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Under California law, fraud is the misrepresentation of facts by an individual or institution, which leads to an undeserved benefit to the perpetrators while the victim suffers loss or harm. The motives for fraud are usually to get away from criminal responsibility and to gain financially but can also include the transfer of authority or official favors. Fraud crimes are also known as white collar crimes and involve some degree of deceit or breach of trust.
The crimes are usually non-violent but could attract serious penalties, including huge fines, lengthy prison terms, and even collateral consequences beyond the statutory punishment. Fraud crimes are violations against the federal government and also the state of California, meaning that they can be punished by both the state courts and also the federal government courts exposing you to more penalties. Below, our firm will elaborate on the various California Fraud Crimes.
Types of California Fraud Crimes
California Financial Fraud Crimes
Financial fraud is a form of larceny, and it occurs when one uses money or property belonging to another entity in an illicit manner with the aim of gaining from it. It is distinguished from common theft or robbery since it involves some degree of subterfuge or deceit. Examples of common financial fraud crimes include;
California Credit Card Fraud - This is the fraudulent use of a debit or credit card or the account information held in such a card resulting in a loss to the card owner and undeserved gain to the perpetrator. It may include using a revoked or expired credit card, trading fake credit cards, or using an unauthorized credit card. The California Penal Code 484e, 484f, 484g, 484h, and 484j PC prohibits various fraudulent activities involving credit and debit cards including altering, forging, counterfeiting, stealing or publishing a credit/debit card, or its information. Credit card fraud is penalized as petty theft, grand theft, or forgery.
California Check Fraud - California Penal Code 476 PC, California’s check fraud law punishes the acts of making, using, possessing, or any attempts to make or use a check intending to defraud the payee by presenting the check as genuine. For instance, changing the amount of a check, making a fake check or forging the payer’s name could all pass as check fraud. Check fraud is punishable by between one (1) to three (3) years in jail, or a fine ranging between a thousand ($1000) dollars to ten thousand ($10,000) dollars.
California Securities Fraud - It is additionally known as investment or stock fraud and is the practice of influencing investors to buy and sell stocks or investments based on false information. Examples include misquoting a company’s stock value, changing the financial statements of a business, or insider trading. Typical perpetrators of this kind of fraud are stock traders, accountants, or promoters. Subject to your case circumstances and your past criminal record, a conviction for California securities fraud can be punished as a felony or a misdemeanor. This situation is commonly referred to as a wobbler. A conviction for securities fraud attracts serious consequences, including jail terms and huge fines.
California Insurance Fraud
Insurance fraud occurs when you falsify your insurance policy information in an attempt to obtain payments undeservedly as defined under the California Insurance Code, Section 1871. There are varying levels of insurance fraud, including small fabrications to significant types of fraud particularly arson, theft, property destruction and faking injuries or accidents in a bid to obtain payments as per the insurance policy. The following California laws prohibit various types of insurance fraud, the California PC 550(a) (1) punishes anyone who purposefully presents an invalid insurance claim aiming at obtaining unlawful gain while the California PC 550(b) (1) prohibits the act of making any false statement of a material fact while filing your insurance claim.
California Health Care Insurance Fraud - This kind of fraud is also referred to as health insurance fraud, Medicare fraud, medical insurance billing fraud, or medical fraud. Laws barring most forms of this kind of fraud are found on Penal Code 550(a) PC. Perpetrators of health care insurance fraud are mostly medical practitioners such as nurses or doctors, equipment suppliers, and hospital employees. Charges could be filed against you for billing medical services that were never offered, ‘up-coding’ or billing higher rates than you actually offered, or for submitting a duplicate claim for the same service offered to the patient.
California Motor Vehicle Insurance Fraud - This includes any incidence of California criminal fraud that covers automobile or car insurance. Most of these car insurance fraud crimes are felonies as per California state laws, but some like submitting false claims or those committed by auto shops are wobblers; thus, they could be punished as felonies or misdemeanors. You might be arrested for breaking the California motor vehicle insurance fraud code when you engage in acts like inflating the costs of a claim, reporting your car stolen, or staging an accident to obtain money fraudulently from an auto insurance service provider. Laws barring major forms of California insurance fraud include; Penal Code 584 PC abandoning or damaging a vehicle, Penal Code 550 PC fraudulent or multiple claims, Penal Code 550 PC (a) (3) PC causing an accident to present a false claim, and Penal Code 550 PC subsections (b) (1-4) which prohibits the acts of preparing or presenting false claims.
California Unemployment Insurance Fraud - This kind of fraud occurs anytime a person makes a willful and illegitimate claim to obtain, increase, defeat, or reduce any benefit under the federal or state unemployment insurance programs. In California, Unemployment Insurance services are provided through the Employment Development Department, which is also the agency mandated to conduct alleged unemployment insurance fraud investigations. The California Penal Code generally prohibits this kind of fraud while the California Unemployment Insurance Code specifically regulates Unemployment Insurance Fraud.
California Medi-cal Insurance Fraud - This kind of fraud is similar to the California health care insurance fraud in that most acts against the Medi-cal insurance fraud laws in California are also violations against the health care insurance fraud laws. Medi-cal fraud is any fraudulent act against the California Medi-cal program, which is a state-sponsored program for providing free or low-cost health services to disadvantaged children and adults. Medi-cal fraud is prohibited by several California statutes including the Welfare and Institutions Code 14014, the Welfare and Institutions Code 14107, the Welfare and Institutions Code 14107.2 and the Penal Code 550 PC.
California Workers Compensation Fraud - Workers compensation fraud is insurance fraud touching on the worker's compensation insurance program. Under this program, California employers are required to pay for insurance to cover workers against loss of work due to job-related injuries. Instances of fraud against the worker's compensation program include; claims that a non-work injury is work-related, failure to disclose an earlier injury that is relevant to your claim or faking an injury. Workers compensation fraud is prohibited under several California laws; the Insurance Code 1871.4, the Penal Code 550 PC, and the Penal Code 549 PC. California law also provides heavy civil fines for certain forms of workers compensation fraud.
California Welfare Fraud - The California Welfare program generally refers to public assistance programs, designed to help unemployed and underemployed persons. Welfare fraud happens when people fail to disclose important information or make false statements when applying for these public welfare programs, aiming at benefiting undeservedly. Welfare fraud in California can be of two types as addressed by the California Welfare and Institutions Code 10980 WIC: recipient fraud or internal welfare fraud. Recipient fraud happens when you provide false information with the aim of obtaining benefits that you do not legitimately deserve while internal fraud occurs when a government employee influences the distribution of benefits to ineligible recipients. Welfare fraud in California is a wobbler, with the prosecuting attorney maintaining the discretion to file the charge as a misdemeanor or a felony.
California Real Estate and Mortgage Fraud
Real estate fraud is a subsection of California criminal fraud, and it involves fraud that happens within the real estate industry. It may include fraud on; foreclosures, also known as foreclosure fraud, mortgages also called mortgage fraud, rental property done through rental skimming, fake deeds, and property flipping. Most of these forms of real estate fraud are punishable under the Penal Code 487 PC which is California’s grand theft law but other forms including rent skimming, foreclosure fraud and faking deeds are prosecuted under their own real estate fraud statutes which are Civil Code 890 for skimming rent, Civil Code 2945.4 for foreclosure fraud and Penal Code 115 PC for presenting forged deeds.
The following are some of the most prevalent forms of real estate fraud.
California Foreclosure Fraud - Foreclosure fraud is said to have occurred when you- probably being a ‘foreclosure consultant’-represent that you are able to prevent or postpone a forthcoming foreclosure. Generally, this kind of fraud occurs anytime a fraudulent act is committed on a home in the process of foreclosure or one that is foreclosed. The code for this offense is set out under the California Civil Code 2945 and 2945.4.
Predatory Lending Schemes - This is a crime that occurs when a lender manages a loan transaction to obtain a maximum profit for their own good without considering whether the borrower able to pay the loan. Most illegal schemes feature target marketing to households based on discriminatory and illegal practices, such as ethnicity, gender, or race, that are not related to creditworthiness. They also apply unreasonable and unjustifiable loan terms that ensure the lender earns maximally from the loan transaction at the expense of the borrower.
California Laws against Forging and Presenting Deeds - The California Penal Code 115 PC punishes the crime of knowingly filing, registering, or recording a forged or false documents with a state office. Here, the prosecutor has to prove the following elements of crime in order for you to be guilty of this crime. They have to prove, first, that you either presented a forged document to be filed in a state office in California or that you caused a forged document to be filed in a state office in California. Secondly, the prosecutor needs to show the court that you were well aware that the document was forged and lastly, they have to prove that the document was one that, were it to be genuine, it could have been filed or registered in a California state office.
California Rent Skimming Laws - These laws are contained under the California Civil Code 890. Rent skimming entails renting out a property that you have no rights to and using the proceeds for your own purposes or collecting rental income without paying your obligatory debts. This is generally a civil crime, subjecting you to only fines. Nevertheless, engaging in this type of offense with more than five properties within a two-year time frame could have you criminally prosecuted.
California Phantom Help Schemes - Phantom help schemes are particularly banned under California’s foreclosure fraud code, Civil Code 2945.4. This type of real estate fraud, also called ‘phony counseling’ is the most common form of California real estate fraud. You may the for violating foreclosure laws by perpetrating the following California phantom help schemes; by convincing a homeowner to directly pay their mortgage to you as a ‘consultant’ claiming that you can intervene to have the bank slow down or terminate the process of foreclosure, If you as a mortgage consultant charge fees to a homeowner to delay or prevent possible foreclosure and you end up doing little or nothing towards this, or by selling a home that is pending foreclosure to a buyer who is unaware of the upcoming foreclosure.
Illegal Property Flipping - Property flipping in California is generally a legal business practice aimed at making a profit when you buy property below market value, revamp it, and sell it at a profit. Illegal property flipping in California law can thus be said to occur when one creates fraudulent loan documents or appraisals to justify an exaggerated asking price. Individuals who are most likely to be involved in illegal property flipping may be investment property buyers, straw buyers, real estate brokers, real estate appraisers, and mortgage brokers.
California Straw Buyer Schemes - In this kind of scam, a broker or a real estate agent convinces a ‘straw’- a person with good credit ratings, to apply for a mortgage on behalf of another person who allegedly cannot access a loan due to their poor credit ratings. After the loan is granted, the agent and their counterparts collect the money and flee. The straw person is left with a mortgaged property that might be foreclosed if they do not service the loan, which is, unfortunately, the case mostly. They lose their good credit ratings, and they might even be forced to declare bankruptcy as well as face possible criminal charges.
California Forgery and Identity Fraud
The state of California defines identity theft under the California Penal Code 530.5 PC as the act of obtaining another person’s personal identifying information for your own use in a fraudulent manner, and since forgery involves faking one’s identity, this crime does not only break the California fraud code but also violates California’s identity theft and forgery code as well. Some fraud crimes that are listed under this category include;
California False Personation Law - If you pose as another person with the aim of causing a loss to them or securing a benefit for yourself, you could be charged for violating California False Personation Laws. Examples include obtaining welfare benefits using another person’s name or signing as the payer to a check owned by someone else and trying to cash it.
California Laws on Possessing a Fraudulent Public Seal, Forging, and Counterfeiting - The California Penal Code 472 PC is California’s code that prohibits the act of forging a public seal or counterfeiting a design or emblem, for instance, the state seal on the identification card. This offense is charged as a felony or a misdemeanor according to the crime facts and the criminal record of the defendant.
California Internet Fraud - Internet fraud, also referred to as cybercrime means any kind of fraud that is committed over the internet. Such fraudulent activity includes fraudulent online purchases, making and forwarding a computer virus, or violating California code on cyber-stalking.
California Laws on Forging an ID card or Driver’s License - Altering a government-issued ID card or driver’s license could have you face the judge for identity theft. The term government here also means any other State or country’s legally recognized government. Being in possession of a counterfeit or fake ID card or driver’s license is also against California’s fraud code.
California Fraud Crimes against Elders
The state of California defines elders as people aged 65 years or older and has laws that deal specifically with fraud committed against elders or seniors. They are;
California Nursing Home Fraud - Acts of financial exploitation or abuse against elders in nursing homes are punished as fraud crimes. Such acts include overcharging for elder’s care, forging an elder’s name on a check, or influencing an elder to hand over their property to you as a nursing home employee.
California Seniors Fraud - Also commonly referred to as financial elder abuse, it is the theft or embezzlement of money or other property belonging to an elder. It is prohibited under the California Penal Code 368(d) and 368(e) PC. The penalty for this offense is largely dependent on the value of money, property, or services that were illegally obtained. You face a misdemeanor if the value falls below $950 or a California wobbler for values above $950, meaning that the prosecutor will choose whether to charge you with a misdemeanor or a felony senior’s fraud.
Other California Fraud Crimes
Other commonly prosecuted California fraud crimes include:
California Gambling Fraud - California Penal Code 332 PC punishes anyone found guilty for obtaining another person’s property or money using card games, tricks or scams. Like other California theft crimes, gambling fraud is punished based on the value of property or money obtained fraudulently.
California Telemarketing Fraud - This kind of fraud involves using a fraudulent business scheme purporting to sell something. It is punished under the Business and Professionals Code 17511.9 BPC. Possible defenses could include that you were not a salesperson, you did not commit a fraudulent act, you were arrested unlawfully, or that the search and seizure was conducted illegally.
California’s Laws on Fraudulent Vehicle Registration Stickers - Knowingly altering vehicle registration stickers, license plate, or registration card in an effort to gain financially or avoid paying the DMV fees could land you in jail. The California Vehicle Code 4463 punishes this crime either as a misdemeanor or a felony depending on the crime facts and defendants criminal record.
California Handicapped Parking Fraud - California Vehicle Code 4461 VC is the law against misusing a disability parking license plate or placard. It prohibits lending it to someone else or displaying a canceled plate or placard, and parking in a disabled parking space while you are not disabled.
California Mail Fraud - This kind of fraud is a federal crime and prohibits any fraudulent act that uses federal postal services to commit a fraud crime. Examples may include; sending a fake check via the mail, failure to deliver an item ordered using the mail or using the mail to advertise fraudulent services.
Find a San Diego Criminal Defense Attorney Near Me
It is fortunate that there exists a number of California Legal Defenses that an experienced defense lawyer can present on your behalf if you are facing charges for any of the above fraud crimes. A San Diego Criminal Attorney firm lawyer is in a position to defend you in court while offering affordable and competitive rates for our services. You can reach us at 619-880-5474. We serve all areas near San Diego, California.
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