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Oct 12, 2020

Fraud Felony Laws in California

If you’ve been charged with fraud, or suspect that you’re under investigation for fraud, you likely have questions about fraud felony laws in California. As part of that discussion, it’s important to understand the landscape of California fraud-related laws and penalties.

The Big Picture

Fraud charges typically involve allegations of illegal activities done for financial gain. Fraud is called a “white collar crime” because those who are accused of fraud often have office jobs or are in management.

In California, fraud crimes can be sorted into six buckets: insurance fraud, real estate fraud, other financial fraud, forgery, mail fraud, and defrauding elders. Some fraud crimes are misdemeanors and some are felonies, but many are “wobblers.” This means that, depending on your criminal history and the circumstances of the crime, fraud can be charged as either a misdemeanor or a felony. Some types of fraud are also federal crimes, so you can be charged in federal court in addition to or instead of state court. That’s why, if you’ve been charged or are under investigation for fraud, it’s critical that you speak with an experienced Alameda County fraud attorney as soon as possible. The stakes are high, and you need a seasoned Oakland fraud lawyer at your side.

Following is a review of the different fraud felony laws in California.

California Insurance Fraud

In California, insurance fraud covers a wide range of activities. Section 548 of the California Penal Code makes it illegal to damage, destroy, or dispose of insured property with the intent to defraud the insurance company. For example, if Lucy hides her car in her boyfriend’s garage and then reports the car stolen, that’s felony insurance fraud. The same holds true if her boyfriend bashes in the doors and windows in order for Lucy to collect the insurance.

Under Penal Code Section 550, if Lucy submits multiple claims for legitimate damage, provides the insurance company with false information, or causes an accident in order to collect insurance, that’s also a felony. If convicted of any of these California insurance fraud crimes, Lucy faces two, three, or five years in prison and a fine of up to $50,000. In addition, the judge will tack on two years for each of Lucy’s prior insurance fraud convictions.

California Penal Code Section 550 not only applies to auto insurance fraud; it also applies to healthcare fraud. Let’s say that Lucy is a doctor and Jamon is her patient. Lucy can be charged with fraud if she bills Jamon’s insurance company or MediCal for treatments he didn’t receive, if she submits two separate claims for one procedure, or if she bills for a costlier service than the one Jamon received. Whether or not Lucy’s actions fall under fraud felony laws in California depends upon the dollar amount of the alleged crime. If the total is $950 or less, then Lucy is charged with a misdemeanor. However, if the total is more than $950, then she can be charged with either a misdemeanor or a felony. This is called a “wobbler.” If she’s charged and convicted of a felony, Lucy can be sentenced to two, three, or five years in prison and fined up to $50,000.

Other types of insurance fraud relate to the workplace, namely unemployment insurance fraud and workers compensation fraud. In the realm of unemployment insurance fraud, which is covered by Unemployment Insurance Code Section 2101, either employers or those claiming unemployment insurance can violate the law. For example, if Lucy files an unemployment claim and doesn’t report compensation she receives, falsifies her work search record, or double-dips in California and another state, then she can be charged with fraud. On the flip side, if Lucy is a business owner, she is liable for fraud if she lies about why an employee was let go. The same holds true if she deducts unemployment insurance from her employees’ paychecks but doesn’t forward those payments to the EDD. Lucy might be charged for violating the Unemployment Insurance Code or Penal Code Section 550. A felony conviction for that wobbler can lead to Lucy spending two, three, or five years in prison and paying up to $50,000 in fines.

If you’ve been charged with insurance fraud in Alameda County, time is not on your side. You need an Oakland fraud attorney who can convince the prosecutor that they don’t have the evidence needed to obtain a conviction. One strategy that your Alameda County fraud attorney might use is to undermine the prosecution’s contention that you intended to commit fraud. Because intent is necessary to prove the crime, the prosecutor’s case may fall apart.

California Real Estate Fraud

As with insurance fraud, there are several types of real estate fraud prohibited by California law. Real estate fraud can be prosecuted under different statutes, including Penal Code Sections 115 and 487, and Civil Code Sections 890 and 2945. Penalties for three of the four are wobblers, meaning they can be charged as either misdemeanors or felonies. Violations of the fourth, Penal Code Section 115, are always charged as felonies.

There are four primary types of real estate fraud:

Theft by False Pretense: Theft by false pretense is charged when someone makes false representations in order to get their property or money. Let’s say that Jamon is having a tough time making his house payment and Lucy says that she’ll make his house payment and he can continue to live in his home if he signs the title over to her. Once Jamon signs on the dotted line, Lucy begins the eviction process, and then collects the home’s equity. Lucy can be charged with grand theft, a violation of Penal Code 487. Grand theft is a wobbler, but because Jamon’s equity totaled more than $950, Lucy is charged with a felony. If convicted, she faces a sentence of 16 months, two years, or three years in prison.

Foreclosure Fraud: Foreclosure fraud is prohibited by Section 2945 of the California Civil Code. Let’s say that Jamon’s home is in foreclosure. He is scrambling when Lucy says that she’s a foreclosure consultant and can help. He sees her as a lifeline, but he isn’t able pay her high fee, so he feels compelled to sign over the deed to his home. Alternately, Jamon may believe that selling his home is his best option, and Lucy convinces him to give her the power of attorney to sell his home and then pockets the money. Foreclosure fraud is a wobbler, but if Lucy is convicted of a felony, she can spend 16 months, two years, or three years in prison, and can pay a fine of up to $10,000.

Forged Documents: California Penal Code Section 115 prohibits filing forged deeds and documents. Let’s say that Lucy didn’t try to convince Jamon to sign over his deed or give her power of attorney, but instead convinces Jamon’s sister to sign one document or the other. Lucy then files it with the Alameda County Recorder’s Office. If she is arrested, she will be charged with a felony. If convicted, she can face up to three years in prison and a fine of up to $10,000.

Rent Skimming: California Civil Code Section 890 prohibits “rent skimming,” which can involve buying property, renting it out, and pocketing the rent money instead of paying the mortgage. Rent skimming is also the term used when someone pretends to be the property owner or agent and rents out someone else’s house, apartment, or duplex. Let’s say Linda tells Jamon she owns a house. He offers to rent it, gives her a deposit and the first month’s rent, and then pays her month after month. Linda takes the money and Jamon never suspects a thing – until the actual homeowners come knocking. If Linda takes five or more payments, she can be charged with a crime. Rent skimming is a wobbler, but if she’s convicted of a felony, she faces 16 months, two years, or three years in prison, along with a fine of up to $10,000.

Charges of real estate fraud in Alameda County are serious business. You need an experienced Oakland fraud attorney by your side. There are a variety of ways that they can work to achieve the best possible outcome for your case. For example, they can use their knowledge of the Alameda County criminal justice system to get the charges dropped. They can work with the prosecutor’s office to obtain a favorable plea agreement. If necessary, they can mount a rigorous defense and prevail at trial. They can convince a judge that you deserve probation in lieu of prison time. Without an Alameda County fraud attorney, you are at the mercy of the District Attorney’s office. With an experienced lawyer, you can remain in the driver’s seat.

California Credit Card Fraud

California Penal Code Sections 484d through 484j outline the crimes and penalties associated with credit card fraud. Many of the crimes are wobblers, and whether they’re charged as misdemeanors or felonies often depends upon the dollar amount involved. If the activity involves $950 or less, it’s typically charged as a misdemeanor. If it’s more than $950, it’s charged as a felony. California credit card fraud laws cover a variety of circumstances, including:

Stolen Credit Cards: Stealing or buying the stolen credit cards of four or more people, or keeping the credit card number of someone without their consent, is charged as grand theft. While grand theft is a wobbler, a felony conviction carries a penalty of 16 months, two years, or three years in prison.

Forged Credit Cards: Let’s say that Lucy makes a counterfeit credit card, or uses a fake credit card when buying a new wardrobe and signs a fictitious person’s name on the sales slip. She can be charged with forgery, which is a wobbler. If she’s convicted of felony forgery, she can be imprisoned for up to three years.

Fraudulent Use: If Lucy buys a new dining room set using a credit card she knows to be stolen, counterfeit, or expired, she can be charged with theft. If the prosecutor can prove that she’s used the card to purchase more than $950 worth of goods and services over the previous six months, then they can charge her with grand theft. A conviction carries a penalty of 16 months, two years, or three years in prison.

Retailer Misuse: Let’s say that Lucy owns a restaurant and keeps copies of customers’ credit card information in order to submit fake charges to the card issuer for payment. If the amount of fake charges totals more than $950 over a six-month period, then she can be charged with grand theft. A felony conviction can result in 16 months, two years, or three years in prison.

Counterfeit Credit Cards: Designing, creating, possessing, or trafficking in credit card making equipment is a wobbler, with a felony conviction carrying a sentence of 16 months, two years, or three years.

Felony fraud laws in California are serious business, and an Alameda County fraud conviction can result in significant prison time. It pays to have an experienced Oakland fraud attorney fighting for your freedom and your future. If you’ve been arrested for fraud or believe that you are being investigated for fraud, call Silver Law Firm today. You don’t have a minute to waste. Call for a free, no-obligation consultation.

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