Providing false information to an insurance company is against California law. Insurance fraud happens when you intentionally hide or misrepresent information to get benefits from an insurance contract, like auto, health, unemployment, welfare, Medi-Cal, or any other program. It is illegal to raise the cost of repairs after a minor accident, lie about receiving medical care, or hide your actual income to be eligible for Medi‑Cal. California considers most insurance fraud cases “wobblers,” so your offense is a misdemeanor if the fraud is less than $950 but a felony if it is higher.
Fighting insurance fraud charges is challenging, mainly when the stakes include hefty fines, prison time, and lasting effects on your personal and professional life.
At the Law Offices of Anna R. Yum in San Diego, we understand how a minor exaggeration or an innocent mistake on an insurance claim can quickly spiral into serious criminal charges. Drawing on our expertise in California insurance fraud statutes, we deliver targeted, strategic defense to safeguard your rights and secure the most favorable result possible. Reach out today to schedule your confidential consultation, and let us start building your defense.
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General Insurance Fraud, California Penal Code 550
You are not allowed, under California law, to knowingly claim or help someone claim for a loss or injury that is not real under an insurance contract. It is illegal to lie on your claim forms and submit the same loss to several insurers, hoping to deceive them.
If you arrange or participate in a staged car accident to file a false claim, you will be prosecuted under this statute. Any document you create, such as an estimate, repair bill, or medical record, that you know is false and plan to use for a claim is also against the statute.
A conviction requires the prosecution to prove that you deliberately lied about a material fact to defraud the insurer. However, it is not enough to argue that you were careless. The prosecutor must prove that you intentionally lied to avoid liability. Therefore, not providing services for which you were paid or making duplicate medical‑benefit claims is considered the same offense, but under a different section of the Penal Code.
The offense is a felony if the total amount you steal is over $950, because Penal Code 550 applies as a wobbler. If convicted of a felony, the sentence may include two, three, or five years in state prison, plus fines up to $50,000 or double the amount of the fraud, whichever is more.
If the total amount of fraud is less than $950, you may be charged with a misdemeanor and could go to county jail for up to one year and pay fines not exceeding $1,000. Importantly, the court can combine several small claims made within twelve months to reach the felony level, making what appeared to be minor errors into a primary offense.
The statute also requires an additional two-year sentence for each earlier conviction under 550 or the related property‑fraud provision 548. As a result, a single lie can lead to a lengthy prison sentence if you have previous convictions. In other words, a person who commits a first offense might be given probation or a brief county jail term for a small scheme, while someone who has offended before could be sentenced to many years for the same thing.
Auto‑Insurance Fraud, California Penal Code 548–551
Sections 548 through 551 in the Penal Code aim to prevent many fraudulent auto insurance activities, including purposefully damaging vehicles and arranging fake collisions. You can be liable for a felony if you willfully damage, abandon, or hide your car to help a false claim.
You may also face similar consequences if you:
- Increase repair estimates
- Submit multiple claims
- Plan a crash to make money
- Lie to support your claims
- Send clients to dishonest repair shops
Damaging, Hiding, or Abandoning a Vehicle, PC 548
If you injure, destroy, hide, abandon, or throw away a vehicle covered by insurance to defraud the insurer, you are committing a felony under section 548. This might involve spraying paint over new dents on your fender or leaving your car in an isolated place and claiming it was stolen. A conviction will result in two, three, or five years in prison, and you may be fined up to $50,000; furthermore, if you have previous 548 or 550 convictions, you must serve an extra two years in prison.
Fraudulent Claims & Related Acts, PC 550(a)(1)–(5)
A person who knowingly presents or helps present a false or fraudulent claim for insurance payments can be charged under Section 550(a)(1). If you overcharge for repairs, present fake invoices, or arrange accidents to receive money, you are breaking this rule. The law considers offenses worth more than $950 as wobblers, and these can result in two, three, or five years in state prison and a fine of up to $50,000 or twice the amount defrauded.
Multiple Claims & False Theft/Damage Claims, PC 550(a)(2),(4)
Under PC 550(a)(2), presenting multiple claims for the same loss to different insurers is prohibited, and PC 550(a)(4) bars claims for theft or damage that did not occur. If you file a claim for the same loss with two or more insurance companies, or lie about a theft. When this happens, the courts consider them part of one scheme, and the wobbler penalties apply. Penalties include sixteen months to five years in prison and fines up to $50,000 or twice the amount lost.
Staged Accidents, PC 550(a)(3)
It is illegal under Section 550(a)(3) to set up a “crash-for-cash” scheme, where you or others in the conspiracy cause a car accident to make a personal injury or property damage claim. Even if the collision is slow, it can still be illegal if it was meant to trick the insurer. A person could face two, three, or five years in state prison and a large fine if convicted.
False Statements in Support of Claims, PC 550(b)
Besides the claims, section 550(b) prohibits anyone from knowingly making a false or fraudulent statement to help an insurance claim. It refers to lying about your address to pay less for insurance or hiding past accidents on an additional form. You can be convicted of either a misdemeanor or a felony, with the former punishable by up to one year in county jail and the latter by sixteen months to five years in state prison.
Referring or Soliciting Auto‑Fraud, PC 549
Section 549 also applies to those who try to gain business from auto insurance fraud, such as repair shops that reward employees for fraudulent claims or agents who send clients to known fraudsters. You can be held liable if you act knowingly or without considering that the referral might be fraudulent.
The offense is considered a wobbler, and the punishment can range from sixteen months to three years in state prison, up to one year in county jail, and a fine of up to $50,000 or twice the amount of the fraud.
Health-Care Insurance Fraud, California Penal Code 550(a)(6)–(9)
According to California law, knowingly submitting any dishonest request for insurance coverage of medical expenses is illegal. The law addresses various unethical actions, such as billing for services not given, coding treatments at higher rates, claiming several times for the same service, and not reconciling overcharges with the insurer.
When the total amount of fraud does not exceed $950, you may be charged with a misdemeanor and face up to six months in jail and fines of up to $1,000. If the fraud exceeds the specified amount, it is considered a wobbler, with the offense punishable by up to five years in prison and fines of $50,000 or twice what was taken. Additionally, a prior conviction under PC 550 or similar fraud laws results in enhanced sentencing, showing how important it is to avoid even small billing mistakes.
Statutory Provisions
According to Penal Code 550(a)(6), it is illegal to make or help make a false or fraudulent request for a health care benefit, and subsection (7) prohibits submitting claims for services that were not used or needed by the claimant. Subsection (8) also makes it illegal to make multiple claims for the same benefit, and subsection (9) states that undercharges may only be presented if any known overcharges are reconciled. These provisions include private insurance, Medi‑Cal, and Medicare.
Elements of the Offense
The prosecution must prove that you intentionally submitted or caused submission of a claim with false information and aimed to defraud the insurer of its benefits. It is essential to consider your mental state; simple billing or clerical errors are insufficient unless there is proof of dishonesty. Whether you use forged signatures, upcode your services, or bill twice, the main issue is that you intended to profit from fraudulent actions.
Penalties and Enhancements
If the total fraudulent loss you cause in a year is $950 or less, you will be charged with a misdemeanor and may be sentenced to up to six months in county jail and fined up to $1,000. If the loss is more than $950, you could be charged with a felony and face imprisonment in a state prison for up to five years and a fine of $50,000 or twice the amount of the fraud, whichever is higher.
Sometimes, the court adds several small claims from the same year to decide on the proper charge. Moreover, if a person has been convicted under 550 or 548, which are related to property fraud, a two-year enhancement for each prior conviction can change a misdemeanor into a felony sentence.
Medi‑Cal Fraud
You can be charged with a crime in California if you try to gain Medi-Cal benefits by fraud or misuse your provider role. The following paragraphs discuss each primary type of Medi-Cal fraud.
Fraud by Recipients, Welfare & Institutions Code 14014
If you intentionally lie about your finances, family situation, or other facts to get Medi-Cal, this is considered recipient fraud under W&I 14014. It is wrong to declare less income than you truly earn or hide your assets to get benefits you should not receive. In California, these crimes are known as wobblers. If the total value of your benefits does not exceed $950, you will be charged with a misdemeanor and may be sentenced to six months in county jail and a fine of up to $1,000.
If the amount exceeds the limit, the case becomes a felony wobbler, and you could be sentenced to state prison for up to three years and fined up to $10,000. Furthermore, the prosecution can add several small underclaims within a year to reach the felony level, making even minor misrepresentations more serious.
Provider Fraud, Welfare & Institutions Code 14107, 14107.2
As a provider in the Medi-Cal program, you must be truthful when billing. According to W&I 14107, you are guilty of provider fraud if you make false or fraudulent claims for reimbursement, such as billing for unperformed services, exaggerating codes, or upcoding. Furthermore, W&I 14107.2 clearly states that no one requests a kickback, bribe, or rebate for making referrals or purchasing equipment, drugs, or services.
For these crimes, you can face misdemeanor charges with one year in county jail and $10,000 in fines for milder actions or felony charges with sixteen months, two or three years in state prison, and the same fine limit for more serious crimes or if you commit them twice. If regulators remove your Medi-Cal billing privileges, your practice will be affected, and you will face additional penalties.
Medi-Cal Benefit Claims, PC 550
When you submit Medi-Cal reimbursement claims, you are still covered by Penal Code 550 and the Welfare & Institutions Code. Section 550(a)(6) through (9) states that anyone who submits a fake or false claim for a health-care benefit, including Medi‑Cal, with the intent to defraud, can be charged with a crime.
If you submit a fake treatment log, double-bill for a service, or bill for things you did not provide, you are guilty of 550 and may be charged with misdemeanors for minor losses or felonies for larger losses. If you have a previous conviction under 550 or similar laws, your sentencing will increase by two years for each offense.
Welfare Fraud, Welfare & Institutions Code 10980
If you knowingly cheat the state to receive help you are not eligible for, you are committing welfare fraud. If you intentionally hide or falsify important information about your income, household size, or assets to get CalWORKs, CalFresh, Medi‑Cal, or similar aid, you can be charged with a misdemeanor under Section 10980(a) of the Welfare & Institutions Code.
Additionally, you are committing a crime if you apply for help using a false name or make several applications for a single person. If a single mother failed to include a few hundred dollars in her second paycheck, she thought it was unimportant, but the law saw it as a dishonest act that made her help illegal.
When the total value of the improperly received benefits is more than $950, section 10980(c) considers the offense a felony wobbler, which can result in up to three years in state prison and fines of up to $50,000. The law allows the state to add several small underclaims within a year, making them felonies even if the original mistakes were minor. I remember a client who misrepresented their benefits a few times and faced felony charges; it showed me that even honest mistakes can lead to serious consequences.
As an agency employee, you may be liable for internal fraud if you certify a false application to help a friend or relative. Even though this type of wrongdoing is uncommon, it is still punished by the same rules and may result in immediate suspension or being barred from public service. Furthermore, according to section 11483.5, if you submit several aid applications with fake identities or for people who do not exist, these acts will be treated as felonies under the Chapter 9 enforcement framework.
Tampering with or counterfeiting EBT cards, food-stamp vouchers, or other assistance documents is a wobbler offense under section 10980(g) and can result in up to three years in jail and fines of up to $50,000. In reality, prosecutors consider any unauthorized use or sale of electronic benefits a serious offense, leading to felony charges for anyone involved, even if it is their first offense. Because the law covers so much, you should always be precise in your dealings with welfare programs to avoid facing serious criminal charges.
California’s laws against insurance fraud cover everything from slight exaggerations of property damage to complex staged accidents, and sections 548, 550, 14014, and 10980 of the Penal and Welfare & Institutions Codes deal with auto, health care, unemployment, and welfare fraud. Since most offenses can be charged as felonies or misdemeanors, small acts of fraud, if repeated, could result in up to five years in jail and fines of $50,000 or twice the amount of the fraud. This means that honesty from consumers and strict enforcement are necessary, showing the state’s dedication to safeguarding insurers and insureds.
Unemployment Insurance Fraud
If you willfully lie, hide essential facts, or use a fake name or Social Security number to get, increase, reduce, or avoid unemployment insurance benefits, you are committing fraud under California UI Code 2101. As a result, you may keep collecting weekly benefits after working, claim you are searching for a job, or provide false information that you are unemployed. Under UI Code 2101, large or repeated overpayment schemes are treated as serious offenses and are referred to criminal prosecutors, which can result in felony charges.
For a conviction under UI 2101, the prosecution has to show that you intended to trick the state’s unemployment insurance system by lying about significant facts. Even a small error, such as being overpaid by a week, can be added to other falsehoods within a year to take your total fraudulent benefits above the legal limits.
If the amount in question is less than $20,000, your case could be tried as a misdemeanor, and you could be sentenced to one year in county jail and fined up to $20,000. Yet, if the fraudulent benefits you receive add up to more than $20,000 or if the offense involves identity theft or forgery, you may be charged with a felony and could spend sixteen months, two or three years in state prison, and have to pay similar fines.
Besides, if the total amount you gained through fraud exceeds $950, you may be charged under Penal Code 550, and this could result in the same penalties of up to five years in prison and fines of up to $50,000 or twice the amount of the fraud.
In California, workers’ compensation fraud includes making false claims, providing false information, and sending fraudulent referrals. Prosecution for these offenses occurs under Insurance Code 1871.4 and Penal Code 550 and 549; the penalties depend on the offense’s seriousness.
Find an Insurance Fraud Defense Lawyer Near Me
Insurance fraud allegations carry severe penalties, from county jail sentences and thousands of dollars in fines for misdemeanors to years behind bars and enhanced penalties for felony wobblers. Since the consequences can be severe, you need the assistance of a lawyer during an insurance fraud case. If you get advice from a lawyer early on, you can settle the case without harsh consequences.
An experienced defense attorney can review the evidence, question the intent behind the theft crime, and suggest different resolutions such as diversion, lesser charges, or reduced sentences. Furthermore, having legal advice beforehand keeps small claims from becoming a burden and protects your license, credit, and personal freedom.
At the Law Offices of Anna R. Yum, we defend people against insurance fraud charges across San Diego, whether it involves auto, health care, Medi-Cal, unemployment, or welfare fraud. Early intervention is key to minimizing consequences and preserving your future. Call us now at 619-493-3461 for a free, no-obligation case evaluation.
