Used in everyday conversation, the word “fraud” can mean a lot of different things. The legal definition, however, is fairly straightforward. “Fraud” is an intentional misrepresentation (or knowing omission) to derive a benefit—usually money. It can be alleged as a civil tort or as a crime, both under California law and federal law. In this article, we focus on California criminal statutes.
In California, there are many different types of criminal fraud, including credit card fraud, check fraud, insurance fraud, healthcare fraud, mortgage fraud, bankruptcy fraud, insurance fraud, and elder abuse or senior fraud. You might be the victim of such actions or be accused of committing them. In either instance, it is important it is important to understand the applicable statutes in California.
In this article, we will explore the most common types of fraud charged by prosecutors in California and applicable fraud statutes. If you have been accused of or charged with fraud in California, it is very important that you obtain legal defense counsel as soon as possible to identify what defenses may be available to you.
California Penal Code 484 (e)-(j) criminalized various fraudulent activities concerning debit and credit cards including selling or possessing a credit card with the owner’s consent, applying for a credit card in someone else’s name, creating a counterfeit credit card, or knowingly communicating credit card info to defraud a person or business. Similarly, California Penal Code 476 PC prohibits making, passing, or publishing a false check. These crimes may be charged as misdemeanors or felonies, with a potential sentence of up to three years in jail.
California has a history of vigorously enforcing insurance fraud, which commonly includes staged car accidents, claiming the loss of property that was never lost or damaged, or falsely stating the cause of damage to property. Such conduct is usually charged under California Penal Code sections 448 and 550, and it can carry a penalty that includes up to five years in prison. Separately, some insurance companies might ask you to verify your insurance claim with an examination conducted under a sworn oath to tell the truth. Any false statements made in this context could carry additional criminal exposure.
The real estate industry is a significant part of California’s economy. Like the insurance industry, it too is heavily regulated. Businesses and individuals involved in this industry must be careful about not buying or selling property under false pretenses, which may include either false statements to buyers or sellers of a property or false statements to a lender providing funds for such a transaction. Prosecutors may charge such conduct with an array of statutes, including Penal Code sections 487 and 115 and Civil Code 2945.4.
Senior fraud refers generally to schemes to defraud an elderly individual of money or property based on a false statement that preys on the victim’s age. This conduct is criminalized under California Penal Code 368(d) and (e).
Identity theft is a type of fraud, as it involves intentional false statements to defraud someone and derive a benefit, and it is punished severely in California. Identity theft occurs when an individual obtains the personal identifying information of another person and uses that information without the consent of the individual to obtain goods, services, or property. Identify theft is criminalized by California law under Penal Code 530.5.
If you have been accused of or charged with fraud in California, it is critical that you immediately consult with an attorney who is experienced in successfully defending clients against these charges. The defenses potentially available to you are highly dependent on the facts of your case. You may be able to successfully argue that you lacked the requisite intent of the offense or, in other words, that you did not intent to make a false statement. Your actions may, for example, be better understood as the product of bad business decisions. You may also defend against the allegations by arguing mistaken identity or that you were not the person who committed the fraud.
Another common defense against fraud is that the prosecutor or plaintiff has not met his or her burden of proof in the case or that there is insufficient evidence to find you guilty or liable. In a criminal case, you may argue that the prosecution does not have sufficient evidence to prove each element of the offense beyond a reasonable doubt or, in a civil case, you might argue that the plaintiff cannot prove each element by a preponderance of the evidence.
If the statements you made were not false or misleading, that is also a viable defense. Here, it is important to demonstrate to the jury that the statement was in fact true and therefore, no fraud took place. This defense will accompany the defense of lack of evidence, since the prosecution or plaintiff should not be able to meet their burden of proof that your statements were false if they were in fact true.
Finally, the statute of limitations in California for most state-level fraud offenses is 3 years. If more than 3 years have passed since the alleged fraud took place, this is a viable defense.
As former Assistant U.S. Attorneys, Patrick Delahunty and Will Edelman are well-equipped with the perspective and skill of prosecutors who have prosecuted and obtained convictions in multiple fraud cases in California. With this background, we have successfully defended clients against an array of fraud charges and claims in criminal and civil courts. In these cases, our goal is to exonerate our clients quickly and effectively or substantially reduce the charges or claims against them through negotiations with the prosecution or plaintiff’s counsel. For more information, please contact us today for a confidential consultation at (415) 891-6210.
Patrick Delahunty is a former federal prosecutor with deep experience in resolving disputes. He advises individuals and companies in complex criminal, regulatory, and commercial litigation.