Penal Code § 550 Is a Continuous Accrual Offense, Not a Continuing Violation — And Why That Distinction Can Cut Years Off a Healthcare Fraud Prosecution

By Drew Bruff, Bruff Law PLLC, and Daniel Horowitz, Law Offices of Daniel Horowitz

When the State charges a physician, clinic, or billing company under California Penal Code section 550, the complaint often reads like a single, decade-long story. Count after count recites a sweeping date range — "on or about and between January 1, 2017 and December 4, 2024" — as though the alleged conduct were one continuous offense that only came to rest when the investigation ended.  Defending San Diego physician, Dr. Ghada Kassab this issue became the focus of our initial pretrial motion work.

This critical issue arose in a case we have in San Diego where an insurance company computer review tagged a doctor as treating a high number of patients during COVID and other times.  Of course, this doctor showed up every day fighting skin cancer in a high risk area despite the great unknowns and risks during the COVID era.  The key technical issue that we first confronted was the statute of limitations.  Did they have 2 years, 3 years or even more to comb files to see which ones they thought were not properly billed.  We framed an attack on the theory used to extend the statute of limitation.  Essentially the prosecution theory was that any act that today or recently was deemed improper would daisy chain tot he past and allow everything to escape the statute of limitations bar.

Now we wanted to scream from the rooftops - Dr. Kassab is completely innocent.  She worked herself ragged during COVID and didn't even bill for a lot of work she did.   But first, we had to be technical lawyers and see if we could knock the claimed loss down from nearly $ 10 million dollars to less than a million.  Here is what we did.

We asserted that the framing of the charges and definition of the law governing the statute of limitations was wrong.  Drew Bruff did a massively deep dive into every aspect of this area of law and essentially wrote the book on this topic.  (This is Horowitz writing this part of the blog and giving him the credit he deserves!)   Feel free to use this work and expand on it.

Section 550 is not a course-of-conduct offense. Each allegedly false claim is a separate, independently chargeable crime with its own limitations period. The correct accrual framework is continuous accrual, not the continuing violation doctrine. Getting that distinction right is incredibly important to your defense. In a case with a long billing history, it can eliminate years of alleged charged conduct, and — because the most serious sentencing enhancements in white collar cases are keyed to aggregate loss — it can transform the exposure a defendant actually faces.

This article explains the doctrinal difference, discusses the statutory and case authority, and then uses a real San Diego prosecution as a case study in what the correct analysis looks like when it is applied to a live pleading.

Two doctrines that sound alike and do very different work

Practitioners conflate these constantly, and prosecutors sometimes rely on the confusion.

The continuing violation doctrine treats a series of acts as a single, ongoing offense. The limitations clock does not start until the entire course of conduct ends. It is a narrow doctrine, applied where the harm arises from the cumulative effect of a series of acts rather than from any one act standing alone — employment discrimination, certain sexual abuse cases, conspiracy.

The continuous accrual doctrine works in the opposite direction. Where each wrongful act is independently actionable — where each act by itself supplies every element of the offense — each act carries its own limitations period, running from its own discovery. Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1199; Pooshs v. Philip Morris USA, Inc. (2011) 51 Cal.4th 788, 797.

The practical difference is enormous. Under a continuing violation theory, a claim submitted in 2016 remains chargeable in 2025 so long as the State alleges that similar conduct continued into 2022. Under continuous accrual, the 2016 claim is time-barred on its own schedule regardless of what happened later.

Why section 550 falls on the continuous accrual side of the line

Three reasons, and they reinforce one another.

First, the Legislature knows how to write a course-of-conduct crime, and it did not write one here. When California intends an offense to accrue only at the end of a course of conduct, it says so on the face of the statute. Penal Code section 288.5 defines continuous sexual abuse of a child as conduct occurring "over a period of time." Penal Code section 646.9 defines stalking to require a course of conduct. Section 550 contains no such language. It criminalizes the presentation of "any false or fraudulent claim" — singular, discrete, complete on submission. Pen. Code, § 550, subds. (a)(1), (a)(6).

Second, the accrual statute is a discovery statute, not a completion statute. Penal Code section 803(c), which governs accrual for section 550 offenses, provides that the limitations period does not begin to run "until the discovery of the offense." Read with Penal Code section 801.5, that produces a four-year period running from discovery of the offense — not from the conclusion of an alleged pattern. Nothing in section 803(c) delays accrual until a course of conduct ends. Prosecutors frequently plead section 801.5/803(c) in the same breath as sprawling multi-year count ranges, without appreciating that the statute they are invoking is the one that defeats the sprawl.

Third, each submission independently satisfies every element. If a provider submits an allegedly false claim on January 1 and another on January 2, the State does not need the second to prosecute the first. Each is a complete offense on its own. That is the definition of an independently actionable wrong, and it is precisely the circumstance in which Aryeh holds a new limitations period accrues with each act. Aryeh itself involved fraudulent invoices submitted for payment over a continuous period — directly analogous to a billing fraud prosecution. California courts have applied continuous accrual in civil enforcement actions predicated on section 550 violations as well. (See, e.g., State ex rel. Rockville Recovery Assocs. v. Multiplan, Inc. (2012) Cal. Super. LEXIS 20841.)

Put together: the State may prosecute claims submitted and discovered within the limitations window. It may not reach back and prosecute older claims merely because it alleges that similar submissions continued into the window. Allegations of continued conduct do not revive time-barred charges.

If the rule were otherwise, the limitations period in a billing case would never meaningfully run. The State could wait a decade, then sweep in every invoice a provider ever submitted by alleging that the conduct was ongoing. That is not the law, and section 803(c)'s discovery framework forecloses it.

The discovery question is a factual battleground — and often a favorable one

Because section 803(c) keys accrual to discovery, the second half of the fight is evidentiary: when did the victim or the State actually learn of the alleged offense?

In managed-care billing prosecutions, the answer is frequently much earlier than the State would like. These cases almost always begin with a payor — a health plan operating under capitation, with a financial incentive to police utilization — that identifies a provider it believes is billing too aggressively. The payor writes letters. It opens an internal audit. It refers the provider to the Department of Justice. It may place the provider on prepayment review. Each of those steps generates a dated record, and each of them is evidence of notice.

It does not matter for limitations purposes whether the "victim" is characterized as the health plan, the managed care organization, or the State. If any of them had notice of the alleged fraud outside the limitations period, the charges tied to those claims are time-barred. Defense counsel should be building this timeline early: referral letters, audit reports, DHCS and TRACS entries, the date the investigative file was formally opened, and any internal correspondence in which the payor uses words like "potential fraud" or describes itself as monitoring the provider's submissions going forward. A payor that says it is "watching" a provider's invoices has conceded notice as to the invoices it watched.

The part most defendants miss: enhancements aggregate, so accrual controls exposure

Here is where the analysis stops being technical and starts being consequential.

Trimming date ranges does not just narrow the counts. In white collar prosecutions, the enhancements that drive real custody exposure are calculated on the aggregate value of the conduct within the charged pattern:

• Penal Code § 186.11(a)(2) — the white collar crime enhancement — applies where a pattern of related felony conduct involves a taking of more than $500,000, and adds an additional term of two, three, or five years in state prison. Where it attaches, Penal Code section 1170(h) directs that custody be served in state prison rather than under local supervision. Section 186.11 also gives the prosecuting agency a mechanism to seek pretrial preservation of the defendant's assets — meaning the allegation can freeze a defendant's ability to fund a defense before any adjudication of guilt.
• Penal Code § 1203.045(a) — pleaded where theft exceeds $100,000 — operates to bar a grant of probation absent unusual circumstances.

Both are arithmetic allegations. They depend on adding up the claims within the charged windows. Shorten the windows, and the arithmetic changes. A case pleaded as a seven- or eight-year pattern with a seven-figure aggregate loss can, after a correct accrual analysis, become a case measured in months with a dramatically smaller sum — and, critically, one in which the enhancement that carried the mandatory state prison term and the probation bar can no longer be supported.

This is why the limitations analysis belongs at the very front of the defense. It is not a mopping-up motion to be filed after the substantive theories are developed. It is the motion that determines what case you are actually defending.

Case study: People v. Kassab, San Diego Superior Court Case No. CD307675

The pleadings in a pending San Diego prosecution illustrate the point better than any hypothetical. All of the following comes from documents in the public court file.

Dr. Ghada Kassab is a dermatologist who operated practices serving a predominantly low-income Medi-Cal patient population in San Diego County. She is presumed innocent, and the allegations against her remain unproven.

The original Felony Complaint, filed by the Attorney General's Division of Medi-Cal Fraud and Elder Abuse and dated May 8, 2025, charged twenty-three felony counts — twenty-two under Penal Code section 550(a)(5) and one under Welfare and Institutions Code section 14107(b)(1). The charged windows were expansive. A representative sample:

The original pleading also alleged the section 186.11(a)(1) and (a)(2) white collar enhancement — expressly alleging a loss to the State and the Medi-Cal healthcare insurer of more than $500,000 — together with the section 1203.045(a) probation limitation for theft exceeding $100,000. That is the pleading that generated the public narrative around this case: a physician alleged to have taken over a million dollars, facing a mandatory state prison enhancement and a bar on probation.

Defense counsel raised the accrual issue directly with the prosecution before filing any motion. The letter laid out the analysis above: that the State's theory rested on a continuing violation framework, that section 803(c) and section 550 instead compel continuous accrual, that each allegedly false submission carries its own limitations period, and that the record established payor and State notice of the alleged conduct as early as December 2018 — with the State's own investigation formally opened on August 1, 2019. Because the arrest warrant was filed in May 2025, claims accruing before May 9, 2021 were time-barred.

The First Amended Felony Complaint, dated March 19, 2026 and served March 24, 2026, tells the rest of the story. Every single count — all twenty-three — now begins on May 9, 2021. Not one count reaches back further.

Count 2 went from a twenty-one-month window to seventeen days. Count 16 lost more than four and a half years. Count 23 was cut from roughly eight years to under three and a half.

And the enhancements did not survive the amendment. The First Amended Felony Complaint's charge summary lists the twenty-three substantive counts and a single special allegation — the Penal Code section 801.5/803(c) limitations allegation — along with circumstances in aggravation. The section 186.11 white collar enhancement alleging a taking of more than $500,000 does not appear. Neither does the section 1203.045(a) probation limitation for theft exceeding $100,000.

No motion was ever heard. The issue was resolved on the papers, through correspondence, before it ever reached a judge.

The reason this matters beyond one defendant is that the public record about the case has not caught up with the pleadings. The narrative in circulation still describes the original May 2025 charging document — the multi-year windows, the seven-figure loss figure, the state prison enhancement. The operative pleading in the case, filed nearly a year later, alleges none of that. Anyone evaluating this prosecution should be reading the First Amended Felony Complaint, not the announcement that accompanied the arrest and should look to make sure they are not being charged under a continuing harm theory versus a continuous accrual theory.

A practice checklist

If you are defending a Penal Code section 550 case, work through these before anything else:

1. Chart every count's date range against the operative limitations date. For section 801.5/803(c) offenses, that is four years back from the filing of the complaint or arrest warrant.
2. Identify what accrual theory the State is actually using. Ask directly. Prosecutors often have not articulated it to themselves, and the answer will shape everything that follows.
3. Read the statute the State pleaded. If it alleged section 803(c), it alleged a discovery statute. Hold it to that.
4. Build the notice timeline. Payor referral letters, audit reports, internal "potential fraud" communications, DHCS or TRACS entries, prepayment review notices, and the date the investigative file was opened. Every one of these is a candidate discovery date.
5. Recalculate the enhancements. Once the windows contract, re-run the aggregate loss figures for section 186.11 and section 1203.045. The enhancements may not survive.
6. Consider raising it in correspondence first. A well-supported letter that walks the prosecutor through the doctrine, the statutes, and the notice record can accomplish what a contested motion might not — and it preserves the motion if the letter does not land.
7. Do not accept a "continuing violation" characterization by silence. If the State's theory depends on it, make the State say so, and then make it defend the position against Aryeh and section 803(c).

Drew Bruff is the managing member of Bruff Law PLLC, a litigation firm licensed in Florida and California, handling complex commercial litigation and white collar defense. Daniel Horowitz is a California criminal defense attorney with a practice focused on the defense of physicians and healthcare providers. Together they represent Dr. Ghada Kassab in People v. Kassab, San Diego Superior Court Case No. CD307675.

This article discusses documents filed in the public record of a pending criminal case. The charges described remain allegations, and Dr. Kassab is presumed innocent unless and until proven guilty. Nothing in this article is legal advice, and reading it does not create an attorney-client relationship. Every case turns on its own facts and its own record. Past results do not guarantee or predict a similar outcome in any other matter.