Insurance Fraud Laws & Charges

The crime of insurance fraud takes place when an individual deliberately deceives an insurance company in an effort to collect money that they are not entitled to. This particular type of fraud is a serious crime within all fifty states, and many of these states have actually established fraud bureaus in an effort to investigate and identify fraud incidents as quickly and efficiently as possible.

Insurance companies are also capable of committing the act of insurance fraud when they improperly deny a policy holder or healthcare provider the money or compensation that they are due. Fraudulent claims in the insurance sector are very serious, and can affect the entire of society as a whole - not just individual policy holders and insurance companies. The reason for this is that the costs incurred by insurance companies resulting from fraudulent activities lead insurance premiums to go up and up over the course of time.

In Massachusetts, insurance fraud is covered by Section 111A of Chapter 266 of the Massachusetts General Laws.

Examples of Insurance Fraud

One important thing to recognize about insurance fraud, is that it can occur in a number of different ways. After all, there are different forms of insurance available for any individual, from car insurance, to life and health insurance.

Some types of insurance fraud in Massachusetts include:

  • Healthcare insurance fraud, which takes place when a business or person defrauds a health insurance provider. In some cases, a person might claim to have a false injury in order to obtain prescription medication or payments. This type of fraud can also occur when a healthcare provider attempts to submit a claim to a health insurance provider for procedures that they did not actually perform.
  • Medicaid fraud - Someone who is not qualified files a claim successfully due to fraud.
  • Car insurance fraud, which takes place when a person either fabricates or exaggerates a claim made to the automobile insurance provider company. For instance, people might indicate that the level of damage they suffered from in an automobile accident was much greater than it was in reality in order to obtain a larger payout.
  • Life insurance fraud, which takes place when an individual attempts to obtain life insurance payments from a business or company by faking own death, or faking the death of another person. For instance, a person who deliberately forges the death certificate of a family member has committed fraud.
  • Property insurance fraud, which takes place when individuals cause damage to their own property, business, or home, to obtain a payout that is worth more than the damage caused. For example, a business owner who sets fire to his shop will have committed property insurance fraud.
  • Workers' compensation fraud - Someone files a claim to the insurance company that he or she was injured while at work although this is not true, sometimes with the connivance of the employer.
  • Disability benefits fraud -Someone files disability claims that are fictitious.
  • Unemployment insurance fraud - Someone files a claim although he or she is actually employed.

Insurance Fraud Punishment

When it comes to punishing the crime of insurance fraud, it's worth noting that most courts will determine the specific penalty based on the severity of the fraud in question. Most of the time, insurance fraud can be divided into two categories which are known throughout the industry of hard fraud and soft fraud. Soft fraud actions take place when people exaggerate their existing legitimate claim. On the other hand, hard fraud takes place when a person either deliberately causes or fabricates the loss that they claim to have experienced for the purpose of obtaining insurance payments from their policy.

In Massachusetts, insurance fraud is punishable by imprisonment in a state prison of not more than five years or imprisonment in jail for six months to 2.5 years, or a fine of $500 to $10,000, or both jail time and fine.

Insurance Fraud Defenses

Fraud may be a severe crime in Massachusetts, but that doesn't mean that there aren't ways that you can defend yourself against a charge. Some common defenses include:

  • Insufficient evidence, wherein your attorney proves that there is not enough proof available to suggest that you were either involved in the crime to begin with, or that the crime even took place. If evidence cannot be produced to prove a case, then that case is likely to be dropped completely.
  • Lack of intent - Fraud includes any action that is intended to deceive another person or party. In other words, for a fraud conviction to be successful, there needs to be a way to prove that the person who allegedly committed fraud did so with a full understanding of his actions, and intent to defraud someone.
  • Non fraudulent statement - Sometimes, insurance fraud that occurs as a result of a false statement is not necessarily intentional fraud. In order for fraud to have taken place, the misleading statement given to the company needs to relate to an existing fact. Mere expressions of opinions are not considered as fraud.
  • There are also a number of other fraud defenses that you might be able to use depending on the circumstances of your case - the best solution is typically to discuss your situation in depth with the lawyer that is responsible for your case.

What to Do If You Have Been Charged

Massachusetts state law prohibits fraudulent claims against insurance as mentioned above. A conviction of this crime can lead to a substantial fine and some time in jail or state prison. However, an experienced criminal defense lawyer may be able to seek dismissal or reduction of your charges by assessing the various issues surrounding your particular case.

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