Fraud (PC 484):
A person who commits an act that results in unfair or undeserved benefit for yourself and/or causes loss or harm to another person, then you have violated California’s criminal fraud laws. Generally, there are two main motives for violating the statute: financial gain and/or to escape criminal culpability.
Penalties (PC 484):
Many California fraud cases are wobbler offenses, giving the prosecutor the discretion whether to charge it as a misdemeanor or felony; the decision largely depends on the facts of the case and your criminal record. Some are treated as automatic felonies and a majority of offenses are federal crimes, subjecting you to both state and federal courts, which in turn subject you to increased penalties. In addition, California fraud convictions subject legal resident aliens to deportation or removal.
Legal Defenses (PC 484):
There are a variety of ways to defend fraudulent cases. The best case scenario is to prove to the court that you did not have fraudulent intent. If didn’t intend to commit a fraud, you cannot be guilty of committing fraud.
1. California Insurance Fraud Offenses
You commit California insurance fraud when you attempt to obtain insurance payments or benefits to which you are not otherwise entitled. Examples of California insurance fraud include violations of
1.1. California’s automobile insurance fraud laws
You violate California’s automobile insurance fraud laws when you attempt to obtain money fraudulently from an auto insurance carrier by engaging in acts such as
- “staging” an accident,
- inflating the price of a claim, or
- setting fire to your vehicle and reporting it stolen.
1.2. California’s health care insurance fraud laws
Doctors, pharmacists, medical equipment suppliers and hospital employees are just some of the players that may be involved in violating California’s health care insurance fraud laws. Examples of these types of violations include (but are not limited to):
- charging for medical services that were not provided,
- receiving “kickbacks” for prescribing certain drugs,
- engaging in California doctor shopping or prescription fraud by securing multiple prescriptions for the same drug, and/or
- double billing or over-billing for services rendered.
1.3. California’s Medi-Cal insurance fraud laws
Most acts that violate California’s Medi-Cal insurance fraud laws are simultaneously violations of California health care fraud. For example, a doctor who bills Medi-Cal (California’s health insurance program for low income people) for services he/she did not perform, commits Medi-Cal fraud as well as the more generic crime of health care fraud.
1.4. California’s unemployment insurance fraud laws
California’s unemployment insurance fraud laws prohibit intentional attempts to increase, reduce or deny an unemployment insurance benefit. Examples include (but are not limited to):
- falsifying your work-search efforts,
- collecting benefits in two or more states, and
- intentionally providing false information about why an employee was terminated…or about his/her wages…to avoid contributing to the unemployment insurance program.
1.5. California’s welfare fraud laws
You violate California’s welfare fraud laws when you try to obtain or increase welfare benefits to which you are not legally entitled. There are two types of California welfare fraud:
- recipient fraud (which includes trying to secure fraudulent benefits), and
- internal fraud (where an employee of a government agency that distributes welfare benefits attempts to collect or distribute unlawful benefits from that agency).
1.6. California’s workers’ compensation laws
You violate California’s workers’ compensation laws when you try to make a fraudulent claim against this state’s workers’ compensation insurance program. Examples of this type of fraud include (but are not limited to):
- faking an injury (or exaggerating the extent of the injury),
- claiming that a non-work injury is work-related, and
- failing to disclose a prior injury that would be relevant to your current claim.
2. California Real Estate & Mortgage
California’s real estate and mortgage fraud laws punish any deliberate false representation that is made in connection with any portion of a real estate transaction.
The most common examples of real estate and mortgage fraud include (but are not limited to):
2.1. California foreclosure fraud
California foreclosure fraud is one of the most frequently prosecuted types of California real estate fraud. In simple terms, foreclosure fraud takes place when a person…often a self-proclaimed foreclosure “consultant”…represents that he/she can postpone or prevent a pending foreclosure. More generally, you commit this type of fraud anytime you engage in a fraudulent activity that has to do with a foreclosed home or a home that is involved in the foreclosure process.
2.2. California’s laws against forging deeds
Forgery is defined as knowingly altering, creating or using a written document with the intent to commit a fraud. As a result, California’s laws against forging deeds prohibit
- attempting to file, register or record a forged deed, and/or
- filing a forged deed.
2.3. California predatory lending schemes
Predatory lending refers to unlawful practices by banks and other lending institutions that take advantage of unsuspecting borrowers. Simply put, you violate California’s laws against predatory lending when you…as a lender…manage a loan transaction to extract the maximum value for yourself without regard for the borrower’s ability to repay the loan.
2.4. Illegal property flipping in California
Property flipping is generally a legal practice. It typically involves a buyer who purchases a property below market value, upgrades it and then quickly sells it for a profit.
Illegal property flipping in California…a violation of California’s real estate and mortgage fraud laws…occurs when you create fraudulent appraisals and/or loan documents to justify an inflated asking price.
2.5. California’s rent skimming laws
You violate California’s rent skimming laws when you
- use rent proceeds from your residential rental property at any time during the first year after acquiring the property without first applying that amount to your mortgage, or
- rent a property that you don’t own or have the authority to rent and collect the rent for your own use.
Generally, rent skimming is a civil offense, subjecting you only to fines. However, if you engage in rent skimming with five or more properties within in any two-year period, the acts will be prosecuted criminally as well.
2.6. California straw buyer schemes
California straw buyer schemes wreak havoc on those deemed the “straws”. These individuals are recruited by real estate agents or brokers because of their good credit. The professional convinces the straw to use his/her information to secure a loan for another buyer…or even a fictitious buyer…who allegedly can’t acquire the loan because of poor credit.
Once the loan is processed, the agents…and any other players such as a mortgage broker…collect the loan money and run. The straw is then left responsible for the mortgage, which ultimately causes him/her to generally declare bankruptcy and face possible criminal charges.
2.7. California phantom help schemes
California phantom help schemes are specifically prohibited under California’s foreclosure fraud law. There are three types of phantom help schemes:
- A so-called “foreclosure consultant” or “mortgage modification specialist” charges a homeowner who is facing foreclosure a fee to delay or prevent the foreclosure process when he/she in fact does little or no work towards this goal,
- A seller markets a home that is pending foreclosure to an unsuspecting buyer who is unaware of the foreclosure. The “seller” collects a down payment and delivers a fake or unrecorded deed that does not convey any title to the property.
- A “consultant” convinces the homeowner to make his/her mortgage payments directly to the consultant who claims that he/she will serve as a liaison between the homeowner and the bank in an effort to slow or stop the foreclosure process.
3. Generic Types of California Financial Fraud
There are a number of generic California fraud offenses that involve undeserved financial gain. Some of the more prevalent offenses include
3.1. California check fraud
You commit California check fraud by making, using or possessing…or attempting to make or use…a check when you
- intend to defraud the payee, and
- reveal that intent by representing the check to be genuine.
This is not the same as California’s bad checks law which prohibits passing or attempting to pass a check knowing that there are insufficient funds to cover the full amount of the check. Trying to pass a check in violation of California’s bad checks law also constitutes California check fraud.
3.2. California credit card fraud
California credit card fraud, not surprisingly, involves any fraudulent transaction that is made or attempted with respect to a credit or debit card or with the account information that is linked to a credit or debit card.
Typical examples of this offense involve
- using someone else’s credit card without their authorization,
- selling counterfeit credit cards, and/or
- using your own credit/debit card knowing that the card is expired or has been revoked.
3.3. California securities fraud
California securities fraud …also known as stock fraud or investment fraud…involves practices that encourage investors to make decisions based on false information. This type of fraud can include stealing from investors, misstating a company’s value or even counterfeiting or altering a company’s financial statements.
- Stock traders,
- accountants, and
are the typical players that are involved in these types of schemes.
4. Forgery and Identity Theft
Forging any type of document is a fraudulent offense. And because many forged documents have to do with one’s identification, these types of offenses not only violate California’s fraud laws but California’s forgery laws and California’s identity theft laws as well.
Some of the most common types of fraud offenses that fall under these categories are listed below.
4.1. California’s laws against forging, counterfeiting or possessing a fraudulent public seal
California’s laws against forging, counterfeiting or possessing a fraudulent public seal prohibit just that. What’s interesting is that this crime is not limited to California seals. You can be convicted of this offense for engaging in any of the above activities with respect to any public seal, whether it is the seal of any government, government agency or corporation.
And if you violate this law by forging a public seal on a document that lends you someone else’s identity, you violate California’s identity theft law as well.
4.2. California’s laws against forging or counterfeiting a driver’s license or
Similarly, if you violate California’s laws against forging or counterfeiting a driver’s license or ID card…and you assign yourself a different name…you would also be guilty of identity theft. However, it isn’t necessary that you commit identity theft in order to violate this law.
All that is required under this California fraud offense is that you alter a government issued driver’s license or ID card…again, any government will do, this law does not exclusively pertain to California-issued cards…or make a counterfeit one.
And it is important to note that possessing a fake or counterfeit driver’s license or ID card is also a violation of California’s fraud laws.
4.3. California’s False Personation Law
You violate California’s false personation law when you pose as another person in order to secure a benefit for yourself and/or to harm the other individual. This is a clear violation of California’s identity theft law.
Common examples include
- signing someone else’s name to a check and trying to cash it as if you’re that individual…which is also a violation of California’s check fraud law, or
- using someone else’s name to obtain welfare benefits…which is also a violation of California’s welfare laws.
Oftentimes this type of offense takes place over the Internet – common examples include
- using someone else’s credit card to make an on-line purchase, or
- posing as someone in an on-line “chatroom” or by hacking into someone else’s social networking profile.
Both of these examples are also examples of California Internet fraud, discussed below.
4.4. California Internet fraud
California’s Internet fraud laws prohibit any fraudulent activity that takes place on a computer, such as in a chat-room, e-mail, or on-line store.
- Making fraudulent on-line purchases,
- creating or forwarding a computer virus, and/or
- violating California’s cyberstalking laws
are all examples of California Internet fraud.
5. California Fraud Offenses Involving Elders
There are also a number of California fraud offenses that specifically deal with seniors. These include
5.1. California senior fraud
You violate California’s elder abuse laws when you emotionally, physically or financially abuse an elder…that is, a person 65 years or older. When this type of abuse is financial, it typically qualifies asCalifornia senior fraud.
Examples of the types of schemes that frequently qualify as financial elder abuse include (but are not limited to):
- telemarketing schemes,
- credit repair schemes,
- home repair schemes,
- funeral and cemetery senior fraud, and
- real estate predatory lending elder abuse.
5.2. California nursing home fraud
Like elder abuse, nursing home abuse can be physical, emotional or financial. Instances of financial abuse are considered acts of
California nursing home fraud. This type of fraud can include acts such as
- being an employee of the facility and convincing one of the elderly residents to sign over his/her property to the employee,
- overbilling for care, and/or
- forging the elder’s name on a check.
6. Miscellaneous California Fraud Offenses
Finally, there are a few other miscellaneous commonly prosecuted California fraud offenses worth mentioning.
6.1. Mail fraud
Mail fraud is actually a federal offense. It includes any fraudulent activity that utilizes the postal system during the commission of the offense. This means that if, for example, you
- use the mail to advertise fraudulent services,
- send a forged check through the mail, or
- intentionally fail to deliver a product that was ordered through the mail,
you may be convicted of mail fraud.
6.2. California handicapped parking fraud
You commit California handicapped parking fraud when you illegally use, misuse or lend to another person a handicapped parking placard. There are a variety of ways you can commit this offense, including (but not limited to):
- using someone else’s placard to park when you are not disabled…and the true owner of the placard is not with you,
- lending your placard to someone who isn’t entitled to use such a placard, or
- displaying a fake, forged or expired handicapped placard.
6.3. California’s law against fraudulent vehicle registration stickers
If…in an effort to secure a financial gain and/or to avoid paying DMV taxes or fees…you intentionally interfere with
- a license plate,
- registration stickers, or
- a registration card,
you are guilty of violating California’s law against fraudulent
registration stickers. And…depending on how you interfere with these items…you could face additional charges for violating California’s law against forging, counterfeiting or possessing a fraudulent public seal.