Federal fraud charges are serious business. A federal charge can land you in prison for years, and the financial impact can be high.
One kind of fraud that a person may commit that would be considered a felony is insurance fraud. As a felony, insurance fraud carries a potential prison sentence of between 2 and 10 years. Fines can also be up to $10,000. On top of that, those convicted may have to pay restitution to the victims and could be held liable for civil penalties.
Who can be prosecuted for insurance fraud?
Anyone can be prosecuted for insurance fraud including providers of services, consumers, insurance adjusters, insurance companies themselves and others.
Are there different kinds of insurance fraud?
Yes. Some common types of insurance fraud include:
- Medical and health care fraud
- Life insurance fraud
- Fire insurance fraud
- Property insurance fraud
- Automobile fraud
- Workers' compensation fraud
What does it take for the prosecution to win a case?
To prove fraud, the prosecution has to show that you knowingly lied about or concealed a fact related to an insurance claim or payment. Rate-fixing schemes and using fake insurance policies also qualifies as insurance fraud by law.
Here's an example. If you want to make a claim for your house burning down, you should understand that intentionally burning down your home would make the claim void. So, you claim that a fire started unintentionally despite setting it yourself. If you get caught later on, then you could be accused of insurance fraud and manipulating the situation to get a payout, which is against the law.