Penal Code § 548 PC – Insurance Fraud by Damaging or Abandoning Property

Penal Code 548 PC makes it a crime to injure, destroy, secrete, abandon or destroy property in order to file a fraudulent insurance claim. A conviction is a felony punishable by up to 5 years in jail or prison, and up to $50,000.00 in fines.

Note that the statute is often cited as 548 PC or 548 CPC as abbreviations for the California Penal Code.

The language of the statute reads as follows:

548. (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.

The offense is sometimes called “staging an accident.” The statute is one of several of California’s auto insurance fraud laws.

Examples of illegal acts under this code section include:

• Tom is hurting for cash and damages his own mustang in order to collect the insurance money.
• Nia abandons her car in a secluded field and then calls her insurer and tells them that her car was stolen.
• Paco fakes a “break-in” of his girlfriend’s car by damaging the windows and doors, and she then reports to her insurer that she was a victim of grand theft, per PC 487.

Defenses

Luckily, there are several legal defenses that a person can raise if accused of a crime under Penal Code 548. These include showing that the defendant:

• had no intent to defraud,
• was falsely accused, and/or
• was arrested without probable cause.

Penalties

A violation of this code section is charged as a felony (as opposed to a misdemeanor or an infraction).

The crime is punishable by:

• imprisonment in the county jail for up to five years, and/or
• a maximum fine of $50,000.

Please note that in lieu of jail time, a judge may award a defendant with felony (or formal) probation.

Our California criminal defense attorneys will explain the following in this article:

• 1. Is it a crime to stage an accident or an auto theft?
• 2. Are there legal defenses to PC 548?
  • 2.1 No intent to defraud
  • 2.2 Falsely accused
  • 2.3 No probable cause
• 3. Penalties, punishment, and sentencing
• 4. Related offenses
  • 4.1 Referring, soliciting or accepting auto insurance fraud business – PC 549
  • 4.2 Fraudulent claims – PC 550
  • 4.3 Kickbacks from auto repair shops – PC 551

1. Is it a crime to stage an accident or an auto theft?

Penal Code 548 PC is the California statute that makes it a crime for a person to purposefully damage or abandon a vehicle in order to submit a claim with an auto insurance company.¹

A prosecutor must prove two things in order to convict a person under this statute. These are that the defendant:

1. injured, destroyed, hid, abandoned, or disposed of a car or other motor vehicle that was insured against loss or damage, and
2. did so with the intent to defraud or prejudice the insurance company.²

“Intent to defraud” means an 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.³

An accused can be guilty of this crime even if the insurance company never loses money because of his actions—and even if the car was not his.⁴

Also note that a person can be guilty if the applicable insurance policy was invalid, provided that:

• the defendant believed it to be valid, and
• the defendant committed the crime with the intent to collect on the policy.⁵

2. Are there legal defenses to PC 548?

If a person is accused of a crime under this statute, then he can challenge the accusation by raising a legal defense. A good defense can often get a charge reduced or even dismissed.

Three common defenses to accusations under PC 548 are:

1. no intent to defraud,
2. falsely accused, and/or
3. no probable cause.

2.1. No intent to defraud

The language within Penal Code 548 states that an accused is only guilty if he acts with the intent to defraud the insurer. Therefore, it is always a legal defense for a defendant to show that he did not act with this requisite intent.

2.2. Falsely accused

Unfortunately, it is not at all uncommon for people to get prosecuted based on false allegations. People get falsely accused out of

• jealousy,
• revenge, and
• anger.

Thus, it is a valid defense for a defendant to say that a party falsely accused him of violating Penal Code 548.

2.3. No probable cause

The Fourth Amendment to the U.S. Constitution says that police must have probable cause before they can detain or arrest a suspect of a crime.

If a person was stopped or arrested for violating PC 548, and there was no probable cause, then any evidence obtained following the improper stop/arrest could get excluded from the case. This exclusion could result in the dismissal or reduction in charges.

3. Penalties, punishment, and sentencing

A violation of Penal Code 548 is charged as a felony.

The crime is punishable by:

• imprisonment in the county jail for up to five years, and/or
• a maximum fine of $50,000.⁶

Please note that in lieu of jail time, a judge may award a defendant with felony (or formal) probation.

Also, note that there is a two-year sentence enhancement for each prior felony conviction for auto insurance fraud under Penal Code 548 or 550.⁷

4. Related Offenses

There are three crimes related to auto insurance fraud by damaging or abandoning a vehicle. These are:

1. referring, soliciting or accepting auto insurance fraud business – PC 549,
2. fraudulent auto insurance claims – PC 550, and
3. kickbacks from auto repair shops – PC 551.

4.1. Referring, soliciting or accepting auto insurance fraud business – PC 549

Penal Code 549 PC is the California statute that makes it a crime for a person to refer someone to an auto repair shop with the knowledge that the professional will submit a fraudulent insurance claim.⁸

PC 549 is a wobbler offense, meaning that it can be charged as either a felony or a misdemeanor.

The potential felony penalties are:

• felony (or formal) probation,
• imprisonment in jail for up to three years, and/or
• a maximum fine of up to $50,000, or double the amount of the fraud, whichever is greater.⁹

The potential misdemeanor penalties are:

• misdemeanor (summary) probation,
• up to one year in county jail, and/or
• a fine of up to $1,000.¹⁰

4.2. Fraudulent auto insurance claims – PC 550

Penal Code 550 PC is the California statute that makes it a crime for a person to submit fraudulent auto insurance claims.¹¹ It is also a crime under this statute if a person:

• presents multiple claims for the same loss,
• causes an accident while engaging in a scheme to defraud an auto insurer, and
• presents false information to an auto insurer in support of a claim.¹²

In general, violations of this statute are charged as felonies. The punishment may include:

• imprisonment for up to five years in prison, and/or,
• a maximum fine of up to $50,000, or double the amount of the fraud, whichever is greater.¹³

4.3. Kickbacks from auto repair shops – PC 551

Penal Code 551 PC is the California statute that prohibits the unlawful referral to an auto repair dealer.¹⁴

Depending on the facts of the case, a violation of PC 551 can be charged as either a misdemeanor or a felony. Penalties can be as harsh as:

• imprisonment in the county jail for up to three years, and
• a fine of up to $1,000.¹⁵

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