Attorney for Penal Code 550

Daniel Horowitz has recently obtained a dismissal of Penal Code section 550 charges in Orange County, a dismissal of Workers Compensation fraud charges in Tehama County and he successfully defended Dr. Wilmer Origel D.C. at a landmark medical fraud trial in Stockton, California.  The prosecutors threw a myriad of invented and politically motivated charges at Dr. Origel.  He later sued the insurance companies who brought these fraudulent charges.  Daniel won a major jury trial victory for Dr. Sohila Bodner in Hayward, California and Dr. Gary Martinovsky who was investigated relating to that case successfully sued the insurance companies who launched this investigation.  

If you are facing insurance fraud charges under Penal Code section 550 or other code sections, Daniel Horowitz is your first choice as your defense lawyer.

PENAL CODE Section 550 (Insurance Fraud)

Penal Code section 550 is the insurance fraud statute that prosecutors exploit when no specific fraud statute exists. It is a “catch-all” often used to trap honest individuals. Just as the judge in the Georgia criminal case against Donald Trump dismissed charges for being “too vague,” Penal Code section 550 charges are frequently vague and fabricated by prosecutors.

California Penal Code Section 550 criminalizes conduct that may constitute insurance fraud. This section is ruthlessly exploited by insurance companies to target doctors and lawyers who represent injured workers. It is also wielded as a weapon to force settlements of insurance claims for mere pennies on the dollar. This is one of the most abused Penal Code sections, ensnaring countless innocent doctors, lawyers, and insured individuals in its web.

Read about our recent victory in a PC 550 case based upon this motion.

What are some of the Ways to Violate Penal Code section 550?

There are so many ways to be caught in a PC 550 prosecution.  Here are just some of the acts that are prohibited:

1. Presenting a false or fraudulent claim for payment for a loss or injury. 
2. Presenting a fraudulent claim for vehicle theft or damage. 
3. Presenting a fraudulent claim for loss due to theft of, destruction or damage to property. 
4. Signing a document with the intent to support a false or fraudulent claim. 
5. Submitting a claim for healthcare benefit not used. 
6. Overcharging for medical services rendered. 
7. Billing for medical equipment not actually supplied. 
8. Overstating damage suffered in a car accident (to the car) 
9.Overstating the injuries suffered in an accident. 
10. Overstating the injuries and disabilities in a Workers Compensation claim.

Many of these items are simply a dispute between a doctor, a lawyer or an insured person and the insurance company.  Unfortunately, certain prosecutors take the word of the insurance company and launch criminal actions against people who are in a dispute with the insurer.

What Is Fraud?

• Definition: Fraud involves intentionally deceptive actions designed to provide the perpetrator with an unlawful gain or to deny a right to a victim.  This general definition can include promising to perform a service with no intent to do so.  A promise to repave someone's driveway, collecting the money and then not showing up is an example of this.  But more subtle frauds can be a promise that a certain medical service was performed when a lesser service actually took place.  Is this a disagreement about the nature of what was done?  Or was it part of a scheme to defraud an insurance company.  There are many other examples.
• Criminal Aspect: Fraud becomes a crime when it involves a “knowing misrepresentation of the truth or concealment of a material fact to induce another to act to their detriment” (Black’s Law Dictionary). In simpler terms, if someone lies to deprive another person or organization of money or property, it constitutes fraud.
• Examples: Fraud can occur in various contexts, including finance, real estate, investment, and more.  Section 550 focuses on insurance frauds and it is a very broad statute that is creatively used by prosecutors so that almost any insurance reimbursement dispute has the potential of being charged as a PC 550 criminal violation.

Categories of Fraud:

• Against Individuals: Targeting a single person, including identity theft, phishing scams, and Ponzi schemes.
• Internal Organizational Fraud: Deception by employees, managers, or executives within an organization (e.g., embezzlement, tax evasion, lying to investors).
• External Organizational Fraud: Fraud committed against an organization from outside sources (e.g., vendors, customers, intellectual property theft).  Penal Code section 550 targets only external organizational fraud.  

Fraudulent Statements:  Penal Code section 550 focuses on fraudulent submissions but fraud encompasses more than just orchestrating a scheme to deceive the insurance company and get money. It extends to misrepresentation which costs the insurance company money even if there is no specific plan or overarching fraudulent scheme.  

In fact, broad definitions of fraudulent statements can be applied within the context of Penal Code section 550, resulting in criminal charges related to insurance claims.  Be aware that the failure to make a material disclosure can at times be the same as making a deliberately false statement.

Read Here: What Constitutes a Fraudulent Misrpresentation

Can You Be Prosecuted for a Penal Code section 550 Violation if Someone Else Files the Form?

Physicians or Chiropractors or other care provider who prepares false documents for a fraudulent insurance claim may be prosecuted under Penal Code section 550(a)(1) for “causing the presentation of a fraudulent claim,” even though another person actually presents the claim. (People v. Singh (1995) 37 Cal.App.4th 1343, 1369–1370 [44 Cal.Rptr.2d 644].) Alternatively, the care provider may be prosecuted under Penal Code section 550(a)(5).  So this is a crime focused on the claim presented and not the mechanics as to who actually signed the claim form.

Is the Penal Code Section 550 Charge a Felony or Misdemeanor?

The amount of the claim is crucial. Fraudulent claims for health-care benefits under Penal Code section 550(a)(6) to (9) are considered misdemeanors if the total amount does not exceed $950 (Pen. Code, § 550©(2)). If the defendant is charged with a felony, the misdemeanor offense is included as a lesser offense. The court must provide the jury with a verdict form to indicate whether the total amount of the claims exceeds $950. If the jury finds that the amount does not exceed $950, the offense should be classified as a misdemeanor. This determination is made by the jury. If the jury finds the defendant guilty of insurance fraud related to health-care claims, they must also decide whether the prosecution has proven that the total value of the false claims exceeded $950 within a period of 12 consecutive months.

Unanimity - What Does a Jury Have to Agree Upon?

If the prosecution alleges under a single count that the defendant made multiple false statements, the court must instruct on unanimity. (See People v. Sutherland (1993) 17 Cal.App.4th 602, 619, fn. 6 [21 Cal.Rptr.2d 752]; People v. Dieguez (2001) 89 Cal.App.4th 266, 274–275 [107 Cal.Rptr.2d 160].) However, where the evidence shows a “continuous course of conduct,” a unanimity instruction is not required. (People v. Dieguez, supra, 89 Cal.App.4th at p. 275.)  This is always a major issue in fraud trials especially insurance fraud cases.   The Horowitz office has focused on the key issues in Penal Code section 550 cases including unanimity, statute of limitations, void for vagueness and other technical and critical points.  Our criminal defense specialist title is truly reflected in the exceptional quality of defense that we provide in these complex fraud cases.

 Our Blog discusses some additional issues in these Penal Code 550 and fraud cases:

See:   Defenses to Fraud in PC 550 Cases

         The Williamson Defense to Penal Code section 550 Insurance Fraud Cases

Defense of insurance fraud cases is not a do it yourself project.  You need the best lawyer who specializes in criminal defense and criminal fraud defense.  Lawyers in Lafayette is a group of affiliated top criminal defense lawyers including former prosecutors and certified criminal defense specialists (State Bar of California, Board of Legal Specialization).  Call us if you are facing criminal fraud charges. 

Learn more: The Criminal Process Explained by the California Courts with Comments by Daniel Horowitz (lawyersinlafayette.com)