Fraud charges in California can be deceptive because they are primarily based on non-violent behavior but carry sentences as severe as those for violent felonies. According to California law, fraud is the deliberate misrepresentation to obtain an unfair or illegal advantage, whether in financial, insurance, or real estate contexts. A conviction can be severe since these are often classified as white-collar crimes or crimes of moral turpitude. You could also risk losing your professional license, your immigration status, and your future job prospects.
The prosecutors in Los Angeles usually apply state and federal laws to impose the maximum sentence. When you are being investigated for a fraud offense, the wise thing to do is to remain silent until you speak to a lawyer. At Leah Legal, our criminal defense lawyers are experienced in examining complicated financial evidence and defending you against fraud crime charges.
Mortgage and Real Estate Fraud
The real estate business in California involves high-value transactions that trigger scrutiny from law enforcement agencies. “Real estate fraud” is a broad term that encompasses various behaviors involving the misrepresentation or concealment of facts that damage another person’s interest in real property.
Such fraud cases are usually complicated with voluminous document trails and sophisticated financial records. As a real estate professional, a lender, or even a private homeowner, you might be prosecuted under specific provisions of the Civil Code and Penal Code that are aimed at protecting the integrity of the housing market. Foreclosure fraud is among the most common forms of fraud.
Foreclosure Fraud, Civil Code 2945.4
California foreclosure fraud is prosecuted under Civil Code 2945.4. This law targets people providing services to homeowners in financial distress. You may be charged under this code when:
- You receive compensation for a service you have yet to render
- Charge exorbitant fees
- Place a lien or interest on the property as security for your services.
In such cases, prosecutors tend to depict the defendants as predators who exploit helpless homeowners. To fight this case, you have to carefully record how valid the services you offered are and question the prosecution on how they have interpreted your business approach. The legislation aims to prevent consultants from draining equity from distressed properties. Also, it often traps honest professionals who are merely trying to assist clients through the foreclosure process.
Rent Skimming, Civil Code 890
Rent skimming, punishable under Civil Code 890, takes place in two primary forms:
- When you do not use the rent proceeds for the mortgage in the first year of acquiring a rental property
- When you feign ownership of a property that you do not own, rent it to unsuspecting tenants and abscond with the proceeds.
Although a single instance of rent skimming may be considered a civil offense, a series of such acts is punishable as a criminal offense. The prosecution has to demonstrate that there was a pattern of conduct, and this is when your defense attorney can argue that you did not pay because of the unexpected events like medical emergencies or repairs that needed to be made, but not because of the criminal intent to make profits.
Forged Deeds, PC 115
Penal Code 115 makes knowingly filing, registering, or recording a false or forged document with a government office, such as the County Recorder, a felony. This usually occurs when the defendant is charged with falsifying a grant deed to convey ownership of a property without the consent of the valid owner.
Since this crime affects people’s records, judges and prosecutors deal with it harshly. A conviction under PC 115 is always a felony, and you cannot reduce it to a misdemeanor. To counter this accusation, it is necessary to conduct a forensic audit of the documents under question, and in many cases, handwriting experts are employed to demonstrate that you were not the origin of the forgery.
Unlawful Flipping and Predatory Lending
Lastly, the most common causes of California real estate fraud charges are illegal property flipping and predatory lending. Flipping is not an unlawful act, unlike purchasing a house, fixing it, and selling it at a profit, which is a legitimate business activity. Instead, this is a crime that entails artificially overvaluing a property by fraudulent appraisals and the filing of false loan documents with banks. This artificially inflated value is a deception that leads lenders to grant loans based on the property’s overvaluation.
Predatory lending involves unfair or abusive lending practices, often through aggressive sales tactics or by exploiting a borrower’s ignorance. These accusations are generally based on the evidence of financial analysts; as such, you need a defense team that can refute the prosecution’s financial analysis.
Insurance Fraud Schemes
California prosecutes insurance fraud vigorously, as the insurance industry is lobbying heavily to enforce the seriousness. The local District Attorney (DA) offices and the Department of Insurance have specialized units responsible solely for investigating these crimes. You violate California insurance fraud laws by submitting a misleading claim to obtain benefits you are not legally entitled to receive. The punishment for such crimes is severe, as the law considers them to be robbing a shared pool of money and thereby increasing premiums for everyone.
Auto Insurance Fraud, PC Sections 548 & 550
Auto insurance fraud prosecuted under California PC sections 548 and 550 addresses a broad range of prohibited actions. You might be charged with destroying or dumping your own car to get insurance money. It is a specific intent crime; that is, the prosecution has to demonstrate that you destroyed the vehicle with the express intention of making a claim.
The other type of auto insurance fraud is staging accidents. It is an advanced fraud in which people plan an accident or create one to make claims for vehicle damage and personal injury.
Moreover, the fact that numerous claims are filed on the same injury or loss is a breach of PC 550. The defense of such cases may include reconstructing the accident or demonstrating that the purported damage was justified and that the pre-existing problems were disclosed.
Healthcare Fraud
Healthcare fraud involves a particular set of professionals, including:
- Doctors
- Pharmacists
- Chiropractors
- Medical equipment suppliers
You can be accused of charging for services that have never been rendered, which is referred to as phantom billing. The other widespread charge is upcoding, in which a health practitioner charges a higher procedure code than the one performed.
Kickback schemes are also targeted by prosecutors in which professionals pay to receive patient referrals. Given the nature of these cases, which involve medical billing codes and standard practices of care, your healthcare fraud defense needs an attorney knowledgeable about the medical industry. We strive to demonstrate that billing errors were administrative rather than deliberate efforts to defraud the insurer.
Workers’ Compensation Fraud
As an employee, it is possible to be charged if you fake an injury at work or if an injury that was sustained outside work is claimed to have been caused by work. The prosecution most often uses video surveillance to demonstrate that a defendant is engaged in activities that do not support their claims of injury.
On the other hand, an employer may be accused of fraud in workers’ compensation when they present false information to the insurance company regarding their payroll to reduce their premiums or when they lead an injured employee not to make a valid claim. These are economic cases, and your defense will be to prove the medical evidence of the injury or audit the business records to refute the theory of premium fraud as put forward by the prosecution.
Unemployment Insurance Fraud
You commit unemployment insurance fraud when you claim the unemployment benefits when you are working and earning money. You may also be prosecuted if you give incorrect reasons for your firing to receive benefits or if you impersonate someone to accept checks.
The Employment Development Department (EDD) compares employment records with benefit payments to detect discrepancies. The defense in this case is usually based on intent, such as not understanding what is required to be reported, or identity theft, in which another person used your data to obtain benefits without your consent.
White-Collar Fraud and Financial Fraud
Financial fraud is a broad term for a crime involving the theft of money or property by illegitimate means. Such white-collar crimes do not include the use of force but deception. Although they are non-violent, the economic destruction they cause often results in hefty sentences. Prosecutors consider such crimes violations of trust, notably when the defendant held a fiduciary role.
Credit Card Fraud, PC 484e
You may be accused of credit card fraud based on having credit card details in your possession with the intention of fraudulently using the information. However, you may not actually make any purchase. Selling card information and producing fake cards are also crimes punishable by law. This, in the digital age, may be an elaborate act of hacking or skimming.
PC 484e cases are typically difficult to defend because they involve disputing the digital evidence that links you to the stolen information. Your lawyer could investigate IP addresses, computer logs, and surveillance footage to refute the prosecution’s claim that you were the person behind the keyboard.
Check Fraud, PC 476
You violate PC 476 when you create, issue, or hold a counterfeit check with the purpose of defrauding. This involves modifying a valid check by changing the amount or the payee’s name. It also addresses writing checks on a closed account or on an account with insufficient funds, provided there is intent to defraud.
The point of your defense is often the question of knowledge. In case you unwittingly attempted to cash a check that another person forged, you do not have the criminal intent necessary to get a conviction. We strive to establish the source of the check to demonstrate that you were a victim, not a culprit.
Securities Fraud
Securities fraud, or investment fraud, is the act of causing investors to make financial decisions using misleading information. According to the statutes of the California Corporations Code, unqualified securities are prohibited from being sold, or false statements of material fact are made to sell a security. This may include the falsification of a company’s stock price or the misrepresentation of investment risks.
These are very technical cases, and in most instances, the SEC conducts parallel investigations. An effective defense requires a team with in-depth knowledge of corporate finance law to distinguish between a failed business venture and a criminal conspiracy. We argue that the loss was not the result of fraud but of market forces.
Elder Fraud, PC 368
The field of financial elder abuse defense is a highly sensitive area of fraud defense. California PC 368 offers sentencing enhancements to anyone who defrauds the elderly. This crime may include telemarketing fraud against the elderly, caregivers robbing their patients, or relatives robbing an elderly person of funds in their account. Since society considers older people as a vulnerable population, the prosecutors are keen to prosecute such cases. Criminal defense in such cases is a sensitive matter, and it is usually demonstrated that the transfer of assets was a bona fide gift or that the elder had the mental ability to sign the deal.
Identity Theft and Forgery
Other types of fraud are usually connected with identity theft and forgery. It is hardly possible to imagine a complex fraud case that does not involve impersonation or document forgery. These offenses are critical to personal privacy and document integrity and are thus of high priority to law enforcement.
Identity Theft, PC 530.5
The prosecution of identity theft is pursued in PC 530.5. You are breaking this law by knowingly acquiring personal identifying information of another individual and applying that information to any illegal end without their permission. Personal identifying information (PII) consists of
- Names
- Social Security numbers
- Driver’s license numbers
- Bank account details
Though you may be accused of identity theft even when the victim suffers no direct financial loss, the unlawful use of the data is a crime. The PC 530.5 charges are usually defended by showing that you had permission to access the information or that it was not you who accessed the information. The greatest challenge the prosecution faces in internet fraud cases is establishing a direct connection between the defendant and the crime, since anonymity is the norm in most instances.
Forgery, PC 470
You commit fraud when you sign the name of some other person to a document or forge a seal or even a legal document, such as a will or a deed. The law enumerates specific documents that constitute forgery. However, it is exhaustive, encompassing nearly all writing with legal or financial significance.
An essential element of forgery is that the document be modified in a way that alters its legal meaning. When you sign your spouse’s name on a check with their consent, it is not forgery, since you have no intention to defraud. Our defense plan tends to be based on this absence of fraudulent intent or on demonstrating that the writing under consideration was not, in fact, false or altered.
Internet Fraud
Online fraud is a general term for crimes committed online. These are:
- Cyberstalking
- Phishing attacks that steal passwords
- Unauthorized online shopping
Because these crimes have inter-jurisdictional characteristics, they tend to interest federal officials. Technical skills are needed to defend against internet fraud claims. Your lawyer could collaborate with computer specialists involved in forensic analysis of hard drives and server logs. The idea is to make the digital evidence unreliable or to demonstrate that your computer or network was hacked by a third party who actually committed the fraud.
Sentencing and Punishments of Fraud Crimes
California law has several possible sentencing options, and the severity of the punishment usually depends on the sum of money stolen and the complexity of the scheme.
Misdemeanor Fraud Penalties
You are usually sentenced to one year in county jail in the event you are convicted of misdemeanor fraud. Misdemeanor fines are generally between $1,000 and $10,000, in addition to penalty assessments that may add up to a substantial sum. Although misdemeanor probation (summary probation) is typically an option that allows you to serve your term outside of prison, the conviction will still appear on your background check. This may make you ineligible for numerous jobs and housing applications, and even loans.
Felony Fraud Penalties
Felony fraud convictions have far more severe outcomes. The realignment laws in California have resulted in many fraud offenders being sentenced to county jail rather than state prison, but the sentences can still be quite long. On conviction of a felony, you may be subjected to:
- County Jail Time. 16 months, two years, or three years in county jail are the standard sentences.
- State Prison. Special types of fraud, such as insurance fraud or fraud involving a large amount of money, may result in a maximum 5-year term in state prison.
- Hefty Fines. Fines may be astronomical, frequently as much as $50,000 or as much as twice the value of the fraud, whichever is larger.
- Sentencing Enhancements. In case the defrauded amount is enormous, you can have a white-collar crime enhancement, which can increase your jail term by a few more years.
It is also important to note that most fraud cases are federal. Federal laws that criminalize the use of interstate communications or the U.S. Postal Service to perpetrate fraud are wire fraud and mail fraud. When prosecuted by federal authorities, the punishment is multiplied several times over. A federal wire or mail fraud conviction carries a maximum 20-year sentence in federal prison. Federal sentencing policies are strict, and the federal system does not offer parole so you will serve almost all of your sentence.
Collateral Consequences
In addition to imprisonment and fines, the collateral consequences of a fraud conviction are life-changing. The blow goes way beyond the courtroom and may irreversibly destroy your personal and professional life by creating:
- Full Restitution. You will most likely be required to make full restitution to the victims, which could lead to immediate financial devastation.
- Professional License Revocation. In case you have a professional license, which is a medical license, law license, or real estate broker license, the governing board will most likely start proceedings to suspend or revoke your right to practice.
- Immigration Consequences. Fraud is frequently viewed as a crime of moral turpitude or an aggravated felony, which may lead to immediate deportation from the United States and a lifelong bar to reentry.
Legal Defenses Against Fraud Charges
An experienced defense attorney in fraud cases has a variety of legal techniques to undermine the prosecution’s case. The onus lies solely on the government, and we have the skill to point out the holes in their evidence.
The following are some of the best defenses we use:
Lack of Intent to Defraud
The absence of intent to defraud is the most vigorous defense in nearly all fraud types. As mentioned above, fraud is a particular intent crime. When you did something wrong, made a bad judgment, or just did not fulfill what you promised because you were incompetent or unlucky, you did not commit fraud. Your criminal lawyer could demonstrate that you acted out of a good-faith belief that what you said was true or that what you did was legal. In case the jury feels that you had no intention of deceiving anyone, they cannot find you guilty of fraud.
Mistake of Fact
The defense of ‘mistake of fact’ is used in cases where you misinterpreted a vital factor which, were it true, would have rendered your act legal. For example, if you thought that you had the power to sign a document on behalf of another person, you cannot be found guilty of forgery. To establish this defense, we will collect communications, contracts, and witness testimony to reconstruct your state of mind at the time of the alleged offense.
Entrapment
The use of entrapment can be considered a defense in sting operations, which are common in contractor and insurance fraud investigations. Entrapment happens when police officers provoke a person who has never committed the crime to do so and otherwise would not have committed the crime. When an undercover agent harassed, threatened, or cajoled you into a scheme of fraud, we can say that the government invented the crime.
Lack of Sufficiency of the Evidence
Lastly, we usually claim that the evidence is inadequate. The cases of fraud are complex and involve intricate financial trails. Prosecutors tend to overcharge instances that are not thoroughly investigated. We can demonstrate that the prosecution has not been able to put the dots together by auditing the financial records and questioning the admissibility of the documents. When they fail to demonstrate all the elements of the crime beyond a reasonable doubt, such as your personal involvement and intent, the case must end in an acquittal.
Locate a Fraud Crimes Defense Attorney Near Me
Being charged with a fraud offense could destroy your integrity and future. Financial evidence can be overwhelming to the defense, but it also offers a skilled attorney many chances to challenge the prosecution’s case. A conviction is not a given, whether it is proving the absence of a fraudulent intent, proving a mistake of fact, or even the suppression of illegally acquired evidence. You require a defense team that is not only knowledgeable about the specifics of the California Penal Codes but also the strong-arm tactics of federal and state prosecutors.
Do not let a misconception or a financial mistake land you in jail and leave you with a lifetime criminal record. Leah Legal Criminal Defense Attorney has helped several clients accused of fraud offenses in Los Angeles, CA, fight allegations. Call us now to have a free consultation at 213-444-7818.
