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Top 6 Consequences of Insurance Fraud Convictions in New Jersey

In essence, insurance fraud is some form of lying to get insurance and insurance benefits. The ways someone can commit insurance fraud are as vast and varied as the possible penalties you can face if convicted in New Jersey. Here, we explore the many acts that constitute insurance fraud and the main categories of consequences that come with being convicted of insurance fraud charges. If you have been accused or charged with insurance fraud in Burlington County and nearby areas in Southern NJ, the seasoned criminal defense attorneys at Proetta, Oliver, & Fay stand by your side while we tirelessly protect your interests throughout the legal process. Beginning with a free consultation is a good step in the right direction when your wallet, your reputation, your career, and up to a decade in prison are on the line. Contact us to discuss your insurance fraud charge at 609-850-8284.

Insurance Fraud Comes in Many Forms in NJ

Charges under NJSA 2C:21-4.6

New Jersey Statute 2C:21-4.6 describes insurance fraud as making an insurance claim, obtaining insurance, paying premiums, or certifying information concerning insurance or financing premiums by misrepresentations or omissions of fact. The law also defines insurance fraud as misrepresenting your primary residence or vehicle location to obtain out-of-state insurance when you primarily reside or house your vehicle in New Jersey.

What Constitutes Insurance Fraud under NJ Law?

The New Jersey Fraud Prevention Act (N.J.S.A. 17:33A-4) (the Act) lists specific violations constituting insurance fraud. First, anyone who makes or opposes an insurance claim with a false or misleading statement or information regarding a significant fact to the claim commits insurance fraud. You may be guilty of insurance fraud when you oppose a claim against your insurance for damages to another’s vehicle, asserting that the claimant was at fault when you know you clearly caused the accident.

Likewise, making a false oral or written statement regarding a claim to an insurance company, the Unsatisfied Claim and Judgment Fund, or any claimant for insurance proceeds is fraud. The misrepresentation must be intentional and bear on a material fact of the claim. An individual who seeks payment for their injuries from New Jersey’s Unsatisfied Claim and Judgment Fund for an accident that is not a hit-and-run is seen as fraudulently abusing the system. The Fund covers those injured in a hit-and-run accident by uninsured motorists. Claiming damages for an accident that is not a hit-and-run is insurance fraud.

Another act constituting insurance fraud is intentionally omitting to disclose an event that affects whether an insurance company grants or continues insurance coverage or pays out on an insurance claim. An example is not disclosing a lapse in insurance coverage to an agent or on an insurance application, which may affect the pricing or eligibility for automobile insurance in certain companies.

The Act also categorizes insurance fraud as making a statement containing lies to an insurance company about where you live to get motor vehicle insurance or lies on an insurance policy application. It is also a violation of the Act to conspire with another to make or conceal those lies. To violate the Act under this provision, an individual must knowingly assist, conspire, or abet another in violating the Act provisions. Additionally, one who profits from such assistance, conspiracy, or encouragement to commit acts violating the Act is criminally liable.

The last two provisions (d and e) constituting insurance fraud include the liability of hospital personnel in knowingly allowing violations or conspiracies to violate the Act on hospital premises. And more explicitly, the Act spells out fraud in staging or engaging the services of one to stage a personal injury claim for negligence damages. An example is one who dashes out into traffic to cause a pedestrian accident to collect insurance proceeds and the one who conspires to defraud an insurance company in this way, maybe by splitting the insurance payout.

Main Types of Insurance Fraud Penalties

#1 Prison Time

Committing insurance fraud is risky. You could spend five years in prison. Violating New Jersey’s law against insurance fraud is a third degree crime unless you are a repeat offender. Five or more incidences of insurance fraud totaling $1,000.00 or more elevate the crime to second degree insurance fraud. The potential prison term rises to ten years.

#2 Period of Probation

With a strong advocate by your side, you may be able to bargain with the prosecution, especially if it is your first offense. A good attorney may help you get probation rather than incarceration. You are considered suitable as a possible candidate for probation if you can follow the terms of supervision outside of prison, like reporting to a probation officer, refraining from breaking any laws, obeying a curfew, and other terms that restrict you to work, family support, and other responsibilities.

#3 Financial Costs: Fines and Restitution

When someone is charged with insurance fraud, a third degree crime may mean they are ordered to pay a $15,000.00 fine for breaking the law. The fine increases to up to $150,000.00 for multiple insurance fraud offenders who face second degree charges. Additionally, you must pay restitution, meaning you must pay back the money you defrauded from an insurance company. Civil fees may be imposed as well based on the situation and context of your insurance fraud case.

#4 Community Service Requirements

Another possible sentencing condition is community service. An offender may be required to complete a certain number of hours performing community service, whether cleaning highways, reading to seniors in senior homes, working for nonprofits, removing graffiti around the city, or other acts that qualify. The hours can range from 45 to 120.

#5 Career Consequences

You may not get off so easily when you are a medical professional who commits healthcare insurance fraud. In fact, you are subject to losing your medical license. For a doctor or chiropractor, the loss of a professional license means they can no longer practice medicine or chiropractic care by the governing medical or chiropractic board that licenses doctors or other medical professionals. That can spell financial ruin when a medical professional is barred from getting work in the medical field.

Similarly, an insurance adjustor or insurance company owner participating in insurance fraud can lose their license to issue insurance and may be barred from working with insurance in any future job. Professional licensing agencies may place a bar on the professional who commits fraud when the circumstances warrant it. But more than just professionals suffer from future employment prospects. A fraud conviction on your criminal record may cause employers to pass you over for a job since they feel they cannot trust you.

#6 Effects on Eligibility for Certain Benefits

An insurance fraud conviction can affect more areas of your life too. For example, being a convicted felon may prevent you from possessing firearms or other weapons. You may no longer be able to vote either. Moreover, you may be denied financing for a home or other loans that a critical to your future. If you are not a citizen of the United States, it may result in your removal from the country altogether.

Strategies to Avoid a Conviction for Insurance Fraud Charges

Depending on the number of offenses you are accused of committing, insurance fraud can get you up to ten years in prison. Avoiding a conviction is possible, though. You may have forgotten an important detail on your insurance application, which is not a crime. An essential element of the crime is intention. A prosecutor must prove you intended to omit a material fact from your application to deceive an insurer. In another scenario, you may have given insurance information over the phone, and the agent on the other end may have mistaken or misheard your information.

Often, insurance companies take a statement of those involved in the accident. When an insurance agent takes your account soon after the accident, you may have had medical reasons for giving incorrect information, such as a concussion with residual effects, such as brain fog. In such a case, you need a firm legal representative to protect you.

Based on the accusations and the evidence, our experienced team of criminal defense lawyers can relay the mitigating factors of your case to the prosecutor. For example, a mitigating factor that works in your favor is correcting or attempting to fix your error on an insurance application or in a statement. We can also argue the complete defense of insurance fraud before a judge to get the charges dropped or reduced by representing you at trial.

You may win at trial when the state has insufficient evidence to convict you. After all, they must prove you intended to defraud an insurance company, which may be difficult since they cannot read your mind. Our strategic criminal defense attorneys understand how to exploit that fact to a jury, raising doubt about whether you had the intent, merely made a mistake, or were hurried through the application process and an oversight led to this entire run-in with the criminal justice system.

What to do when Facing Insurance Fraud Allegations in Burlington County, New Jersey

A potential prison term is alarming, not to mention the other harsh consequences of an insurance fraud conviction. If you have been accused of defrauding an insurer in New Jersey or fraudulently obtaining insurance benefits of an kind, let Proetta, Oliver, & Fay assist you. Our criminal law firm handles insurance fraud charges in towns such as Bordentown, Mount Laurel, Mount Holly, Pemberton, Lumberton, Burlington Township, and throughout Burlington County. Request a free consultation online or by phone at 609-850-8284 to talk through the details of your case and learn how we can help.