Federal Insurance Fraud

Federal insurance fraud crimes are taken very seriously by federal prosecutors because they want to discourage people from trying to profit off unlawful gains concerning insurance. There is strong public sentiment that there is rampant fraud within the insurance sector, and the prevalence of fraud makes insurance riskier and more expensive for consumers and insurance companies alike. The insurance fraud lawyers at the Law Offices of Brandon Sample have represented a long list of clients who have faced federal insurance fraud charges and trust the firm to help them make sense of a confusing and troubling situation.

An Introduction to the Crime of Federal Insurance Fraud

Insurance fraud commonly involves a policyholder attempting to deceive an insurance provider in order to receive money for a claim that they are not rightfully entitled to receive. This could mean that the policyholder made false statements on an insurance policy application or knowingly gave false information to an insurance provider on a claim submission in order to receive a payout. Insurance fraud crimes can also involve a situation in which an insurance company refuses to provide a benefit to a policyholder that the insurance company knows the individual is entitled to receive.


There are plenty of state criminal laws that address insurance fraud crimes, but it can rise to the level of federal charges when the fraudulent activity at issue crosses state lines. This is fairly easy for a federal prosecutor to show because many of these financial crimes are bound to cross state lines. In addition, if the insurance fraud activity occurs only within the confines of Washington, D.C. or any other U.S. territory, it qualifies as a federal crime.

What is Insurance Fraud?

Pursuant to 18 U.S. Code § 1033, it is a federal crime when anyone who "is engaged in the business of insurance whose activities affect interstate commerce and knowingly, with the intent to deceive, makes any false material statement or report or willfully and materially overvalues any land, property or security in connection with any financial reports or documents presented to any insurance regulatory official or agency or an agent or examiner appointed by such official or agency to examine the affairs of such person, and for the purpose of influencing the actions of such official or agency or such an appointed agent or examiner.”


It is also a crime under the same law when a person who is engaged in the insurance business “willfully embezzles, abstracts, purloins, or misappropriates any of the moneys, funds, premiums, credits, or other property” in the course of his insurance activities.


Federal insurance fraud activities can be reported by whistleblowers, and they can also be investigated by private agencies before they are brought to the attention of the federal government. It is important to speak with an insurance fraud lawyer right away if you suspect that you are the subject of a federal investigation so that you can begin preparing an effective defense in a timely manner and do not do anything that further jeopardizes your freedom or professional life.

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Insurance Fraud Punishment

The possible sentence or punishment for a person convicted of federal insurance fraud in the insurance business pursuant to 18 U.S. Code § 1033 is up to 10 years in federal prison in addition to having to pay restitution or fines. However, if the value of the property embezzled or unlawfully taken is less than $5,000, the maximum penalty that a convicted defendant may face is up to one year in jail.


It is important to keep in mind that even though the vast majority of federal insurance fraud crimes do not involve physical harm inflicted upon another person, the penalties if you are convicted of one of these offenses still have drastic effects on your future. You may lose your ability to obtain certain professional licenses if convicted, which could drastically restrict your ability to earn an income or maintain your professional life. This is why it is so important to speak with an insurance fraud attorney as soon as possible to mitigate your criminal liability and potential punishment.

Consulting with an Experienced Federal Insurance Fraud Lawyer

Contact the insurance fraud lawyers at the Law Offices of Brandon Sample at 802-444-HELP (4357) to discuss the specifics of your case and get started on putting together a viable defense or appeal. These federal charges carry a lifetime of consequences if they are not addressed swiftly. You can find yourself facing prison time and expensive fines as well as a criminal record that will affect your personal and professional life forever. Having competent legal counsel on your side through representation by insurance fraud attorney Brandon Sample can help determine the best next steps in what is understandably a stressful and life-altering situation. Contact our insurance fraud lawyers today.