Insurance Fraud is a Felony

7 What is Insurance Fraud? Fraud occurs when someone knowingly lies to obtain a benefit or advantage to which they are not otherwise entitled or someone knowingly denies a benefit that is due and to which someone is entitled. Referrals on suspected insurance fraud are handledby the California Department of Insurance (CDI) Enforcement Branch and may be prosecuted as a felony. The punishment for committing insurance fraud ranges from probation, fines, community service, restitution, confinement in county jail and/or state prison. According to the law, the crime of insurance fraud can be prosecuted when: • The suspect had the intent to defraud. Insurance fraud is a “specific” intent crime. This means the prosecutor must prove that the person involved knowingly committed an act to defraud. • An act is completed. Simply making a misrepresentation (written or oral) to an insurer with knowledge that is untrue is sufficient. • The act and intent must come together. One without the other is not a crime. • Actual loss is not needed as long as the suspect has committed an act and had the intent to commit the crime. No money necessarily has to be lost by a victim.