Insurance Fraud Crime

To establish Insurance Fraud Crime under D.C. Code § 22–3225.02, prosecutors must prove:

• Intent to defraud or mislead an insurer.
• Submission of false, incomplete, or misleading information.
• Action aimed at receiving or increasing payment from an insurance company.

This crime is considered complete regardless of whether the payment is actually made by the insurer. Therefore, merely attempting to commit insurance fraud by submitting falsified documents is sufficient for prosecution under District law, even if the scheme failed.

The offense of insurance fraud may arise from various deceptive acts that mislead the insurance carrier:

• Falsified accident reports
• Inflated medical treatment claims
• Submitting fraudulent repair invoices
• Staging incidents for personal gain

The fraudulent act must be material and have the potential to influence an insurance decision; minor errors or omissions without deceptive intent generally do not constitute criminal insurance fraud. The key factor is the deliberate intent to deceive the insurance company for financial benefit.

Individuals may secure insurance coverage by concealing critical information, such as preexisting medical conditions or prior driving incidents, through false applications or forged diagnoses. This type of fraudulent act constitutes insurance fraud even if no subsequent claim is made under the acquired policy. The act of deception during the application process itself, to unlawfully obtain coverage, is the basis of the crime.

This severe category of insurance fraud involves intentionally causing an incident (e.g., a car crash, fire, or deliberate property damage) or faking an injury to activate a substantial insurance payout. These highly organized schemes often result in felony charges, particularly if bodily harm or public endangerment is involved due to the intentional staging. Such deliberate actions elevate the severity of the insurance fraud offense significantly beyond simple paperwork deception.

Under D.C. Code § 22–3225.02, the penalties for insurance fraud are determined primarily by the amount involved in the scheme:

• Basic fraud: Up to 10 years imprisonment or a fine up to $50,000.
• If the fraud involves over $50,000: Mandatory minimum 3-year imprisonment and enhanced fines apply.

Repeated offenses or large-scale fraud exceeding $1 million may invoke enhanced penalties under federal statutes like 18 U.S.C. § 1341 ("mail fraud" or "wire fraud") when interstate commerce is involved. Incarceration terms for insurance fraud vary depending on the amount of benefit wrongfully claimed and the sophistication and duration of the scheme employed.

A felony conviction in an insurance fraud case may severely restrict employment opportunities, particularly in sectors requiring high public trust and fiduciary responsibility:

• Financial institutions
• Public entities receiving D.C. funds
• Insurance, health care, or government contracting positions

The disqualification typically extends for 5 years following sentence completion or for the duration of probation, based on the offense class and severity of the insurance fraud committed. Individuals convicted of this type of financial crime must often disclose their felony status, which significantly complicates job searches in regulated fields.

Effective defense against a charge of insurance fraud begins with early legal involvement and proactive steps by the defendant to address the situation:

• Voluntary restitution to the insurance company before indictment
• Cooperation with authorities in identifying other involved parties in the insurance fraud scheme
• Psychological evaluations, especially when fraud relates to compulsive financial behavior or addiction

Courts in Washington D.C. may consider these factors when determining favorable plea outcomes or significant sentencing reductions for individuals facing insurance fraud convictions. These steps demonstrate remorse and accountability.

Judges may reduce penalties where the defendant can show limited culpability or demonstrate proactive measures to correct the wrong:

• The defendant played a minimal, subordinate role in the overall insurance fraud scheme.
• The fraud amount was relatively low, and full repayment was made promptly to the victim insurer.
• No prior criminal record exists for financial crimes or other felonies.

While probation is rare in high-value insurance fraud cases, first-time offenders demonstrating sincere remorse and early settlement efforts may successfully avoid incarceration, showing that individual circumstances can significantly influence final sentencing outcomes.