California’s Criminal Fraud Laws
Violations of California’s criminal fraud laws occur anytime you commit an act that results in an unfair or undeserved benefit for you, or cause loss or harm to another person. Fraudulent acts are usually motivated by the desire to escape criminal charges or for financial gain. However, California penalizes a wide variety of acts as fraud, even some that are not linked to financial gain or beating criminal charges.
Since fraud is thought of as a California white-collar crime, California fraud offenses can lead to prison sentences and high fines. Penalties vary widely. Many fraud crimes have specific penalties such as automatic felony charges, while others are California wobbler offenses (a “wobbler” is a crime that prosecutors may charge as either California misdemeanor offenses or California felony offenses depending on your criminal history and the facts of the case). There are also many fraud crimes that can be charged as related offenses such as California’s theft laws, California’s forgery law (Penal Code 470 PC), and/or California’s perjury law (Penal Code 118 PC).
In addition, for many fraud offenses you can face state and federal charges. This means that one court could sentence you to certain penalties and the other court could sentence you to its own penalties too.
Fraud offenses commonly count as crimes of moral turpitude under California law. A conviction for a crime of moral turpitude can be cause to deport even legal resident aliens, or denial of professional licenses.
Plus, any property or money that was involved in committing the fraud may be seized through a process allowed under California law.
It works in our favor that there are a variety of California legal defense options for fraud crimes that an experienced California criminal defense attorney can put forward for you. They include (among others):
- Someone else committed the fraud but you were identified by mistake
- You did not intend to defraud anyone (intent must be proven to get convicted),
- Entrapment (you only committed fraud because you were coerced or lured by the police).
These laws are considered California fraud offenses (among others):
Violations of California’s auto insurance fraud laws include trying to get money fraudulently from an automobile insurance company by “staging” a collision, inflating your damages in a claim, or damaging your auto yourself and reporting it stolen.
Pharmacists, doctors, hospital employees, and medical equipment suppliers are usually the parties that may be involved in violations of California health care insurance fraud laws. Some examples of these types of violations are (among others):
- Receiving “kickbacks” from a drug manufacturer or supplier for prescribing their drugs
- Billing for medical services that were not provided
- Double billing or over-billing for services provided
- Engaging in prescription fraud by getting multiple prescriptions for the same drug
Most actions that break California’s Medi-Cal insurance fraud laws are also breaking California health care fraud laws at the same time. This is because health care fraud is very generic and can cover many things. For example, an optometrist who bills Medi-Cal (California’s state low-income health insurance program) for services she did not perform, is charged with two crimes: Medi-Cal fraud as well as health care fraud.
Intentional attempts to inappropriately increase, reduce, or deny unemployment benefits violate California’s unemployment insurance fraud laws. Some examples are (among others):
- Collecting benefits from California and another state at the same time
- Giving false information about efforts to find work
- An employer intentionally falsifying information about a former employee’s termination or wages to avoid paying the unemployment insurance program
California’s welfare fraud laws are violated when anyone tries to enroll or increase welfare benefits to which he/she is not legally entitled. There are 2 types of California welfare fraud, internal fraud and recipient fraud. Internal fraud is when an employee of the agency tries to unlawfully distribute or collect money from the agency. Recipient fraud is when an applicant for benefits applies for or tried to increase benefits unlawfully.
California’s workers’ compensation laws are violated when anyone attempts to file a false claim with California’s workers’ compensation insurance program. Examples of include (among other things) claiming that an off-work injury happened on the job, faking an injury or the severity of the injury, not disclosing prior injuries that may affect a current injury, etc.
California foreclosure fraud is a common form of California real estate fraud. This crime usually happens when someone offers to services as a “foreclosure consultant” to help stop or delay a foreclosure and then the “consultant” commits a fraudulent act in the efforts to stop or delay the foreclosure.
California’s laws against forging deeds make it a crime to file a forged deed, or attempting to register, file, or record a forged deed. To forge something is to knowingly create, alter, or use a written document with the intent to commit a fraud.
Predatory lending laws prevent banks and other lenders from taking advantage of uninformed borrowers. Lenders violate California’s laws against predatory lending if they approve a loan that requires payments beyond the borrower’s ability to repay.
Property flipping involves the purchase of a property below market value, upgrading it and then quickly selling it for a profit. It is generally a legal practice, but it becomes illegal property flipping in California if the flipper presents fraudulent appraisals or loan documents to make the sale.
California’s rent skimming laws require landlords to use all rent collected from residential rental property during the first year after buying the property to pay the mortgage. These laws also make it illegal to rent out a property that you do not have the authority to rent.
Rent skimming is usually a civil offense, punishable only by fines, but if caught rent skimming with at least five properties in a 2 year period it becomes a criminal offense.
Straw buyer schemers enlist people with good credit (the “straw”) to supposedly get a loan for another buyer who has bad credit. Once the loan is approved the schemer takes the money and disappears. The straw is then liable for the mortgage. Straws typically end up going bankrupt and being criminally charged for fraud.
California’s foreclosure fraud laws are designed to protect the public from California phantom help schemes. Examples of phantom help schemes are:
- A seller being foreclosed sells the property to an unsuspecting person and asks the buyer for a down payment. The buyer is given an unrecorded or fake deed and is left to deal with the bank.
- Someone offering services as a “foreclosure consultant” or “mortgage modification specialist” charges money for the services but does not actually do anything for the homeowner
- Someone offering services as a “foreclosure consultant” gets the homeowner to make the mortgage payments directly to the consultant believing the consultant will use the payment to negotiate with the bank to stop or delay the foreclosure.
Paying with a check knowing that there is not enough money in the account to cover the full amount (or attempting to do so) violates California’s back check law. If you do it with the intent to defraud the payee then you can face a second charge for committing check fraud.
California credit card fraud laws cover any credit card transaction that is fraudulently made or attempted. Examples include:
- Selling bogus credit cards
- Charging purchases on someone else’s credit card without their permission
- Charging purchases on your own credit card knowing that the card is revoked or expired.
California securities fraud is fraud involving investments or stocks. Specifically, it covers any act that encourages investors to make decisions based on false information. This can include overstating the value of a business, embezzling from shareholders, falsifying the financial statements of a business, etc. Promoters, stock traders, and accountants are usually the ones investigated for this crime when fraud is suspected.
California’s laws against forging, counterfeiting or possessing a fraudulent public seal are fairly self-explanatory, but note that they do not apply just to California seals. They apply to the seal of any government agency, any government, and to corporate seals. Also, anyone who forges a seal for the purposes of identity theft can be charged with for the identity theft and the forging of the seal at the same time.
California’s laws against forging or counterfeiting a driver’s license or ID card are fairly self-explanatory, but note that they do not apply just to California-issued ID cards. They also apply to cards issued by any government agency from any government. Note that simply altering a government or possessing an altered or fake ID card is sufficient to be convicted of this crime. Also note that assigning a different name on an ID card is sufficient to also be charged with identity theft at the same time.
California’s false personation law is designed to deter people from posing as someone else in order to gain a benefit for themselves or to harm the victim.
One example is to sign someone else’s name on a check and pose as that person so you can cash it (also breaks California’s check fraud law). Another example is to use someone else’s name to sign up for welfare benefits (also a violation of California’s welfare laws).
The Internet is a common place for these crimes to occur, note that these also count as California Internet fraud at the same time. For example:
- Making purchases online with someone else’s credit card
- Posing as someone else in an on-line forum
- Guessing someone’s password to hack into his or her social networking profile
California’s Internet fraud laws make it illegal to conduct any fraudulent activity on a computer, such as in an email, chat-room, forum, or on-line merchant. For example:
- Distributing or creating a computer virus
- Buying items fraudulently on-line
- Breaking California’s cyberstalking laws
Financial abuse of someone 65 years old or older is a violation of California senior fraud laws. Any type of physical, emotional, or financial abuse is also counted as a violation of California’s elder abuse laws. For example, if an investigation shows that an elder was the victim of any of the following schemes, charges for senior fraud would also apply:
- Credit repair schemes
- Telemarketing schemes
- Cemetery/funeral fraud
- Home repair schemes
- Real estate predatory lending
Financial abuse of an elder by a nursing home is a violation of California nursing home fraud laws. Any type of emotional, physical, or financial abuse is also counted as a violation of nursing home abuse laws. For example, any of these actions would be a violation:
- Overbilling for care
- An employee of a nursing home convinces an elderly resident to sign over his/her property to the employee
- A nursing home employee forges the elder’s name on a check.
Mail fraud is a different type of fraud because it is a federal offense, not just a state offense. Mail fraud is any activity where the U.S. postal system is fraudulently used. For example, all of these can lead to a conviction for mail fraud:
- Mailing a forged check to another person
- Advertising fraudulent services via mail
- Intentionally failing to deliver a product that was ordered through the mail
California handicapped parking fraud is committed when someone illegally misuses or lends another person a handicapped parking placard. These are some examples (among others):
- Lending a placard to another person who is not authorized to have one
- Borrowing someone else’s placard when you are not authorized to have one and the authorized person is not with you
- Using a forged, fake, or expired handicapped placard.
Violations of California’s law against fraudulent registration stickers makes it illegal to, in an effort to avoid paying DMV fees and/or to get a financial gain, intentionally interfere with registration stickers, license plates, or registration cards. Often, charges may also be filed for violating California’s laws against forgery, counterfeiting, or possessing a fraudulent public seal (depending on the circumstances of your actions).
If you would like more information, we invite you to contact us at the Law Offices of Marc Grossman.
You may want to ask for more detailed information about California Theft Offenses; White Collar Crimes; Penal Code 118 PC California’s Perjury Law; Penal Code 470 PC California’s Forgery Law; California Misdemeanor Offenses; California Wobbler Offenses; Federal Crimes; California Felony Offenses; How California Fraud Convictions Subject Aliens to Removal or Deportation; Crimes of Moral Turpitude; California’s Asset Forfeiture Laws; How California Fraud Convictions Trigger Professional Discipline; Mistaken Identity; California Legal Defenses; California Insurance Fraud; The Legal Defense of Entrapment; California Health Care Fraud; California Auto Insurance Fraud; California Medi-Cal Insurance Fraud; California’s Laws Against Doctor Shopping and Prescription Fraud; California’s Welfare Fraud Laws; California’s Unemployment Insurance Fraud; California’s Real Estate and Mortgage Fraud Laws; California’s Workers’ Compensation Fraud Laws; California’s Laws Against Forging Deeds; California’s Foreclosure Fraud Laws; Illegal Property Flipping in California; California’s Predatory Lending Schemes; California Straw Buyer Schemes; California’s Rent Skimming Laws; California Check Fraud; California Phantom Help Schemes; California Credit Card Fraud; California’s Bad Checks Law; California’s Identity Theft Laws; California Securities Fraud; California’s Law Against Forging or Counterfeiting a Driver’s License or ID Card; California’s Law Against Forging, Counterfeiting or Possessing a Fraudulent Public Seal; California’s False Personation Law; California’s Law Against Possessing a Fake or Counterfeit Driver’s License or ID Card; California’s Cyberstalking Laws; California Internet Fraud; California Senior Fraud; California Elder Abuse; Mail Fraud; California Nursing Home Fraud; California’s Law Against Fraudulent Vehicle Registration Stickers and California Handicapped Parking Fraud.
Call us for help…
If you or a loved one is charged with fraud and you need legal representation, we invite you to contact us at the Law Offices of Marc Grossman. We can provide a free consultation in office or by phone. We have local offices in the San Fernando Valley, Los Angeles, Long Beach, Pasadena, Ventura, Orange County, Rancho Cucamonga, San Bernardino, San Diego, Riverside, and throughout California.