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.