Penal Code 549 PC – Referring or Soliciting Auto Insurance Fraud Business

Penal Code 549 PC is the California statute that makes it a crime for:

• a person to refer someone to an auto repair shop, or
• a shop to solicit business from someone

when the person or shop knows that a fraudulent auto insurance claim will be submitted.

PC 549 is one of several of California’s auto insurance fraud laws.

According to this statute:

“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…the individual or entity…intends to violate Section 550 of this code…is guilty of a crime, punishable…by imprisonment in the county jail for not more than one year or by imprisonment…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…”

Examples

• Jim is a friend of the owner of Joe’s Car Repair and he refers a customer there even though he knows Joe submits fraudulent auto insurance claims.
• Sophia is an insurance agent and directs an insured to go to Joe’s Car Repair, even though she knows Joe submits corrupt insurance claims.
• Andres works for Joe’s Car Repair and solicits business from a person post auto accident, even though he knows Joe submits dishonest claims.

Defenses

Luckily, there are several legal defenses that a person can raise if accused. These include showing that the defendant:

• had no knowledge of submission,
• was falsely accused, and/or
• was arrested after a coerced confession.

Penalties

A violation of this code section is a wobbler offense. This means that it can be charged as either a misdemeanor or a felony.

The potential misdemeanor penalties are:

• up to one year in county jail, and/or
• a fine of up to $1,000.

The potential felony penalties are:

• imprisonment in county 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.

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

• 1. What is prohibited under California Penal Code 549 PC?
• 2. Are there legal defenses to the charge?
  • 2.1 No knowledge of submission
  • 2.2 Falsely accused
  • 2.3 Coerced confession
• 3. Penalties, punishment, and sentencing
• 4. Related offenses
  • 4.1 Auto insurance fraud by damaging or abandoning a vehicle – PC 548
  • 4.2 Fraudulent claims – PC 550
  • 4.3 Kickbacks from auto repair shops – PC 551

1. What is prohibited under California Penal Code 549 PC?

Penal Code 549 PC is the California statute that makes it a crime for:

• a person to refer someone to an auto repair shop, or
• an auto repair shop to solicit business from someone

when the person or shop knows that a fraudulent auto insurance claim will be submitted.¹

This statute applies to any:

• firm,
• corporation,
• partnership,
• association,
• any person acting in his or her individual capacity, or
• any person acting in his or her capacity as a public or private employee.²

2. Are there legal defenses to the charge?

If a party is accused of a crime under this statute, then it 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 549 are:

1. no knowledge of submission,
2. falsely accused, and/or
3. coerced confession.

2.1. No knowledge of submission

The language within Penal Code 549 states that an accused is only guilty if he acts with knowledge that a person or business will submit a fraudulent insurance claim. Therefore, it is always a legal defense for a defendant to show that he did not act with this requisite knowledge.

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 549.

2.3. Coerced confession

California law states that police may not use overbearing measures to coerce a confession.

If a party can show that the police coerced him into a confession, then:

1. the judge may exclude the confession from evidence, or
2. the case could get dropped altogether if the party got pressured into confessing to a crime he didn’t commit.

3. Penalties, punishment, and sentencing

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

The potential misdemeanor penalties are:

• misdemeanor (summary) probation,
• up to one year in county jail, and/or
• a fine of up to $1,000.³

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.⁴

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.⁵

4. Related Offenses

There are three crimes related to referring or soliciting auto insurance fraud business. These are:

1. auto insurance fraud by damaging or abandoning a vehicle – PC 548,
2. fraudulent auto insurance claims – PC 550, and
3. kickbacks from auto repair shops – PC 551.

4.1. Auto insurance fraud by damaging or abandoning a vehicle – PC 548

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.⁶

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.

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 $50,000.⁷

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.⁸ 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.⁹

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.¹⁰

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.¹¹

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 $1,000.¹²

For further assistance…

If you or someone you know has been accused of a crime under Penal Code 549 PC, we invite you to contact us for a free consultation. We can be reached 24/7.

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