Fraud is the intentional use of deceit to persuade a person or business to give money or property to another person. Crimes involving deception are among the most commonly charged offenses in California. Fraud takes many forms and those who face charges will need an attorney. Some crimes target financial institutions like banks and insurance companies while others focus on individuals. Identity theft is a species of fraud, as is forgery. Other swindles include the auto repair shop that bills you for work that was never performed, Ponzi and pyramid schemes, and the sale of property that the seller does not own. Internet scams that result in unauthorized credit card charges or bank account transfers are increasingly common crimes of deception.
A number of offenses in California include “intent to deceive” as an element and can therefore be classified under the general umbrella of fraud. This article provides an overview of the crimes that are most often prosecuted.
Theft by False Pretense
The broad crime of fraud is generally known in California as “theft by false pretense.” To obtain a conviction, the prosecution must prove that:
- The accused knowingly and intentionally deceived a property owner by making false statements or promises or by representing that false documents or objects are authentic;
- The accused made those statements or representations with the intent to persuade the property owner to let the accused take possession of property;
- The property owner gave property to the accused because the owner relied upon the false statements; and
- The accused intended to keep the property.
Property is broadly defined to include money and labor.
A false promise is more than a promise that is not kept. It must be a promise made with the intent to deceive. A promise made with knowledge that it will never be fulfilled is a false promise.
A false statement can include the failure to provide information needed to make the statement truthful. “Not telling the whole story” can be a form of misrepresentation even if the words spoken are literally true.
The crime of theft by false pretenses can be charged as either a misdemeanor or a felony. Felony charges are generally available if the value of property taken exceeds $950 or if the property was a car or firearm. A conviction for a felony allows a judge to choose a sentence of 16 months, 2 years, or 3 years. The sentence increases to 4 years if the victim of the fraud was age 65 or older. Probation with up to a year in jail and/or a fine is also an available penalty. Some offenders may be eligible for alternatives to conviction and sentencing.
Insurance fraud can be committed in a variety of ways, including:
- Making a claim for payment as the result of an accident, theft, or other event that never happened.
- Deliberately causing an “accident” in order to make an insurance claim.
- Making a claim for injuries that do not exist.
- Making a claim for a greater loss than the insured actually sustained.
- Making a claim for reimbursement of health care expenses that the insured did not pay.
- Submitting the same claim to more than one insurer to induce multiple payments.
A fraudulent claim for health care expenses is a misdemeanor if the claim is less than $400. Larger claims can be charged as felonies. Other kinds of insurance fraud can be prosecuted as felonies if the loss exceeds $950. For most insurance fraud felony convictions, a judge can choose a sentence of 2 years, 3 years, or 5 years. Sentencing alternatives discussed above also apply to insurance fraud convictions.
Forgery and check fraud
It is a crime to:
- make or pass a check that has been forged or altered,
- use a check with the knowledge of its forgery,
- deceive another person or institution on purpose, and
- cause a loss of money, goods, or services.
The crime also applies to documents like promissory notes that create a legal obligation to pay money.
“Passing” a check means representing that the check is genuine. The accused does not need to say “This check is genuine” or to use any words at all. Handing a check to someone in payment for goods or services, or in exchange for cash, implies that the check is genuine.
“Making” a check includes forging a signature. It also includes creating a document that looks like a genuine check but is not real. “Altering” a check includes changing any part of the check without authorization, including the name of the payee or the amount of the check.
A related law allows individuals to be prosecuted for writing “bad checks.” That law requires proof that the person who wrote the check knew that there would not be sufficient funds in the checking account from which the check was drawn to pay the check at the time the check is presented for payment.
The penalties for forgery, check fraud, and writing a bad check are the same as those for “theft by false pretense.”
The following crimes are misdemeanors identity theft offenses, punishable by a maximum jail sentence of one year and/or a fine:
- Impersonating someone else in order to obtain a benefit or to prepare false documents.
- Impersonating someone else on the internet, including the creation of an email account or a profile on a social networking site, with the intent to harm or defraud another person.
- Making or selling fake driver’s licenses or other government issued identification cards.
- Obtaining a genuine driver’s license or other government issued identification card by using a false identity.
- Misappropriating “personal identifying information” (including social security numbers, credit card or bank account numbers, PINs and passwords) for the purpose of obtaining money, property, or credit. Higher penalties may apply to persons who acquire the personal identifying information of ten or more persons.
Impersonating another person in order to receive money or property that belongs to the person being impersonated is punished as a theft by false pretense.
Defenses to Fraud Charges
Crimes involving deceit often hinge on the intent of the accused. While the prosecution may claim that the accused made a false promise, the accused still has a defense, as long as the accused meant to keep the promise when the promise was made. In addition, a statement is not intentionally false unless the accused knows that it was false. A mistake of fact provides a defense to the charge.
Mistake of fact or lack of knowledge is also a common defense to a charge of check fraud. If the accused did not know that the check was forged or altered, the accused had no intent to deceive and is not guilty of a crime. In addition, signing someone’s name to a check with that person’s permission is a defense to forgery.
Whether the accused actually made a false statement or misrepresentation may also provide a defense. The alleged victim may have misunderstood the accused’s words. The accused also has a defense if the prosecution cannot corroborate the claim that the allegedly defendant committed fraud.
In some cases, the alleged victim’s reliance upon the false statement can be disputed. If the alleged victim knew that the statement was untrue but gave money or property to the accused anyway, the accused has a defense to the charge.
The availability of these and other defenses to fraud charges depends upon the facts of the case. To learn what defenses can be asserted in a particular case, consult a criminal defense lawyer.
Those who need assistance in San Diego, Los Angeles, Orange, or Riverside County can call (888) 250-2865 to obtain a free case evaluation from one of our skilled legal professionals.