Detroit Insurance Fraud Lawyer
The penalties for committing insurance fraud are harsh. From prison time, to fines, to a felony entry on your criminal record, a conviction for insurance fraud can have far-reaching consequences. For this reason, you should retain the services of an experienced Michigan criminal lawyer if you’re facing insurance fraud charges—your future could depend on it.
Michigan Penal Code section 500.4503 outlines several forms of insurance fraud and provides guidelines for the conduct of policyholders, insurance companies, and their agents. It’s illegal to knowingly and willfully assist someone to break any of the rules described below, or to even benefit from someone’s breaking of the rules.
It’s Fraudulent to Misstate Material Facts in an Insurance Application
It is illegal to knowingly make a false statement of material fact—whether oral or written—in an application for insurance to an agent, insurer, reinsurer, or broker with the intent to injure or deceive. It’s even illegal to assist, abet, solicit, or conspire with another to make false statements of material fact in an insurance application.
What this means is that you can’t change or omit important facts about yourself when you apply for insurance. For example, if you’re a smoker or if you enjoy extreme sports, you must be honest about it in your application. These kinds of facts are “material” because they might influence the insurer’s decision about whether to cover you or not.
Misstating Material Facts in an Insurance Claim is Fraud
Section 500.4503 prohibits knowingly making false statements of material fact in a claim for payment of an insurance benefit with the intent to injure, deceive, or defraud. Similarly, it’s illegal to assist, abet, solicit, or conspire with another to make false statements of material fact in an insurance claim.
A lot of fraud happens at the level of insurance claims—that’s why insurance companies hire investigators to closely examine each and every claim they receive against all available evidence. Not only is misstating a material fact illegal, it will result in the claim being denied.
When it comes to insurance claims, material facts are those that might influence the insurance company’s decision to compensate you for your damages. For example, if you crash your car, you would be misstating a material fact if you claimed that you were the victim of a hit and run accident.
How the Law Regulates Insurers and Their Agents
Michigan law prohibits the attempted or actual removal of assets or records of assets, transactions, and affairs from the office or place of business of the insurer. It’s also illegal to conceal or attempt to conceal these assets or records from the insurance commissioner. This rule is meant to improve the transparency of the insurance industry. Insurance companies that hide their assets from regulators might be able to promote themselves as solvent, when in fact they are operating in the red.
Section 500.4503 makes it illegal to attempt, conspire to, or actually divert funds of an insurer or other parties in connection to:
- The transaction of insurance or reinsurance
- The conduct of an insurer’s regular business activities
- The creation, buy out, or dissolution of an insurer
It is also illegal to use or act as a runner, capper or a steerer with the intent of fraudulently obtaining benefits under a contract for insurance. Runners, cappers, and steerers are agents who are paid to convince people to use certain healthcare providers. These healthcare providers hire these agents to increase the revenue from the health insurance of new patients.
Finally, an insolvent insurer is not allowed to accept or to even solicit new insurance risks, or clients.
The Penalties for Committing Insurance Fraud
Michigan Penal Code Section 500.4511 provides that a person who violates any of the rules described above will have a felony entry on his or her criminal record and may face up to four years’ incarceration and/or a $50,000 fine.
As for people who enter into agreements or conspiracies to commit insurance fraud, they may face up to 10 years’ imprisonment, an optional $50,000 fine, along with a felony entry on their criminal record.
In addition to the fines and jail time, people who commit insurance fraud may be responsible for paying back the victims under the laws of criminal restitution. The culprits may also be liable in civil court to pay both economic and punitive damages to the people who were defrauded.
How a Detroit Insurance Fraud Lawyer Can Help
Seen the harsh penalties of committing insurance fraud, having a trusted and experienced Detroit insurance fraud lawyer by your side to defend against your charges can make a big difference. With experience as both a prosecutor and a defense attorney, Maurice Davis knows how Michigan’s criminal justice system works, and how to advance his clients’ interests within it.
Depending on the facts of your case, it may be possible to mount a defense using some of the strategies below:
- If law enforcement did not have a warrant or probable cause to search your premises, it’s possible to suppress evidence of the prosecution’s case obtained from that search
- Similarly, evidence that arises out of an unconstitutional arrest, detention, or interrogation can be suppressed
- At trial, it may be possible to object to some of the prosecution’s evidence and witnesses based on the rules of evidence and criminal procedure
- Through skillful depositions, discovery, and cross-examination of key witnesses, it may be possible to uncover evidence that creates a reasonable doubt as to whether you committed the acts of which you are accused
- Even if it’s undeniable that you made misstatements of material fact, it’s still possible to show that you did not do so knowingly and intentionally
- If you receive a guilty verdict, it’s possible to obtain a lighter sentence by highlighting mitigating factors that may apply to your case at the sentencing hearing