Accused of Insurance Fraud (Penal Code § 550) in California? Here’s What You Need to Know.

Facing Charges Under Penal Code § 550? Don’t Risk Your Freedom Over a Misunderstanding.

Insurance fraud charges under Penal Code § 550 often start with paperwork. A billing discrepancy. A claim that looks unusual. Maybe a medical provider flagged it, or an insurance investigator passed it on. From there, it escalates—and now you’re here.

This statute covers everything from exaggerated accident reports to billing for services that were never provided. But not every mistake is fraud. And not every client we represent is someone trying to cheat the system. Sometimes the allegations are built on assumptions. Sometimes, they’re just wrong.

At The Nieves Law Firm, we help people take control of situations like this—carefully, strategically, and without judgment.

Insurance Fraud Under Penal Code § 550

California Penal Code § 550 covers a wide variety of conduct related to false or fraudulent insurance claims. It’s unlawful to:

• Submit or cause someone else to submit a false claim
• Submit multiple claims for the same loss
• Stage or participate in an auto accident for the purpose of collecting insurance
• Falsely report a vehicle as stolen or damaged
• Submit false health care claims, including claims for services not rendered
• Hide or fail to disclose key information to increase benefits or payments
• Make false statements to insurers orally or in writing
• Misrepresent your residency to obtain lower insurance premiums

Importantly, it’s also illegal to aid, abet, conspire, or assist in any of the above actions.

Common Examples of Insurance Fraud

Insurance fraud doesn’t always involve elaborate criminal schemes. Sometimes, even simple misstatements can become criminal charges when prosecutors claim intent to deceive.

Here are a few examples:

• Submitting an inflated repair estimate after a car crash
• Claiming injuries that didn’t occur
• Billing for medical treatment never provided
• Filing a claim with two different insurers for the same loss
• Hiding a preexisting condition in a health or disability claim
• Staging a minor fender-bender to collect money for vehicle or medical damages
• Using a false address to get cheaper auto insurance

Types of Insurance Fraud Covered Under Penal Code § 550

Penal Code § 550 includes two major subsections: subdivision (a) and subdivision (b).

Subdivision (a) – Acts Like Submitting or Causing False Claims

This covers acts like:

• Submitting false claims for property damage
• Making false reports about stolen vehicles
• Submitting claims for services not actually provided
• Staging accidents

Subdivision (b) – False or Misleading Statements

This covers:

• Providing false statements in support or opposition of a claim
• Lying to insurers about facts that affect coverage or payouts
• Misrepresenting where you live to obtain cheaper auto insurance

Penalties for Insurance Fraud in California

Penalties vary based on the type of fraud, the amount involved, and whether the person has prior convictions. Here’s a breakdown:

Felony Charges – Most Common Outcome

Many insurance fraud offenses under § 550 are considered felonies, punishable by:

• 2, 3, or 5 years in jail (under Penal Code § 1170(h))
• A fine of up to $50,000 or double the amount of the fraud, whichever is greater
• Restitution to the insurance company or medical provider
• Formal probation or parole

If the fraud involves health care claims over $950, the penalties escalate similarly.

Misdemeanor Charges

If the claim is $950 or less, and the total across 12 months remains below that threshold, the offense may be charged as a misdemeanor:

• Up to 6 months in county jail
• A fine of up to $1,000
• Summary probation

But if multiple small claims total more than $950 within 12 consecutive months, the charges can be stacked and prosecuted as a felony.

Sentence Enhancements

If you have prior felony convictions for insurance fraud, auto fraud, or health insurance fraud, the court may impose:

• Two-year enhancements for each prior
• Five-year enhancement if convicted multiple times for staged car accidents
• Two-year enhancement for each injury caused by a staged crash

Consequences Beyond Prison Time

A conviction for insurance fraud can result in more than just incarceration or fines. You may also face:

• Restitution orders to repay insurance companies
• Loss of professional licenses
• Denial of insurance claims or future coverage
• Loss of immigration benefits (for noncitizens)
• Damage to reputation and employment prospects

Because these are crimes of dishonesty, the long-term consequences can be devastating—especially for those in licensed professions like health care, law, or finance.

Defenses to Insurance Fraud Charges

Not every mistake is a crime. At The Nieves Law Firm, we know how to deconstruct fraud allegations to protect your record and future. Here are some common defenses we explore:

1. Lack of Intent to Defraud

Intent is a key element of insurance fraud. If you submitted inaccurate or incomplete information without intent to deceive, you may have a defense. Many clients are caught off-guard by honest mistakes—especially in complex or high-stress situations like car crashes or medical billing.

2. Insufficient Evidence

Fraud must be proven beyond a reasonable doubt. Vague statements, inconsistent adjuster notes, or circumstantial evidence aren’t enough. We challenge every part of the state’s case—from surveillance to paperwork.

3. False Accusation or Misunderstanding

Sometimes claims are flagged for fraud due to system errors or miscommunication. Other times, third parties—such as mechanics, chiropractors, or even co-defendants—are the ones submitting false documents, and our client is wrongly implicated.

4. No Material Misrepresentation

Even if there was an error, it must involve a material fact—one that affects coverage or payment. Omitting a non-essential detail won’t always meet the legal definition of fraud.

5. Entrapment or Law Enforcement Misconduct

In some cases, undercover agents or sting operations may cross the line. If law enforcement pressured or manipulated you into committing the act, we can pursue a defense based on entrapment.

Why Insurance Fraud Cases Require a Skilled Defense Team

Insurance fraud cases often involve:

• Years of records and paperwork
• Surveillance footage
• Statements from adjusters, medical professionals, or other parties
• Investigations by insurance companies, law enforcement, and the California Department of Insurance

These cases are highly technical and require a strategic, organized, and experienced defense. At The Nieves Law Firm, we know how to:

• Analyze volumes of evidence
• Challenge vague or misleading claims
• Negotiate smartly to avoid harsh penalties
• Protect your future from long-term fallout

Accused of Insurance Fraud? Start Building Your Defense Today.

Whether you’ve already been arrested or are under investigation, now is the time to act. Prosecutors are trained to see patterns of fraud—but we’re trained to find the truth.

Contact The Nieves Law Firm or request a consultation online. We’ll help you understand what’s at stake, what your options are, and how we can start building a powerful defense on your behalf.