur, with the intention of filing a tort claim or personal injury protection benefits, the fine can be between $15,000 and $50,000.
If you or a loved one have been arrested on Insurance Fraud or any other charges related to a white-collar crime, seeking out the help of a knowledgeable criminal defense attorney is your best option. Russell Spatz has over four decades of experience in these types of cases and is here to help. Give him a call at 305-442-0200.