Fraud is a broad legal concept involving the use of deception, misrepresentation, or dishonesty to obtain money, property, or other valuable items.

Common fraud crimes include insurance fraud, identity theft, mortgage fraud, and securities fraud.

Under California law, fraud is not a single crime but rather a category that encompasses numerous specific offenses. These crimes typically share a common element: the intent to defraud.

However, the specific actions, statutes, and penalties vary significantly depending on the nature of the alleged conduct.

California statutes cover a wide array of fraudulent activities, ranging from insurance schemes to the misuse of public benefits.

Common fraud crimes in California include acts of deception for financial gain, such as insurance fraud, identity theft, real estate and mortgage fraud, securities fraud, elder fraud, credit card fraud, embezzlement, telemarketing scams, and offenses involving government benefits such as Medi-Cal or welfare fraud.

All these crimes involve intent to deceive for illegal profit and carry penalties that range from misdemeanors to felonies.

Key Takeaways

• Under California law, fraud involves intentionally deceiving someone for unfair personal benefit or to cause harm or loss. The state has numerous laws that criminalize various forms of fraud.
• Fraud is mainly classified as a "white-collar crime" because it involves non-violent, deceitful actions.
• Many fraud crimes carry severe penalties, including large fines and long prison terms if you're convicted. While some are consistently prosecuted as felonies, others are "wobblers"-meaning they can be charged as misdemeanors or felonies.
• Many cases of fraud also constitute federal crimes, potentially leading to charges at both the state and federal levels.
• You breach one of the criminal fraud laws whenever you use deception or deceit to perform an act that gains an unfair or undeserved benefit or causes harm or loss to someone.

Let's look at some of the most common types of fraud prosecuted under California law.

Insurance Fraud

Insurance fraud involves knowingly submitting false claims or assisting others in doing so to obtain payment from an insurance provider. This offense is codified under California Penal Code §§ 548-551 and Insurance Code § 1871.4.

Common examples include staging automobile accidents, inflating the value of stolen property, or billing for medical services that were never provided.

This offense is a "wobbler" in California, meaning prosecutors can charge it as either a misdemeanor or a felony depending on the facts of the case and the defendant's criminal history.

A misdemeanor conviction can result in up to one year in county jail. A felony conviction carries a potential state prison sentence of two to five years, along with fines up to $50,000 or double the amount of the fraud.

Identity Theft

Identity theft occurs when an individual willfully obtains personal identifying information-such as a name, Social Security number, or bank account details-and uses it for any unlawful purpose, typically for financial gain. This crime is prosecuted under Penal Code § 530.5.

Like many fraud crimes, identity theft is a wobbler. If charged as a felony, the defendant faces up to three years in prison. The court will also order restitution to victims for financial losses resulting from the theft.

Credit Card Fraud

Penal Code §§ 484e-484j governs credit card fraud, which includes stealing, forging, counterfeiting, or unlawfully using access cards or account information. This statute covers a range of activities, such as using a revoked card or encoding a counterfeit card with someone else's information.

A wobbler offense, the felony version of credit card fraud is punishable by up to three years in county jail. Prosecutors may seek sentence enhancements if the fraud was part of a larger, organized scheme.

Check Fraud and Forgery

Check fraud involves manipulating physical or digital checks (typically by forging a signature) to deceive a victim. Penal Code § 470 defines forgery as signing another person's name or altering documents without permission.

Penal Code § 476 addresses making, passing, or possessing fictitious checks.

A felony forgery conviction can result in up to 3 years in jail. However, following the passage of Proposition 47, certain check fraud offenses involving losses of $950 or less must be charged as misdemeanors, provided the defendant does not have disqualifying prior convictions.

Welfare and Public Assistance Fraud

Welfare fraud involves making false statements or failing to report relevant information to obtain benefits such as CalFresh, CalWORKs, or Medi-Cal. Under Welfare and Institutions Code § 10980, this can include underreporting income or failing to disclose a change in household status.

Penalties depend on the amount of aid obtained. If the fraudulent benefits total $950 or less, the offense is a misdemeanor punishable by up to six months in jail. Amounts exceeding $950 elevate the offense to a wobbler, with potential felony penalties of up to three years. A

Unemployment Insurance Fraud

Falsifying information to receive unemployment benefits is prosecuted under Unemployment Insurance Code §§ 2101 and 2102. This includes claiming benefits while employed, misreporting wages, or using a false identity to file a claim.

This offense is generally a wobbler. A felony conviction can result in up to three years in prison. In addition to criminal penalties, defendants face mandatory restitution to the Employment Development Department (EDD) and significant administrative fines.

Other Types of Fraud in California

Many other fraudulent activities are considered crimes in California, but do not fall into the categories listed above. These include, but are not limited to:

• Gaming fraud is specified in Penal Code 332 PC. It includes using sleight of hand, trickery, "three-card monte," pretending to be a fortune-teller, or other confidence schemes to lure people into betting and assuredly losing.
• Telemarketing fraud, as defined by Business and Professions Code 17511.9, involves using the telephone to promote deceptive business schemes or to deceive individuals into giving away their money.
• Senior fraud involves schemes targeting individuals aged 65 and older or other adults dependent due to physical or mental disabilities. These offenses fall under elder abuse as defined by Penal Code 368 PC, with nursing home abuse carrying additional penalties.

The Importance of Legal Representation

Fraud cases are often complex, relying heavily on paper trails, digital forensics, and the interpretation of intent. An experienced California criminal defense attorney is essential for navigating these intricacies.

Defense counsel can analyze the prosecution's evidence, identify procedural errors, and negotiate with prosecutors regarding the classification of "wobbler" offenses. A good attorney will often employ one or more of the following defenses in California fraud cases:

• Lack of Intent: Most fraud statutes require the prosecution to prove specific intent to defraud. If the defendant made a genuine mistake or error without the intent to deceive, the charges may not hold.
• Mistake of Fact: If the defendant reasonably believed the information they provided was true, or that they had a right to the property or benefits in question, this can serve as a valid defense.
• Mistaken Identity: In cases involving digital transactions or identity theft, the defense may argue that the defendant was not the perpetrator and that another individual used their information or access.

For more information or a case review, contact Eisner Gorin LLP in Los Angeles.

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