Understanding Insurance Fraud
What is Insurance Fraud?
Insurance Fraud is any fraudulent act committed with the intent to obtain an improper outcome from an insurance process. It occurs when someone knowingly lies to obtain a benefit they are not otherwise entitled to, or someone knowingly denies a benefit that is due, or is committed against a client during the sale or premium collection process.
Generally, the core elements of insurance fraud are knowingly making a material statement that is false and made in connection with a claim or payment.
The FBI reports that the insurance industry is comprised of more than 7,000 companies that collect over $1 trillion in premiums annually. The massive size of the insurance industry creates opportunities and bigger incentives for committing insurance fraud.
Examples of Insurance Fraud
Insurance fraud can occur in various ways. One of the most common examples of insurance fraud is when the insured makes a false or inflated insurance claim seeking compensation for losses that were not actually incurred or injuries that were not actually suffered.
Other examples of insurance fraud include:
- Premium Diversion
- Embezzlement of insurance premiums.
- When an insurance agent fails to send premiums to the underwriter and keeps the money.
- When a person purports to sell insurance, but does not hold a license to do so, then collects premiums and never pays on claims.
- Asset Diversion
- The theft of insurance company assets.
- This scheme involves acquiring control of an insurance company with borrowed funds then using the assets of the acquired company to pay off the debt, then diverting the remaining assets to the schemer.
- Fee Churning
- Commissions are taken through reinsurance agreements. The repeat commissions whittle the premium payment down until there is no longer money to pay on insurance claims.
- Individually each transaction appears to be legitimate. The fraud scheme is discovered only when the cumulative effect of many transactions is considered.
Insurance fraud can involve one person or involve large-scale fraud schemes involving many individuals and multiple entities.
Defending Against Criminal Charges
If you are facing charges for insurance fraud, you need an aggressive and experienced white collar criminal defense attorney on your side. Ashley D. Adams is a former fraud prosecutor with the United States Attorney’s Office. She understands how prosecutors operate. Given her prior work, she also has a longstanding and positive relationship with the U.S. Attorney’s Office, the Attorney General’s Office, and the Department of Justice. Put Ashley D. Adam’s experience to work for you.
We practice excellence, one client at a time.
The attorneys at Ashley D. Adams, PLC handle federal criminal cases throughout the United States, including Arizona, Oklahoma, Utah, and California.
The attorneys at Ashley D. Adams, PLC handle state criminal cases throughout Arizona including the cities of Phoenix, Scottsdale, Glendale, Mesa, Tempe, Ahwatukee, Maricopa, Gilbert, Peoria, Surprise, Goodyear, Litchfield Park, Avondale, Chandler, Casa Grande, Florence, Queen Creek, Deer Valley, North Pinal and Sun City as well as those living in and around Maricopa County, Pinal County, Pima County, Yuma County and Yavapai County.