Fraud crimes are generally considered white-collar crimes because of their nonviolent nature. However, these crimes carry hefty penalties because of the possibly significant financial losses involved. Thus, a person could end up serving a longer prison sentence for a fraud crime as compared to other types of crimes. What you need to do when you are charged with fraud crime is to seek expert legal help as soon as possible. We at the Orange County Criminal Defense Attorney Law Firm have an in-depth knowledge of both federal and state laws regarding fraud crimes, and we invite you to discuss the case with us so that we can help you.
An Overview of Fraud Crimes
Fraud is legally defined as the intention to misrepresent oneself to another person with the full knowledge of the false misrepresentation and to cause another person to act in a way that results in their damages or losses. Fraud could also be committed by omission, in which case a person purposefully fails to provide the necessary material facts, which results in them making misleading statements.
For a person to be arrested and charged with Fraud, the element of misrepresentation or omission must be there and should relate to a fact. A promise to do something in the future is not considered as Fraud as it is a mere expression of a person's opinion, which does not qualify as a claim of Fraud. The omission or false statement in Fraud must be material, which means that it should be significant to the decision the victim makes afterward.
Again, omission or representation must be made intentionally and knowingly for a person to be arrested and charged with Fraud. It should not be made by accident or mistake or even by negligent disregard of the truth. There should also be proof that the accused intended that the victim relies upon the omission or misrepresentation and that they indeed relied on the Fraud and suffered damages or injuries as a result.
Due to the severity of injuries and damages that result from Fraud, fraud crimes in the state of California are aggressively punished. Even though the crime itself does not result in severe bodily injuries or death of victims, it results in serious financial losses, and so, it is severely punished. If you or your loved one is facing Fraud charges, it is important to work with an experienced criminal defense attorney to review your case and work to provide the best possible outcome for your case.
Types of California Fraud Laws
The state of California has substantial laws in place to fight fraud crimes and protect would-be-victims against losses that result from such and similar crimes. Here are the most popular types of Fraud statutes in the state and their subsequent punishments for any person found guilty of violating them:
Check Fraud Laws as Provided Under PEN 476
According to Section 476 of the California Statutes, it is illegal for a person to validate a check with another person’s name without that other person’s permission. Check Fraud can be committed in several ways, including:
- Signing another person’s name or a fictitious name in a genuine check without the original check owner’s permission
- Changing the amount of money on a valid check
- Altering the check’s routing number
However, the prosecutor must prove the following elements beyond any reasonable doubt:
- That the defendant had used, passed, made, or tried to use or pass a fake check or one that has been altered, note, bill, or any other legal inscription for the acquisition of goods, or money.
- That the defendant was well aware that the check or document they were using was fake or altered.
- That the defendant had the intention of defrauding another person when they possessed, passed, used, made, or tried to use or pass that document.
If the false or altered check changed possession, the prosecutor must prove to the court that at the time the defendant had the document, they had the intention of using or passing it as an authentic document.
Since Check Fraud crimes amount to forgery, as provided under Section 470 of California statutes, the punishment for this offense is the same as those of forgery. Check Fraud crime can be convicted as a felony or misdemeanor, liable to the circumstances of your case and your criminal history. As a misdemeanor, the Fraud can be punished with fines, a full year in a county jail or both. If you get a felony sentence, you might end up serving three years behind bars and paying more substantial fines.
However, under Proposition 47, Check Fraud can only be treated as a misdemeanor if the value of money on the forged check is not more than $950 and the defendant is not convicted of Identity Theft as provided under Section 530.5.
Identity Theft Laws
Identity Theft laws are provided under Section 530.5 of the California penal code. The laws state that it is illegal for any person to take another person's identity information so they can use it in a fraudulent or unlawful manner. This could mean using another person's identifying information illegally to obtain medical information, goods, or services, in the name of that person. Identity Theft can be committed in more than one way, as follows:
- When a person willfully obtains another person’s identifying information and uses it for unlawful purposes without the consent of that other person
- When a person acquires or retains the control of another person's identifying info without their permission with the intention of committing a crime or Fraud
- When a person sells, transfers, or provides another person’s identifying information without the consent of that person, with the resolve to commit Fraud
- When a person sells, provides, or transfers the identifying information of another party without their knowledge that their data could be used in committing Fraud
In California, any intentional acts that are projected towards securing an illegal or unfair advantage, or bring the suffering of loss to another person are considered and charged as Fraud. Using another person's personal info for an illegal purpose will also constitute Fraud.
The first element of this crime is willfully obtaining another person’s identifying information, which means that this is done intentionally. Personal identifying data will include another person’s tax ID and Social Security Number, their full names, date of birth, phone number and address, their driver’s license number, passport info, school ID number, employees ID number, bank account details, credit card information, and information contained in their birth or death certificates, among others.
Identity Theft is also a wobbler offense in California, and so, it can be convicted as a felony or misdemeanor. If indicted as a misdemeanor, the offender might get a one-year jail term and a maximum fine of $1000 or both. If the offender receives a felony sentence, they could spend 16 months, 2 or 3 years in county jail and pay a maximum fine of ten thousand dollars.
Health Insurance Fraud
Health Insurance Fraud laws are provided under Section 550 of the California laws, and they involve claims for compensation of benefits that healthcare providers like therapists and doctors submit to healthcare insurance companies. Health Insurance Fraud crime can be committed in several ways:
- When a person provides claims for the services and procedures that were not delivered or performed- California laws under Section 550 renders it illegal for a person to claim for a healthcare procedure or service that was never utilized by the individual whose name has been used on the claim form.
- When a person submits fraudulent or false claims for healthcare benefits, this could include offering a service that a patient did not need and then billing their insurance carrier for it. This could also be achieved by upcoding or billing an insurance carrier for more costly service or procedure than what the patient in question received. A person who applies charges to a patient with insurance and not to people who pay out of their pocket will also face similar charges.
- When a person submits several claims for one healthcare procedure or service, invoicing the insurance provider twice
- When a person provides undercharges without overcharges. This means that it is illegal for a person to send an invoice to a medical insurance company for procedures and services that were charged less without sending a bill for any service that was overcharged at the same time.
- When a person prepares writing to support a fraudulent claim, this applies to people who prepare documents that can be used in support of fraudulent healthcare claims.
To be charged with Health Insurance Fraud, the accused must have:
- Known that the claim was deceitful or false
- Intended to fraud the healthcare insurance provider
If found guilty of this offense, the offender might be charged with a misdemeanor or felony depending on the circumstances of their case and their criminal history. If the claims in question were adding up to $950 or less, the offender would get a misdemeanor conviction, which is punishable by a maximum of 6 months of jail time and a fine of up to $1000.
If the claims were above $950, the offense could be convicted as a felony or misdemeanor. If you get a misdemeanor, you might spend a maximum of 1 year in jail and/or pay a fine of not more than $10,000. If you get a felony, you could get probation with a maximum of 1 year in jail, or 2, 3 or 5 years in county jail. A medical professional involved in Health Insurance Fraud might lose their practicing license.
Foreclosure Fraud laws
Foreclosure Fraud crime in California is covered under Sections 2945 and 2945.4 of the state’s Civil Code. It represents the most common type of real property fraud in the state. This could be because information about pending foreclosure is usually on public records and anyone can obtain such information with ease. Many people have taken advantage of that fact to target homeowners who are desperate to save their homes.
According to the civil laws governing Foreclosure Fraud, it is illegal for a specialist in foreclosure, the person whose job is to halt or postpone sales of foreclosures, to perform specified acts such as:
- Collecting or charging a payment before they can deliver every genuine service that they have offered to do for the property holder
- Charging or collecting a higher fee than the average for their services
- Taking a lien on a property, or asking for any form of security as a guarantee for their compensation, or charging interest on the property
- Obtaining money or acquiring possessions from another person pertaining to the services that they have agreed to offer to the proprietor without disclosing the intention and involvement of that third party to the homeowner
- Taking power of attorney from their clients, a document allowing them to transact or act legally on behalf of the property holder
- Inducing or trying to persuade the homeowner into authorizing an agreement that doesn’t fulfill with all the set guidelines and regulations.
As per the provision of Civil Code 2945.4, this type of offense will be convicted as a felony or misdemeanor liable to the conditions of the case and the offender’s past criminal record. As a misdemeanor, the offender will receive a jail term of one year and be required to pay a fine of not more than $10,000. As a felony, the punishment will be a little stiffer. The offender might fail a prison term of 16 months, 2 years, or 3 years, and pay fines for not more than $10,000.
An offender could get additional penalties in circumstances such as the following:
- If the renter or homeowner was defrauded an amount that is over $65,000, the offender will receive an additional 1-4 years of imprisonment, a sentence that should be carried consecutively with the first punishment.
- If the offender had a prior conviction of two and above offenses involving fraud, or they defrauded the homeowner of an amount of over $100,000, they will get an additional 1-4 years of prison time and an additional charge of at least $500,000, or twice the amount they defrauded their victim.
- The offender might be required to pay restitution to their victims.
Securities Fraud laws
Security is a business term that is used to refer to a business plan whereby a person is promised part ownership of a corporation or the right for debt repayment. There are several types of securities today, including stocks in a company, limited benefits in business partnerships and certificates that show that a holder has an interest in the profit-sharing plan of a particular business. It could also be a note indicating that a company owes money to the bearer of the note.
Security laws do not, however, apply in all situations where people get into a business partnership. If two people come together and agree to invest in a business that they are going to run together, this will not be regarded as a security.
Security fraud can happen in different situations, such as the following:
- When a person sells unqualified securities without having them qualified by the state’s Department of Corporations as required under Section 25110. The law requires a company issuing securities to qualify them first, and this means filing many documents and exposés from the business.
- When a person sells securities that have not met the terms provided on qualification
- When a company provides misleading or false declarations in the sale of their securities
- When a person gives a misleading or false picture about the sale of the securities they are issuing on the market.
- When insider trading is involved, which means selling or buying of securities as per the information that was not publicly availed, and you only know about it for the reason that you have an association with the business.
Securities Fraud is punishable by law, and the kind of punishment the offender receives is determined by the conditions of their case and their past criminal record. This type of offense is a wobbler in California, and so, it will be convicted as either a felony or a misdemeanor.
If a person is found guilty of willfully committing either of the offenses mentioned above, they might get severely punished and could be sentenced to several years behind bars and payment of heavy penalties. Violation of Section 25540(a), of selling unqualified securities could earn you a maximum of 3 years in jail or prison plus pay a fine that could go up to one million dollars. Violation of Section 25540(b) of engaging in manipulation and use of misleading information could earn you a prison time of between two and five years and a fine that can go up to ten million dollars.
Possible Defenses for California Fraud Crimes
Deceiving another person or entity for financial gain is one of the most severe crimes in the state of California. Depending on the amount of money you have defrauded another party and your criminal history; a person could be sentenced to many years in prison and be required to pay hefty fines.
In addition to that, professionals risk losing their licenses, which could hurt their lives and their families in general. To avoid a conviction, it is crucial to seek the help of a competent criminal defense attorney. There are several defense strategies that your attorney can utilize to help your case:
Every fraud case requires the prosecutor to prove certain elements to show that the offender is indeed guilty of the charges they are facing. If the prosecutor is unable to collect enough evidence, or the evidence obtained is not sufficient to sentence you of the crime, your attorney could take advantage of that to secure your freedom. If for instance, there is no proof that the offender intended to defraud their victim, or they did not act willfully, the case might be dismissed for lack of sufficient evidence.
A case of mistaken identity
There are many cases of mistaken identity in the state today, and some people are paying for crimes they did not commit in the first place. This means that it is possible for a person to be arrested for fraud even if they did not commit the crime. Again, fraud is a crime that happens behind the scenes, with no witnesses. It is easy for a person to be wrongly identified as the offender, while the real culprit is still out there.
Unlawful search and seizure
Even if a person was guilty of the offense, but the proof against them was acquired without a legal search warrant, they may get acquitted of the charges they are facing. California laws prohibit law enforcement agencies from conducting illegal searches and seizures even if they have a strong reason to believe that a person is guilty of a particular crime.
Mistake of facts
A person could be charged with fraud even if they did not do it willfully. If for instance, you did not have a way of knowing that what you said was untrue, you may not be punished for fraud.
No damages were sustained
Your attorney may get your charged reduced if your victim did not suffer any injuries or losses.
Find an Orange County Criminal Attorney Near Me
If you have been charged with a fraud crime, or your loved one has, you need the best legal representation you can get. This way, you can prepare a strong defense against the charges you are facing and have your charges reduced or possibly dropped. The Orange County Criminal Defense Attorney Law Firm comprises of a team of highly trained and experienced attorneys who are willing and ready to take up your case and walk with you through the process until your needs are met. Call us at 714-740-7171 and let us offer our help, support, and advise at a time you need it the most.