California Auto Insurance Fraud Laws
Penal Code 548-551 PC

The term “auto insurance fraud” refers to any incidence of California criminal fraud that involves car insurance.

Under the California Penal Code, you commit auto insurance fraud when you do any of the following:

  • Damage, hide, or abandon your vehicle on purpose, with the intent to collect car insurance proceeds for it;1
  • Knowingly submit a fraudulent auto insurance claim for a loss due to damage, destruction, or theft of a vehicle;2
  • Knowingly present two (2) or more auto insurance claims for the same loss, with intent to defraud;3
  • Cause or participate in an automobile accident with intent to fraudulently collect the auto insurance proceeds;4 and/or
  • Knowingly present or prepare any written or oral statement as part of an insurance claim that contains false or misleading information, or falsely claim that you live in California on an application for auto insurance.5
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Deliberately damaging your car to collect insurance proceeds is one form of auto insurance fraud.

It is also a form of criminal auto insurance fraud for:

  • A business owner or employee to solicit, refer, or accept any business from a person, knowing that s/he intends to commit auto insurance fraud;6 and
  • An owner or employee of an auto repair shop to offer insurance agents or adjusters a commission or profit-sharing arrangement (a “kickback”) to refer policyholders to their shop (this offense overlaps with commercial bribery in California).7

Examples

Here are several examples of activities that could lead to California car insurance fraud charges:

  • A man abandons his car in a remote location, with plans to report it as stolen and collect the insurance proceeds.
  • After a minor fender-bender that causes no damage to her SUV, a woman submits a claim to her insurance company claiming that scratches the car has had for a while were the result of the accident.
  • As part of a vehicle insurance fraud conspiracy, the owner of an auto repair shop regularly produces inflated estimates of vehicle repair costs.

Penalties

Most forms of California auto insurance fraud are felonies in California law.8

But a few kinds of auto insurance fraud—such as preparing or submitting false statements, or the forms that are committed by business or auto shop representatives—are California wobblers, which means they may be charged as either misdemeanors or felonies.9

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California law imposes harsh penalties for all forms of insurance fraud, including automobile insurance fraud.

The potential felony prison sentences for vehicle insurance fraud range from sixteen (16) months to five (5) years. Felony fines can go up to fifty thousand dollars ($50,000) or twice the amount of the fraud (whichever is greater).10

Auto insurance fraud as a misdemeanor carries a potential county jail sentence of up to one (1) year, and/or a fine of up to one thousand dollars ($1,000).11

Legal defenses

If you are charged with auto insurance fraud in California, you may be able to get the charges reduced or dismissed by arguing one of the following common legal defenses:

  • You did not act with fraudulent intent (a useful defense to any kind of insurance fraud charges); and/or
  • There is insufficient evidence to support the charges.

In this article, our California criminal and fraud defense attorneys12 explain the following:

1. Legal Definition of California Auto Insurance Fraud

1.1. Penal Code 548 PC damaging or abandoning vehicle
1.2. Penal Code 550 PC fraudulent claims
1.3. Penal Code 550 PC multiple claims
1.4. Penal Code 550 PC causing an accident
1.5. Penal Code 550 PC false statements
1.6. Auto insurance fraud by business owners or employees

2. Penalties for Auto Insurance Fraud in California

3. Legal Defenses to California Car Insurance Fraud

4. Auto Insurance Fraud and Related Offenses

4.1. Penal Code 451 PC arson
4.2. California health care fraud

If, after reading this article, you would like more information, we invite you to contact us at Shouse Law Group.

1. Legal Definition of California Auto Insurance Fraud

The legal definition of vehicle insurance fraud in California depends on which section of the California Penal Code you are alleged to have violated.

In this section, we will discuss the major forms of California auto insurance fraud.

1.1. Penal Code 548 PC damaging or abandoning vehicle

California Penal Code 548 makes it a crime to do the following:

  1. Injure, destroy, hide, abandon or dispose of a car or other motor vehicle that is insured against loss or damage;
  2. With the intent to defraud or prejudice the insurance company.13

“Intent to defraud” means intent to deceive the insurance company so as to cause them a loss of money, or else to cause damage to their legal, financial or property rights.14

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Deliberately damaging or hiding a vehicle is one form of vehicle insurance fraud.

You can be guilty of auto insurance fraud through injuring, destroying or hiding/abandoning a car even if the insurance company never loses money because of your actions—and even if the car is not yours.15

Example: Hilary's husband Scott has been out of work for some time. Their household is struggling to pay its bills.

Scott owns a fairly expensive car that is titled in his name. One night when that car is parked on the street, Hilary sneaks outside while Scott is sleeping and spray-paints the car.

Her plan is to pretend that they have been victims of vandalism so they can collect on their car insurance for the damage.

But when Scott wakes up and calls the police to report the damage, Hilary breaks down. She confesses what she did to the police.

No insurance claim was ever filed, so Hilary and Scott's insurance company will not lose any money because of her actions. Still, Hilary is guilty of auto insurance fraud under PC 548.

1.2. Penal Code 550 PC fraudulent claims

California Penal Code 550 covers several different forms of California car insurance fraud.

One of these is Penal Code 550(a)(4) presenting a false or fraudulent claim for theft, destruction, damage or conversion of a motor vehicle.16

The legal definition of this form of auto insurance fraud is:

  1. You falsely or fraudulently claimed payment for a loss due to theft, destruction, damage, or conversion of a motor vehicle, a motor vehicle part, or the contents of a motor vehicle;
  2. You knew that the claim was false or fraudulent; and
  3. When you submitted the claim, you intended to defraud.17

As with Penal Code 548 damaging or abandoning a vehicle, it is not necessary that anyone actually suffer a financial loss because of what you did.18

Example: Raul's car has a dent in its rear bumper from a time when Raul accidentally backed his car into his wife's in their driveway. Raul has never fixed the damage because he didn't consider it worth the money.

Then one day Raul is rear-ended by another driver. Raul, thinking fast, decides that he will try to blame the dent on the other driver.

At the scene of the accident, he gets the other driver's insurance info. He then submits a claim with his own insurance company in which he states that there was no preexisting damage to his car.

Raul is guilty of submitting a false/fraudulent claim under Penal Code 550 PC.

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Auto insurance companies are always on the lookout for false or fraudulent claims.

But it is important to note that you need to have known the claim was false or fraudulent in order to be guilty of this form of auto insurance fraud.19

Example: Teresa's car has acquired several scratches on its rear bumper due to bad parallel parking jobs. But she doesn't look at that part of her car very often and is not aware that they are there.

One day Teresa is rear-ended while driving home from work. She and the other driver get out to inspect their cars. Teresa notices the scratches for the first time and assumes that they are from the accident.

Teresa then submits a claim for the scratches to her insurance company, stating that they were caused by the accident.

Teresa is not guilty of automobile insurance fraud because she did not know her claim was false.

1.3. Penal Code 550 PC multiple claims

Another way of violating California car insurance fraud laws is to:

  1. Present two (2) or more claims for the same loss to the same or several different auto insurers;
  2. Knowing that you are submitting two (2) or more claims for the same loss;
  3. With intent to defraud.20

The “multiple claims” form of auto insurance fraud is covered in Penal Code 550(a)(4).21

1.4. Penal Code 550 PC causing an accident

You violate California Penal Code 550(a)(3) PC if you:

  1. Cause or participate in a vehicle accident;
  2. Knowing that the purpose of the accident is to present a false or fraudulent insurance claim;
  3. With the intent to defraud.22

You are considered to have committed auto insurance fraud by “causing” an accident if both of the following are true:

  1. The accident was the direct, natural and probable consequence of your act; and
  2. The accident would not have happened without your act.23
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You can violate California auto insurance laws by deliberately causing an accident to collect on the insurance.

Example: Greg's sports car has been requiring a lot of repairs. He realizes that it would probably be financially beneficial for him if he could collect the insurance on it and use it to buy a car that needs less maintenance.

So Greg enlists his friend Patrick to help him make this happen by causing an accident. Patrick owns a large pickup truck that could hit Greg's car without sustaining any damage.

Greg parks his car on the street in front of his house. Patrick takes the license plates off his truck at Greg's house (so he won't get accused of misdemeanor hit and run), drives his truck around the block in Greg's neighborhood, and then crashes it into Greg's car and speeds away.

Both Greg and Patrick are guilty of causing an accident as a form of auto insurance fraud.

1.5. Penal Code 550 PC false statements

You can also violate California Penal Code 550, subsections (b)(1)-(4), by doing any of the following:

  1. Presenting any written or oral statement as part of or in opposition to a claim for an auto insurance payment or other benefit, knowing that the statement contains false or misleading information concerning any material fact;
  2. Preparing or making any written or oral statement as part of or in opposition to a claim for an auto insurance payment or other benefit, knowing that the statement contains false or misleading information concerning any material fact; or
  3. Preparing or making any oral or written statement, intended to be presented to an auto insurer for purposes of obtaining car insurance, that you reside in California, when really you reside somewhere else.24

Example: Eloise, who had been living in Marin County, gets divorced and moves to Florida.

She prices car insurance in her new home and discovers that her premium will go up by a significant amount because of the risk of damage from hurricanes.

So Eloise tells her insurance company that she still resides mostly at her old house in Marin. Her ex-husband passes on mail from the company to her.

Eloise is guilty of auto insurance fraud for falsely claiming to reside in California.

1.6. Auto insurance fraud by business owners or employees

There are several ways in which the owners, representatives or employees of auto-related businesses can violate California's auto insurance laws—and thereby subject themselves to criminal liability.

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Owners and employees of certain kinds of businesses need to be careful about violating California auto insurance fraud laws.

These include:

  1. Any type of business soliciting, accepting or referring any business to or from any person or entity with the knowledge that, or with reckless disregard for whether, that person or entity intends to commit auto insurance fraud;25 and
  2. An auto repair shop offering a commission, fee, profit-sharing, or other form of compensation to an insurance agent, broker, or adjuster, in exchange for referring policyholders to shop for repairs covered by auto insurance.26

Example: Harry has just opened his own auto repair shop. His sister-in-law Phyllis owns a car insurance brokerage firm.

Harry tells Phyllis that, if she will refer her policyholders who live near his shop to him for repairs covered by insurance, he will give her 30% of the profits he makes off of that business. Phyllis agrees.

Harry is guilty of auto insurance fraud for offering Phyllis the profit-sharing from insurance customers.

2. Penalties for Auto Insurance Fraud in California

The penalties for California auto insurance fraud depend on the form of fraud you are alleged to have committed.

PC 548 damaging or abandoning vehicle

Penal Code 548 damaging, destroying, hiding or abandoning an insured vehicle with intent to defraud the insurance company is a California felony.27

The potential penalties are:

  • Felony (formal) probation;
  • Two (2), three (3) or five (5) years in jail; and/or
  • A fine of up to fifty thousand dollars ($50,000).28

There is also a two (2)-year sentence enhancement for each prior felony conviction for auto insurance fraud under Penal Code 548 or 550.29

PC 550 fraudulent claims/multiple claims

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Most California auto insurance fraud offenses are felonies.

Both submitting a false or fraudulent claim under Penal Code 550(a)(4) PC, and submitting multiple claims under Penal Code 550(a)(2), are felonies. These offenses carry the following penalties:

  • Felony (formal) probation;
  • Two (2), three (3) or five (5) years in jail; and/or
  • A fine of up to fifty thousand dollars ($50,000) OR double the amount of the fraud, whichever is greater.30

There is also a two (2)-year sentence enhancement for each prior felony conviction for auto insurance fraud under Penal Code 548 or 550. And if you have a prior felony conviction for auto insurance fraud, you may not receive probation or a suspended sentence.31

PC 550 causing an accident

Auto insurance fraud by causing an accident, Penal Code 550(a)(3) PC, is another felony. It is punishable by:

  • Felony (formal) probation;
  • Two (2), three (3) or five (5) years in jail; and/or
  • A fine of up to fifty thousand dollars ($50,000) OR double the amount of the fraud, whichever is greater.32

And the following sentencing enhancements apply to this form of auto insurance fraud:

  • A two (2)-year sentence enhancement for each prior felony conviction for auto insurance fraud under Penal Code 548 or 550;
  • A five (5)-year sentence enhancement if you have two (2) or more prior felony convictions for car insurance fraud by causing an accident under PC 550(a)(3);
  • A two (2)-year sentence enhancement for each person other than an accomplice who suffers serious bodily injury as the result of your actions;33 and
  • A potential sentence enhancement of three (3) or more years if you personally inflict great bodily injury on someone in the course of causing the accident.34

PC 550 false statements

Making false statements under Penal Code 550(b)(1)-(4) is a wobbler in California law.35

This means that the prosecutor may choose to charge these auto insurance fraud crimes as felonies or misdemeanors, depending on:

  • The alleged details of the crime; and
  • The defendant's criminal history.

The felony penalties for false statements are the same as the penalties for filing a fraudulent claim under PC 550(a)(4), or filing multiple claims under PC 550(a)(2).36

But if false statements car insurance fraud is charged as a misdemeanor, the potential penalties are:

PC 549 referring, soliciting or accepting auto insurance fraud business

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Making false statements in connection with a car insurance claim is a wobbler.

Referring, soliciting or accepting business from someone who intends to commit auto insurance fraud, under Penal Code 549, is also a wobbler.38

The potential felony penalties for this form of car insurance fraud are:

  • Felony (formal) probation;
  • Sixteen (16) months, two (2) years or three (3) years in jail; and/or
  • A fine of up to fifty thousand dollars ($50,000) OR double the amount of the fraud, whichever is greater.39

The potential misdemeanor penalties are:

  • Misdemeanor (summary) probation;
  • Up to one (1) year in county jail; and/or
  • A fine of up to one thousand dollars ($1,000).40

A second or subsequent conviction for a violation of this California car insurance law will always be a felony and will carry the felony penalties set forth above.41

PC 551 kickbacks from auto repair shops

Finally, the form of auto insurance fraud consisting of kickbacks from vehicle repair shops to insurance agents, brokers or adjusters carries different penalties depending on the amounts of money involved.

If the amount of the kickback is nine hundred fifty dollars ($950) or less, Penal Code 551 PC is a misdemeanor, carrying a potential county jail sentence of up to six (6) months and/or a fine of up to one thousand dollars ($1,000).42

If the amounts in question are more than nine hundred fifty dollars ($950), then this form of vehicle insurance fraud becomes a wobbler.

If it is charged as a misdemeanor with more than $950 at issue, the potential penalties are a county jail sentence of up to one (1) year, and/or a fine of up to one thousand dollars ($1,000).43

Charged as a felony, it carries a jail sentence of sixteen (16) months, two (2) or three (3) years; and/or a fine of up to ten thousand dollars ($10,000).44

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The penalties for auto repair shop insurance kickbacks depend on the amounts of money involved.
3. Legal Defenses to California Car Insurance Fraud

California prosecutors work hard to investigate and prosecute cases of auto insurance fraud, for a few reasons.

First, car insurance fraud is apparently a big problem, both in California and throughout America.

Some industry groups estimate that at least ten percent (10%) of property/casualty auto insurance claims are fraudulent.45 The LA County District Attorney's office has a separate Automobile Insurance Fraud Division for handling these cases.

Second, insurance companies have plenty of political power—and it is in their interest for law enforcement to crack down on auto insurance fraud. In California, the Department of Insurance works closely with local prosecutors to see that suspected fraud is dealt with aggressively.

But according to Los Angeles insurance fraud defense attorney Neil Shouse46:

“There is a fine line between aggressive law enforcement and abusive law enforcement. California law enforcement's ‘get tough' approach to auto insurance fraud can lead to shoddy investigations, rushed judgments and overzealous prosecutions. Prosecutors who work in specialized vehicle insurance fraud divisions need to justify their positions—which can cause them to focus more on generating arrest and conviction statistics than on making sure justice is served.”

If you are charged with California insurance fraud, you and your criminal defense attorney may want to consider the following legal defenses:

You did not act with fraudulent intent

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Intent to defraud can be difficult to prove in auto insurance fraud cases.

Specific intent to defraud is a key element of all forms of auto insurance fraud.

Many times a careless mistake on your part will be flagged as potential fraud by your auto insurance company—and reported to the authorities.

But the burden is on the prosecution to prove, beyond a reasonable doubt, that you intended to commit fraud and were not simply making a mistake. A skilled criminal defense attorney may be able to cast enough doubt on this assertion to lead to charges being dropped—or a not-guilty verdict in a jury trial.

There is insufficient evidence that you committed auto insurance fraud

Many auto insurance cases revolve around a complicated set of facts. It can be challenging to sort out beyond a reasonable doubt what really happened—particularly if there are convoluted paper trails, circumstantial evidence, or conflicting testimony involved.

It is a good criminal defense attorney's job to find the ambiguities in the prosecution's case—and to help you collect the strongest evidence for your innocence.

4. Auto Insurance Fraud and Related Offenses

The most closely related offenses to California auto insurance fraud include:

4.1. Penal Code 451 PC arson
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Setting a car on fire to collect insurance proceeds is a form of California arson.

Penal Code 451 PC California arson occurs when someone sets a fire “willfully and maliciously.”47

If you set your own car on fire with the intent to fraudulently collect auto insurance proceeds, you are guilty of the felony crime of arson, punishable by sixteen (16) months, two (2) years or three (3) years in California state prison.48

Arson under these circumstances can also lead to a fine of fifty thousand dollars ($50,000) or double the amount of the anticipated monetary gain from the auto insurance fraud.49

4.2. California health care fraud

California health care fraud occurs when, for example:

  • Someone bills an insurance company for medical services they never actually received;
  • Someone bills an insurance company for more expensive medical services than the ones they actually received; or
  • Someone submits multiple insurance claims for the same medical services.

Penal Code 550 PC prohibits forms of health care fraud that are analogous to the forms of auto insurance fraud addressed by that statute. The penalties are also similar.50

A car accident—real or fraudulent—may lead to charges of both auto insurance fraud and health insurance fraud, if a person submits fraudulent or multiple claims both for property damage to the car and for medical expenses.

Call us for help…

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For questions about California's auto insurance fraud laws, or to discuss your case confidentially with one of our California criminal defense attorneys, do not hesitate to contact us at Shouse Law Group.

We have local criminal law offices in and around Los Angeles, San Diego, Orange County, Riverside, San Bernardino, Ventura, San Jose, Oakland, the San Francisco Bay area, and several nearby cities.

For more information on Nevada automobile insurance fraud laws, please visit our page on Nevada automobile insurance fraud laws.

In addition, you may also find helpful information in our related articles on California Criminal Fraud Laws; The Crime of Bribery in California; California Criminal Conspiracy Laws Penal Code 182 PC; Legal Definition of Felonies in California Law; Legal Definition of California Wobblers; Legal Definition of California Misdemeanors; Common Legal Defenses to California Crimes; California Insurance Fraud Defense; California Vandalism Laws Penal Code 594 PC; Misdemeanor Hit and Run Vehicle Code 20002 VC; Felony (Formal) Probation in California; Legal Definition of Great Bodily Injury/Harm; Misdemeanor (Summary) Probation in California; California Criminal Jury Trials; Definition of Circumstantial Evidence in California; Penal Code 451 PC California Arson Laws; and California Health Care Fraud.

Additional Resources:

California Department of Insurance: What is Insurance Fraud?

Legal References:


1 Penal Code 548 PC – Defrauding or prejudicing insurer; punishment [form of auto insurance fraud]. (“(a) Every person who willfully injures, destroys, secretes, abandons, or disposes of any property which at the time is insured against loss or damage by theft, or embezzlement, or any casualty with intent to defraud or prejudice the insurer, whether the property is the property or in the possession of that person or any other person, is punishable by imprisonment pursuant to subdivision (h) of Section 1170 for two, three, or five years and by a fine not exceeding fifty thousand dollars ($50, 000). For purposes of this section, “casualty” does not include fire. (b) Any person who violates subdivision (a) and who has a prior conviction of the offense set forth in that subdivision, in Section 550 of this code, or in former Section 556 or former Section 1871.1 of the Insurance Code, shall receive a two-year enhancement for each prior conviction in addition to the sentence provided under subdivision (a). The existence of any fact which 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 contendere or by trial by the court sitting without a jury.”)

2 Penal Code 550 PC – False or fraudulent claims or statements; prohibited acts [form of auto insurance fraud]. (“(a) It is unlawful to do any of the following, or to aid, abet, solicit, or conspire with any person to do any of the following: (1) Knowingly present or cause to be presented any false or fraudulent claim for the payment of a loss or injury, including payment of a loss or injury under a contract of insurance. . . . (4) Knowingly present 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. . . . (c)(1) Every person who violates paragraph (1), (2), (3), (4), or (5) of subdivision (a) is guilty of a felony punishable by imprisonment pursuant to subdivision (h) of Section 1170 for two, three, or five years, and by a fine not exceeding fifty thousand dollars ($50,000), or double the amount of the fraud, whichever is greater. . . . (e) Except as otherwise provided in subdivision (f), any person who violates subdivision (a) or (b) and who has a prior felony conviction of an offense set forth in either subdivision (a) or (b), in Section 548, in Section 1871.4 of the Insurance Code, in former Section 556 of the Insurance Code, or in former Section 1871.1 of the Insurance Code shall receive a two-year enhancement for each prior felony conviction in addition to the sentence provided in subdivision (c). 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 contendere or by trial by the court sitting without a jury. Any person who violates this section shall be subject to appropriate orders of restitution pursuant to Section 13967 of the Government Code.”)

3 Penal Code 550 PC – False or fraudulent [multiple] claims or statements; prohibited acts [form of auto insurance fraud]. (“(a) It is unlawful to do any of the following, or to aid, abet, solicit, or conspire with any person to do any of the following: . . . (2) Knowingly present multiple claims for the same loss or injury, including presentation of multiple claims to more than one insurer, with an intent to defraud. . . . (c)(1) Every person who violates paragraph (1), (2), (3), (4), or (5) of subdivision (a) is guilty of a felony punishable by imprisonment pursuant to subdivision (h) of Section 1170 for two, three, or five years, and by a fine not exceeding fifty thousand dollars ($50,000), or double the amount of the fraud, whichever is greater. . . . (e) Except as otherwise provided in subdivision (f), any person who violates subdivision (a) or (b) and who has a prior felony conviction of an offense set forth in either subdivision (a) or (b), in Section 548, in Section 1871.4 of the Insurance Code, in former Section 556 of the Insurance Code, or in former Section 1871.1 of the Insurance Code shall receive a two-year enhancement for each prior felony conviction in addition to the sentence provided in subdivision (c). 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 contendere or by trial by the court sitting without a jury. Any person who violates this section shall be subject to appropriate orders of restitution pursuant to Section 13967 of the Government Code.”)

4 Penal Code 550 PC – False or fraudulent claims or statements; prohibited acts [deliberately causing an accident – form of auto insurance fraud]. (“(a) It is unlawful to do any of the following, or to aid, abet, solicit, or conspire with any person to do any of the following: . . . (3) Knowingly cause or participate in a vehicular collision, or any other vehicular accident, for the purpose of presenting any false or fraudulent claim. . . . . (c)(1) Every person who violates paragraph (1), (2), (3), (4), or (5) of subdivision (a) is guilty of a felony punishable by imprisonment pursuant to subdivision (h) of Section 1170 for two, three, or five years, and by a fine not exceeding fifty thousand dollars ($50,000), or double the amount of the fraud, whichever is greater. . . . (e) Except as otherwise provided in subdivision (f), any person who violates subdivision (a) or (b) and who has a prior felony conviction of an offense set forth in either subdivision (a) or (b), in Section 548, in Section 1871.4 of the Insurance Code, in former Section 556 of the Insurance Code, or in former Section 1871.1 of the Insurance Code shall receive a two-year enhancement for each prior felony conviction in addition to the sentence provided in subdivision (c). 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 contendere or by trial by the court sitting without a jury. Any person who violates this section shall be subject to appropriate orders of restitution pursuant to Section 13967 of the Government Code. (f) Any person who violates paragraph (3) of subdivision (a) and who has two prior felony convictions for a violation of paragraph (3) of subdivision (a) shall receive a five-year enhancement in addition to the sentence provided in subdivision (c). 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 contendere or by trial by the court sitting without a jury. (g) Except as otherwise provided in Section 12022.7, any person who violates paragraph (3) of subdivision (a) shall receive a two-year enhancement for each person other than an accomplice who suffers serious bodily injury resulting from the vehicular collision or accident in a violation of paragraph (3) of subdivision (a).”)

5 Penal Code 550 PC – False or fraudulent claims or statements; prohibited acts [false or misleading statements – form of auto insurance fraud]. (“(b) It is unlawful to do, or to knowingly assist or conspire with any person to do, any of the following: (1) Present or cause to be presented any written or oral statement as part of, or in support of or opposition to, a claim for payment or other benefit pursuant to an insurance policy, knowing that the statement contains any false or misleading information concerning any material fact. (2) Prepare or make any written or oral statement that is intended to be presented to any insurer or any insurance claimant in connection with, or in support of or opposition to, any claim or payment or other benefit pursuant to an insurance policy, knowing that the statement contains any false or misleading information concerning any material fact. . . . (4) Prepare or make any written or oral statement, intended to be presented to any insurer or producer for the purpose of obtaining a motor vehicle insurance policy, that the person to be the insured resides or is domiciled in this state when, in fact, that person resides or is domiciled in a state other than this state. . . . (c)(3) Every person who violates paragraph (1), (2), (3), or (4) of subdivision (b) shall be punished by imprisonment pursuant to subdivision (h) of Section 1170 for two, three, or five years, or by a fine not exceeding fifty thousand dollars ($50,000) or double the amount of the fraud, whichever is greater, or by both that imprisonment and fine, or by imprisonment in a county jail not to exceed one year, or by a fine of not more than ten thousand dollars ($10,000), or by both that imprisonment and fine. . . . (e) Except as otherwise provided in subdivision (f), any person who violates subdivision (a) or (b) and who has a prior felony conviction of an offense set forth in either subdivision (a) or (b), in Section 548, in Section 1871.4 of the Insurance Code, in former Section 556 of the Insurance Code, or in former Section 1871.1 of the Insurance Code shall receive a two-year enhancement for each prior felony conviction in addition to the sentence provided in subdivision (c). 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 contendere or by trial by the court sitting without a jury. Any person who violates this section shall be subject to appropriate orders of restitution pursuant to Section 13967 of the Government Code.”)

6 Penal Code 549 PC – False or fraudulent claims against insurers; solicitation, acceptance or referral of business; penalties and restitution [form of auto insurance fraud]. (“Any firm, corporation, partnership, or association, or any person acting in his or her individual capacity, or in his or her capacity as a public or private employee, who solicits, accepts, or refers any business to or from any individual or entity with the knowledge that, or with reckless disregard for whether, the individual or entity for or from whom the solicitation or referral is made, or the individual or entity who is solicited or referred, intends to violate Section 550 of this code or Section 1871.4 of the Insurance Code is guilty of a crime, punishable upon a first conviction by imprisonment in the county jail for not more than one year or by imprisonment pursuant to subdivision (h) of Section 1170 for 16 months, two years, or three years, or by a fine not exceeding fifty thousand dollars ($50,000) or double the amount of the fraud, whichever is greater, or by both that imprisonment and fine. A second or subsequent conviction is punishable by imprisonment pursuant to subdivision (h) of Section 1170 or by that imprisonment and a fine of fifty thousand dollars ($50,000). Restitution shall be ordered, including restitution for any medical evaluation or treatment services obtained or provided. The court shall determine the amount of restitution and the person or persons to whom the restitution shall be paid.”)

7 Penal Code 551 PC – Automotive repair dealers; fraudulent acts [form of car insurance fraud]. (“(a) It is unlawful for any automotive repair dealer, contractor, or employees or agents thereof to offer to any insurance agent, broker, or adjuster any fee, commission, profit sharing, or other form of direct or indirect consideration for referring an insured to an automotive repair dealer or its employees or agents for vehicle repairs covered under a policyholder's automobile physical damage or automobile collision coverage, or to a contractor or its employees or agents for repairs to or replacement of a structure covered by a residential or commercial insurance policy. (b) Except in cases in which the amount of the repair or replacement claim has been determined by the insurer and the repair or replacement services are performed in accordance with that determination or in accordance with provided estimates that are accepted by the insurer, it is unlawful for any automotive repair dealer, contractor, or employees or agents thereof to knowingly offer or give any discount intended to offset a deductible required by a policy of insurance covering repairs to or replacement of a motor vehicle or residential or commercial structure. This subdivision does not prohibit an advertisement for repair or replacement services at a discount as long as the amount of the repair or replacement claim has been determined by the insurer and the repair or replacement services are performed in accordance with that determination or in accordance with provided estimates that are accepted by the insurer. (c) A violation of this section is a public offense. Where the amount at issue exceeds nine hundred fifty dollars ($950), the offense is punishable by imprisonment pursuant to subdivision (h) of Section 1170 for 16 months, or two or three years, by a fine of not more than ten thousand dollars ($10,000), or by both that imprisonment and fine; or by imprisonment in a county jail not to exceed one year, by a fine of not more than one thousand dollars ($1,000), or by both that imprisonment and fine. In all other cases, the offense is punishable by imprisonment in a county jail not to exceed six months, by a fine of not more than one thousand dollars ($1,000), or by both that imprisonment and fine. (d) Every person who, having been convicted of subdivision (a) or (b), or Section 7027.3 or former Section 9884.75 of the Business and Professions Code and having served a term therefor in any penal institution or having been imprisoned therein as a condition of probation for that offense, is subsequently convicted of subdivision (a) or (b), upon a subsequent conviction of one of those offenses, shall be punished by imprisonment pursuant to subdivision (h) of Section 1170 for 16 months, or two or three years, by a fine of not more than ten thousand dollars ($10,000), or by both that imprisonment and fine; or by imprisonment in a county jail not to exceed one year, by a fine of not more than one thousand dollars ($1,000), or by both that imprisonment and fine. (e) For purposes of this section: (1) “Automotive repair dealer” means a person who, for compensation, engages in the business of repairing or diagnosing malfunctions of motor vehicles. (2) “Contractor” has the same meaning as set forth in Section 7026 of the Business and Professions Code.”)

8 See endnotes 1-4, above.

9 See endnotes 5-7, above.

10 See endnotes 1-4, above.

11 See endnotes 5-7, above.

12 Our California criminal defense attorneys have local Los Angeles law offices in Beverly Hills, Burbank, Glendale, Lancaster, Long Beach, Los Angeles, Pasadena, Pomona, Torrance, Van Nuys, West Covina, and Whittier. We have additional law offices conveniently located throughout the state in Orange County, San Diego, Riverside, San Bernardino, Ventura, San Jose, Oakland, the San Francisco Bay area, and several nearby cities.

13 Judicial Council of California Criminal Jury Instruction (“CALCRIM”) 2004 – [Auto] Insurance Fraud: Destruction of Insured Property (Pen. Code, § 548(a)). (“The defendant is charged [in Count ] with (injuring[,]/ [or] destroying[,]/ [or] hiding[,]/ [or] abandoning[,]/ [or] disposing of) insured property with intent to defraud [in violation of Penal Code section 548(a)]. To prove that the defendant is guilty of this crime, the People must prove that: 1 The defendant (injured[,]/ [or] destroyed[,]/ [or] hid[,]/ [or] abandoned[,]/ [or] disposed of) property that was insured against loss or damage from (theft[,]/ [or] embezzlement[,]/ [or] any casualty other than fire); AND 2 When the defendant did that act, (he/she) intended to (defraud/ [or] prejudice) the insurer. Someone intends to defraud if he or she intends to deceive another person either to cause a loss of (money[,]/ [or] goods[,]/ [or] services[,]/ [or] something [else] of value), or to cause damage to, a legal, financial, or property right. [For the purpose of this instruction, a person includes (a governmental agency/a corporation/a business/an association/the body politic).] [It is not necessary that anyone actually be defrauded or actually suffer a financial, legal, or property loss as a result of the defendant's acts.] [It does not matter whether the defendant or someone else owned or possessed the property.]”)

14 Same.

15 Same.

16 Penal Code 550 PC – False or fraudulent claims or statements; prohibited acts [form of auto insurance fraud], endnote 2, above.

17 CALCRIM 2000 – Insurance Fraud: Fraudulent Claims (Pen. Code, § 550(a)(1), (4)-(7) & (9)). (“The defendant is charged [in Count ] with insurance fraud committed by fraudulent claim [in violation of Penal Code section 550(a)]. To prove that the defendant is guilty of this crime, the People must prove that: . . . <Alternative 1B—presented fraudulent claim for vehicle theft or damage> [1 The defendant falsely or fraudulently claimed payment for a loss due to (theft[,]/ [or] destruction[,]/ [or] damage[,]/ [or] conversion) of (a motor vehicle[,]/ [or] a motor vehicle part[,]/ [or] contents of a motor vehicle);] . . . 2 The defendant knew that the claim was false or fraudulent; AND 3 When the defendant did that act, (he/she) intended to defraud. Someone intends to defraud if he or she intends to deceive another person either to cause a loss of (money[,]/ [or] goods[,]/ [or] services[,]/ [or] something [else] of value), or to cause damage to, a legal, financial, or property right. [For the purpose of this instruction, a person includes (a governmental agency/a corporation/a business/an association/the body politic).] [It is not necessary that anyone actually be defrauded or actually suffer a financial, legal, or property loss as a result of the defendant's acts.] A person claims, makes, or presents a claim for payment by requesting payment under a contract of insurance for (a/an) ((loss/ [or] injury)/health-care benefit).”)

18 Same.

19 Same.

20 CALCRIM 2001 – Insurance Fraud: Multiple Claims (Pen. Code, § 550(a)(2) & (8)). (“The defendant is charged [in Count ] with submitting multiple insurance claims with intent to defraud [in violation of Penal Code section 550(a)]. To prove that the defendant is guilty of this crime, the People must prove that: 1 The defendant presented two or more claims for (the same (loss/ [or] injury)/payment of the same health-care benefit) to (the same/ [or] more than one) insurer; 2 The defendant knew that (he/she) was submitting two or more claims for the same ((loss/ [or] injury)/health-care benefit); AND 3 When the defendant presented the claims, (he/she) intended to defraud. Someone intends to defraud if he or she intends to deceive another person either to cause a loss of (money[,]/ [or] goods[,]/ [or] services[,]/ [or] something [else] of value), or to cause damage to, a legal, financial, or property right. [For the purpose of this instruction, a person includes (a governmental agency/a corporation/a business/an association/the body politic).] [It is not necessary that anyone actually be defrauded or actually suffer a financial, legal, or property loss as a result of the defendant's acts.] A person presents a claim for payment by demanding payment under a contract of insurance for (a/an) ((loss/ [or] injury)/ health-care benefit).”)

21 Penal Code 550 PC – False or fraudulent [multiple] claims or statements; prohibited acts [form of auto insurance fraud], endnote 3, above.

22 Penal Code 550 PC – False or fraudulent claims or statements; prohibited acts [deliberately causing an accident – form of auto insurance fraud], endnote 4, above.

CALCRIM 2002 – Insurance Fraud: Vehicle Accident (Pen. Code, § 550(a)(3)) (“The defendant is charged [in Count ] with insurance fraud in connection with a vehicle accident [in violation of Penal Code section 550(a)(3)]. To prove that the defendant is guilty of this crime, the People must prove that: 1 The defendant caused or participated in a vehicle accident; 2 The defendant knew that the purpose of the accident was to present a false or fraudulent insurance claim; AND 3 When the defendant caused or participated in the accident, (he/she) intended to defraud. Someone intends to defraud if he or she intends to deceive another person either to cause a loss of (money[,]/ [or] goods[,]/ [or] services[,]/ [or] something [else] of value), or to cause damage to, a legal, financial, or property right. [For the purpose of this instruction, a person includes (a governmental agency/a corporation/a business/an association/the body politic).] [It is not necessary that anyone actually be defrauded or actually suffer a financial, legal, or property loss as a result of the defendant's acts.] A person presents a claim by demanding payment under a contract of insurance for (a/an) ((loss/ [or] injury)/health-care benefit). [A person causes an accident if the accident is the direct, natural, and probable consequence of the person's action and the accident would not have happened without the act. A natural and probable consequence is one that a reasonable person would know is likely to happen if nothing unusual intervenes. In deciding whether a consequence is natural and probable, consider all the circumstances established by the evidence.] [There may be more than one cause of an accident. An act causes an accident only if it is a substantial factor in causing the accident. A substantial factor is more than a trivial or remote factor. However, it need not be the only factor that causes the accident.]”)

23 Same.

24 Penal Code 550 PC – False or fraudulent claims or statements; prohibited acts [false or misleading statements – form of auto insurance fraud], endnote 5, above.

25 Penal Code 549 PC – False or fraudulent claims against insurers; solicitation, acceptance or referral of business; penalties and restitution [form of auto insurance fraud], endnote 6, above.

26 Penal Code 551 PC – Automotive repair dealers; fraudulent acts [form of car insurance fraud], endnote 7, above.

27 Penal Code 548 PC – Defrauding or prejudicing insurer; punishment [form of auto insurance fraud], endnote 1, above.

28 Same.

29 Same.

30 Penal Code 550 PC – False or fraudulent claims or statements; prohibited acts [form of auto insurance fraud], endnote 2, above.

31 Same.

32 Penal Code 550 PC – False or fraudulent claims or statements; prohibited acts [deliberately causing an accident – form of auto insurance fraud], endnote 4, above.

33 Same.

34 Penal Code 12022.7 PC – Terms of imprisonment for persons inflicting great bodily injury while committing or attempting felony. (“(a) Any person who personally inflicts great bodily injury on any person other than an accomplice in the commission of a felony or attempted felony [including auto insurance fraud by causing an accident] shall be punished by an additional and consecutive term of imprisonment in the state prison for three years.”)

35 Penal Code 550 PC – False or fraudulent claims or statements; prohibited acts [false or misleading statements – form of auto insurance fraud], endnote 5, above.

36 Same.

37 Same.

38 Penal Code 549 PC – False or fraudulent claims against insurers; solicitation, acceptance or referral of business; penalties and restitution [form of auto insurance fraud], endnote 6, above.

39 Same.

40 Same.

See also Penal Code 672 PC -- Offenses for which no fine prescribed; fine authorized in addition to imprisonment. (“Upon a conviction for any crime punishable by imprisonment in any jail or prison, in relation to which no fine is herein prescribed, the court may impose a fine on the offender not exceeding one thousand dollars ($1,000) in cases of misdemeanors [including misdemeanor auto insurance fraud] or ten thousand dollars ($10,000) in cases of felonies, in addition to the imprisonment prescribed.”)

41 Same.

42 Penal Code 551 PC – Automotive repair dealers; fraudulent acts [form of car insurance fraud], endnote 7, above.

43 Same

44 Same.

45 See Auto Insurance Fraud: What It Costs You, Edmunds.com, Aug. 25, 2009.

46 Los Angeles insurance fraud defense attorney Neil Shouse is an honors graduate of UC-Berkeley and Harvard Law School. He served for five years as a Deputy DA for Los Angeles County, prosecuting more than 60 criminal trials and earning a phenomenal 96% success rate in felony jury trials. Now, as the founding partner of Shouse Law Group, he represents criminal defendants accused of a wide-range of high-stakes crimes, from DUI to auto insurance fraud to kidnapping and murder.

47 Penal Code 451 PC – Arson [related offense to auto insurance fraud]. (“A person is guilty of arson when he or she willfully and maliciously sets fire to or burns or causes to be burned or who aids, counsels, or procures the burning of, any structure, forest land, or property. . . . (d) Arson of property is a felony punishable by imprisonment in the state prison for 16 months, two, or three years. For purposes of this paragraph, arson of property does not include one burning or causing to be burned his or her own personal property unless there is an intent to defraud or there is injury to another person or another person's structure, forest land, or property.”)

48 Same.

49 Penal Code 456 PC – Fine upon felony conviction [for auto insurance fraud through arson]; fine based upon pecuniary gain; amounts. (“(a) Upon conviction for any felony violation of this chapter [California arson laws], in addition to the penalty prescribed, the court may impose a fine not to exceed fifty thousand dollars ($50,000) unless a greater amount is provided by law. (b) When any person is convicted of a violation of any provision of this chapter and the reason he committed the violation was for pecuniary gain, in addition to the penalty prescribed and instead of the fine provided in subdivision (a), the court may impose a fine of twice the anticipated or actual gross gain.”)

50 Penal Code 550 PC, subsections (a)(6)-(9).

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