California has an insurance scheme that offers medical care and reimbursement for lost wages due to on-the-job injuries called workers’ compensation. When you provide inaccurate or false information to the insurance system to acquire ineligible benefits, you commit a fraud crime whose penalties, when convicted, include incarceration not exceeding five years. If the state accuses you of workers’ compensation fraud, the Long Beach Criminal Attorney can provide consummate legal representation.
A Quick Glance at Workers’ Compensation Benefits Fraud
California is among the states that operate a workers’ compensation insurance scheme that reimburses workers who fall ill or obtain injuries at the workplace or outside the workstation when performing duties for the employer's benefit. The scheme offers coverage for medical care and reimburses employees for lost salary, lost earning capacity, or disabilities, temporary or permanent. Your descendants obtain death benefits if you lose your life due to a work-associated illness or injury. The benefits will not bring you or the deceased back to life but will help the descendants live comfortably with the new circumstances.
It would help to know that once you claim benefits under this insurance scheme, you are limited to suing the employer in civil court. Additionally, the scheme adapts the no-fault doctrine, meaning the law does not require you to prove that the injuries were caused by the employer’s or a colleague’s negligence.
It is wrong to present a workers’ compensation claim that you are not qualified for, present misleading info, or submit an incomplete claim to defraud the insurance scheme. Apart from employees, business owners can also face fraud charges when they submit untrue statements to deny eligible candidates their rightful benefits. Other individuals that could face fraud charges under this insurance scheme are the health workers who collude with employees to lie about medical information to obtain insurance benefits for injuries or diseases that do not exist.
Different Statutes Addressing Workers’ Compensation Fraud
Various statutes outline workers’ compensation fraud and identify different criminally liable parties. These laws are:
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Insurance Code (IC) Section 1871.4
IC 1871.4 is the primary law focusing on workers’ compensation benefits fraud. The section defines workers’ compensation fraud as engaging in the following acts:
- Making or enabling another person to create or create for you false material or statement to acquire or deny workers’ insurance benefits.
- Submitting or facilitating another person to submit a deliberate fraudulent statement, orally or in writing, in favor or against a claim for workers’ compensation insurance benefits.
- Deliberately assist or facilitate another party or conspire to commit workers’ compensation fraud.
- Prepare or enable someone to prepare a deliberate false report regarding an employee's eligibility for insurance scheme benefits to dissuade them from pursuing a claim or benefits they are eligible for.
You should know that it is not only employees who lie to obtain undeserved benefits. Business owners can also be sued under this statute for fraud when they lie about the workers on their payroll, give false information about the work description, or mislead workers about their benefits to dissuade them from pursuing reimbursement.
What do employers gain from these actions?
As an employer, you do this because for every claim made to the insurance scheme by employees, your insurance premium increases, subsequently increasing your expenses and reducing your profit margin. However tempting it is to avoid increased premiums, knowing these actions make you guilty under IC 1871.4 is crucial.
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California PEN 550
PC 550 describes multiple forms of workers’ compensation fraud perpetrated by workers. Because part of the scheme’s benefits, like medical expenses, are paid through the insurance scheme, PEN 550 overlaps with medical services fraud. Under this subsection, it is illegal to:
- Knowingly prepare or facilitate another person to create a false insurance claim with the intent to acquire the insurance scheme’s benefits that cover medical bills.
- Deliberately present a claim for medical benefits or services provided in workers’ compensation scheme but were never used.
- Deliberately submit at least two claims for one medical service in the workers’ compensation insurance scheme.
Health service providers, employers, and employees can be guilty under this statute. Medical care practitioners commit insurance fraud when they independently present fraudulent claims or collude with applicants to submit fraudulent claims. The repercussions of a conviction for medical practitioners engaging in this form of fraud are devastating. They lose their practicing licenses provisionally or permanently, alongside the regular penalties provided for in this statute.
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California PC 549
Typically, workers and employers are charged for violations of PEN 549. You commit fraud under this law when you accept, lobby, or refer business from individuals or an entity you know or should have known is likely to engage in fraud.
Physicians and chiropractors are the most common individuals charged under this law.
Elements the Prosecutor Must Prove
When charged with fraud under any of these statutes, the prosecutor must demonstrate the following aspects to secure a conviction:
- You made an untrue or incomplete claim to the workers’ compensation scheme.
- You knew the claim was fraudulent.
- By defrauding the scheme, you aimed to derive undeserved financial benefits from the fraudulent claim.
The statements referred to in this statute include the information shared in the claim application, hospital records, medical reports, and evidence of lost earnings. A statement is deemed false in the following situations:
- The injury or illness does not stem from work.
- You never suffered any injuries.
- You exaggerated the severity of the harm.
- You failed to divulge details of an earlier injury.
- Previous injury claims were concealed.
- You filed a single claim under multiple business owners.
- You were still working while receiving insurance benefits.
In these cases, the prosecutor focuses on your intent and the materiality of the false statement. The fraud must have been intentional, not accidental. The false statements must also directly impact the compensation figure or claim approval.
Penalties for the Fraud
Workers’ comp fraud is filed as a felony or misdemeanor based on the claim’s value, your criminal record, and the nature of the case. Typically, a misdemeanor charge attracts no more than twelve months of jail incarceration. On the other hand, a felony attracts 24 to 60 months of prison incarceration and hefty fines.
The penalties you face depend on the law you are accused of violating, and they are as follows:
IC 1871.4 Violations
When you violate IC 1871.4, you face misdemeanor or felony charges. A misdemeanor conviction for the fraud crime will result in the following sentences:
- No more than twelve months in jail.
- Misdemeanor probation.
- Victim restitution.
- A court fine not exceeding $150,000 or twice the amount defrauded.
If the court finds you guilty of a felony violation, the punishment is as follows:
- Formal probation lasting for thirty-six to sixty months.
- Two, three, or five years of jail detention.
- Court-imposed monetary fines of $150,000 or twice the fraud money. The judge will instruct you to part with the largest figure of the two.
- Compensation for the victim.
When you look at these consequences, you notice a felony conviction results in jail instead of prison incarceration. This is because Assembly Bill (AB) 109 sentences non-violent felony offenses to jail incarceration to simplify the criminal record expungement petition for the defendant. If the court were to sentence you to prison, an expungement would be impossible.
PC 550 Violation Penalties
When workers’ compensation fraud applies to medical services, it is chargeable as a wobbler. If the prosecutor prefers misdemeanor charges, a conviction will lead to the following consequences:
- Informal probation.
- A twelve months jail sentence.
- Court fines of no more than $10,000 alongside or instead of incarceration.
If the state prefers a felony charge for violation of this statute and you are found guilty, the penalties you will face are:
- Three to five years of formal probation.
- Two, three, or five years of jail incarceration.
- No more than $50,000 in court-imposed fines or double the fraud money in question. The judge will instruct you to pay the largest fine of the two.
PEN 550 has its exemptions. If the fraud total in one year is no more than $950, you will be charged with a misdemeanor whose guilty verdict attracts at most six months in jail. At the Long Beach Criminal Attorney, we can negotiate with the judge to impose a $10,000 court fine instead of a jail sentence.
California PC 549 Violation Penalties
Most healthcare providers charged with workers’ compensation fraud are prosecuted under PEN 549. When the prosecutor files a misdemeanor charge, and you are found guilty, you face the following punishments:
- At most one year in jail.
- $50,000 court-imposed monetary fine or twice the figure you are accused of defrauding. You will be ordered to pay the most significant. The fine can be on top or in instead of jail incarceration.
A felony charge conviction, on the other hand, attracts a possible jail incarceration of sixteen to thirty-six months or the same court fine as that of a misdemeanor.
Professional Discipline
If you are a nurse, pharmacist, or doctor in Long Beach, you should take workers’ compensation fraud charges seriously because of the criminal and professional consequences. Doctors are subject to professional discipline when they commit an offense involving their professional qualifications, obligations, or functions. Workers’ compensation fraud is one of the crimes that attract professional consequences. Nurses and pharmacists also face practicing license suspensions for convictions on workers’ compensation fraud charges.
Possible Defenses
At Long Beach Criminal Attorney, we know cases of workers’ compensation fraud are prevalent and that the DA, police, and other authorities are working tirelessly to safeguard taxpayers, who are the biggest beneficiaries of the workers’ compensation scheme. Because of the alertness of authorities to these causes, a simple mistake while filing out the claim can be identified as insurance fraud, resulting in criminal charges. When wrongfully accused, our attorneys will work tirelessly to prove your innocence for charge dismissal or reduction. The viable defenses we will apply in the case are:
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Your Conduct Was Not Intended to Defraud
The DA secures a guilty verdict by showing you were aware the statement you were submitting for the claim was untrue and that you forged the application to commit fraud. You would not be guilty if you were unaware your behavior or statement would be deemed fraudulent or only engaged in fraud through a careless mistake or accident. It is common for applicants to make errors in their declarations, leading to arrests and prosecutions for offenses they never planned to commit. Thankfully, our defense attorneys will work aggressively to identify instances in your case that show your behavior was not deliberate or that you lacked knowledge that your conduct would be perceived as fraudulent. If you instill doubt about the evidence in the jurors, the charges will be reduced or thrown out.
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Inadequate Proof
The evidence the prosecutor presents before the court against you contains complex facts that are difficult to decipher. Looking at the evidence’s sheer volume, you will feel your case is entirely hopeless. However, the evidence can be inadequate to achieve the evidentiary standard of “beyond a sensible doubt “in criminal charges.
The Long Beach Criminal Attorney understands that evidence in fraud crimes is highly methodological, while medical records and diagnoses can differ, making it hard to prove the case. Ambiguity cannot secure a favorable ruling for the prosecutor. However, your legal expert can identify these weaknesses in the DA’s case to show the court that the evidence is insufficient for a guilty verdict.
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Business Owner’s Defenses
As an employer or business owner who faces charges of defrauding your workers of insurance benefits, you can maintain that the employees denied benefits are ineligible because they are independent contractors. With the help of your defense attorney, you can explain further that autonomous employees do not take orders directly from you and therefore do not qualify for the benefits.
Alternatively, when you are accused of defrauding the insurance scheme by reducing premiums, you can assert that the risks posed to employees on the job have reduced, hence the reason for the reduced insurance premiums. If the risks are high, insurance premiums increase. Therefore, citing the type of job a worker does and the reduced risk associated with it is a valid reason for lowering your premiums for the scheme.
Find a Knowledgeable Fraud Crimes Attorney Near Me
Workers’ compensation fraud attracts severe penalties upon conviction. Sadly, some of these convictions are founded on wrong or false accusations or honest, careless mistakes. However, with an aggressive defense, you can prove your innocence. At the Long Beach Criminal Attorney, we have the experience you need to fight the allegations and obtain a favorable outcome. Call us at 562-308-7807 to discuss your case.
