Insurance Fraud Attorney Near Me: Exposure and Liability in California

Under 18 U.S.C. § 1347, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program carries a prison sentence of up to 10 years per count. If the violation results in serious bodily injury, the maximum statutory prison term increases to 20 years; if the violation results in death, the sentence can extend to life imprisonment.

Federal courts determine sentences under the United States Sentencing Guidelines (USSG), primarily evaluating the calculated loss amount, the degree of planning, and the defendant's specific role in the alleged offense. Prosecutors frequently pair § 1347 charges with mail fraud (18 U.S.C. § 1341) and wire fraud (18 U.S.C. § 1343), each carrying separate maximum sentences of 20 years per count.

In federal criminal convictions, the Mandatory Victims Restitution Act (MVRA), codified at 18 U.S.C. § 3663A, requires the sentencing court to order full restitution to identified victims, including private insurance carriers and government-sponsored insurance programs. Unlike civil judgments, restitution obligations resulting from federal criminal convictions cannot be discharged through bankruptcy under 11 U.S.C. § 523(a)(13).

Restitution orders apply jointly and severally across co-defendants, exposing each participant to full liability for the financial loss proven by the government.

Some California insurance fraud offenses under California Penal Code (PC) § 550 are classified as "wobblers," while others are felonies. A wobbler is an offense that prosecutors can charge as either a misdemeanor or a felony, depending on the monetary value of the claim and the defendant's prior criminal history.

• Claims Exceeding $950: Certain fraudulent claims exceeding $950 within a 12-month period may be charged as felonies or misdemeanors. Felony convictions under PC § 550 carry imprisonment terms of two, three, or five years, alongside fines up to $50,000 or double the amount of the fraud, whichever is greater.
• Claims Below $950: Claims of $950 or less can be misdemeanors, carrying up to six months in county jail and fines of up to $1,000.
• Specific Statutory Offenses: PC § 548 (injuring or abandoning property to defraud an insurer) and PC § 549 (soliciting or referring business for fraudulent insurance claims) carry separate felony sentencing enhancements for repeated offenses.

California state courts follow statutory sentencing triads (lower, middle, or upper term) based on aggravating and mitigating factors. The table below outlines primary statutory violations and exposure under the California Penal Code:

Under the California Insurance Frauds Prevention Act (IFPA), codified at California Insurance Code § 1871.7, private parties or insurers can file Qui tam civil actions on behalf of the state against any person who engages in insurance fraud.

Civil liabilities under Insurance Code § 1871.7 include:

1. Statutory Penalties: Mandatory civil penalties ranging from $5,000 to $10,000 per fraudulent claim filed.
2. Treble Damages: An assessment of up to three times the amount of each claim for compensation paid by the insurance carrier.
3. Clawback Recovery: Full restitution of historically paid claims over the duration of the fraudulent activity.

Unlike general civil litigation where parties bear their own costs, California Insurance Code § 1871.7(g) explicitly allows prevailing insurers or state enforcement agencies to recover reasonable attorney's fees, expert witness fees, and total investigation costs from the defendant. These shifted costs frequently equal or exceed the base financial claim.

Insurance carriers routinely use policy-mandated Examinations Under Oath (EUO) to investigate suspect claims. Statements made during an EUO are taken under penalty of perjury and are routinely shared with law enforcement agency investigators. An insured or corporate representative facing fraud allegations must evaluate Fifth Amendment protections and contractual policy obligations with legal counsel before attending an EUO or responding to investigator inquiries.

Upon learning of an inquiry, companies and individuals must issue formal legal holds to preserve physical records, electronic files, and communication logs. Conducting internal reviews under attorney-client privilege helps assess financial exposure accurately while preventing intentional evidence destruction, which can independently trigger misdemeanor charges under California Penal Code § 135.