Fraud Crimes

The laws of California aggressively prosecute defendants accused of fraud. Although fraud crimes don’t result in serious injuries or death, they can cost the defendant in the form of fines and spending a significant period in prison. If you are facing the charges of breaking California Fraud laws, it would be essential to contact an attorney from LA Criminal Defense Attorney. Our expert attorneys serve clients in Los Ageless, California, to establish a strong defense and ensure the best outcome for your case.

Legal Definition of Fraud

Fraud is the misrepresentation of matters, whether through words or actions, by misleading, false allegations, or by concealment of issues which should be legally disclosed. Due to these actions, one individual secures unlawful gain under the expense of the other person or organization.

The nature of fraud crimes means that the individual who gets defrauded may feel vulnerable and their trust is broken since they lost money or valuable property as a result of the occurrence. Depending on the amount of money involved or the value of properties lost, fraud crimes could be classified as either criminal or civil charges. As a civil charge, the fraud could be intentional, where the perpetrator convinces the victim with the use of deceit to believe the false facts, and as a result, the victim suffers harm or is disadvantaged in any way.

Concealment fraud is likely to occur when there is no full disclosure of matters with the intention of deceit. The concealing person allows the victim to make decisions without full knowledge of the consequences, hence, the victim is harmed.

Fraud could result from broken promises. The victim may have been lured to make a wrong decision with false promises and a result of breaching these promises, the victim suffered a loss. According to penal code section 503 of California criminal law, embezzlement fraud is where a person who is entrusted to protect property or money breaches that duty and the resulting action causes a loss to the victim. When the fraud perpetrator unknowingly presets false facts which later harms the other person financially, then this is viewed as constructive fraud.

Types of Fraud crimes

Depending on the circumstances under which the crime was committed, fraud criminal charges may be issued at a federal or state level. This offense is considered white collar even if in some cases, individuals could get physically or financially harmed. The information targeted by a fraud perpetrator is often financial so that they can have some monetary gain from the action.

There exist different types of crimes involving varying means that can get prosecuted as fraud crimes in California. Regardless of the kind of fraud committed, the penalties and consequences could be severe. However, different penalties apply to individual types of fraud offenses. Some of the most common categories of fraud crimes include:

Identity Theft and Forgery

Falsifying any document is a criminal fraud offense. Since most forgeries are made in the attempt to change one's identification for personal gain, these actions violate both California’s fraud and forgery laws. Under the California Penal Code Section 530.5, it is an offense to:

  • Acquire or even retain identification documents of another person with the intention to commit fraud without their consent
  • Willfully obtain the personal identification documents or information of another person and use them without the owner's knowledge
  • Transfer, sell or give away a person’s identifying information with prior experience that the information might be used for fraud

Identity fraud can be committed in various ways including posing as someone else with the purpose of getting financial benefits, signing another person’s documents with the intent to harm them, or even pretending to be someone else and using their social media accounts for your gain. Forging someone’s documents or stealing their identity is taken very seriously, therefore, if you are charged with this crime, it would be wise to seek the services of an attorney with experience in dealing with these types of situations.

Under the Penal Code Section 530.5 of California law, theft of identity could get treated as either a misdemeanor or a felony. This will depend on the circumstances under which the crime was committed, your criminal history, and monetary value involved as a result of the fraud.

As a misdemeanor, the defendant is likely to pay up to $1000 worth of fines and spend a minimum of 12 months in county jail. Since a felony conviction is more severe than a misdemeanor, the accused could spend up to three years in state prison and would be required to pay fines of up to $10,000.

Check Fraud

You are considered to have committed check fraud if you are found in possession, using or an attempt to use a check to defraud the payee and presenting a fake check as genuine. Under section 476 of the California penal code, it is a criminal offense to endorse a check with someone else’s name or other identifying details without their knowledge. In such a case, the check may be genuine, but when signed under fictions and unauthorized name, it becomes false and illegal.

In these type of cases, a prosecutor will study the facts and circumstances surrounding the action before charging you. To get convicted of check fraud, the prosecutor is required to prove without a reasonable doubt that you made, possessed, or attempted to use a falsified check in payment of money or acquiring an item. There should also be proof that you were aware of the nature of the falsified document but you still went ahead to use it with the intentions of committing fraud and gaining some financial benefits.

In the case where the falsified documents were passed to someone else to carry out the transaction, the court will also require evidence that the defendant had ill intentions. Since check fraud is often as a result of forgery, the penalties of copying are added to those of the check fraud when sentencing. If you are accused of this crime, you are likely to spend up to three years in prison. However, early intervention of a skilled criminal defense attorney could help to reduce the case to a misdemeanor charge, and hence you spend one year in jail.

Insurance Fraud

It is considered insurance fraud when someone attempts to obtain or recover insurance benefits which they are not otherwise entitled to. The California fraud laws are after punishing individuals who present false claims intended to acquire payment from insurance companies. You can commit insurance fraud based on the false presentation of claims or deliberate exaggeration of the fees to be made.

State laws of California define different types of claims to get treated as insurance fraud crimes such as health insurance, automobile insurance, workers compensation, and property insurance claims. Generally, the prosecutor for an insurance fraud crime will require proof of the defendant’s intention to carry out the fraud. He/she should show that you made claims that you were not entitled to or you knowingly exaggerated the amount you had a right to get from an insurance company. Alternatively, they can show that you made a misleading statement which could change the outcome of the claim and gain you more insurance benefits.

The punishment for insurance fraud convictions varies depending on the category of insurance fraud committed. As a misdemeanor insurance fraud in California, insurance fraud may result in a $10000, up to one year in jail, or both. General insurance fraud crime could cost you a maximum of five years in prison and $50000 depending on the amount of money involved.

When prosecuted as a felony, an insurance fraud crime may result in an increased fine of up to $ 150000 and two years of prison time will be added with every previous felony conviction for the same offense. The court may also ask you to compensate the victim for the losses they incurred due to your action.

Foreclosure Fraud

The foreclosure fraud is one of the most commonly prosecuted crimes in California concerning real estate. Foreclosure fraud occurs when an individual who is a known foreclosure consultant postpones a foreclosure without a valid reason. You can also get accused of this crime when you are part of a fraudulent activity dealing with closed homes or those in the process of closure.

Under section 2945.4 of California civil laws, it would be unlawful for an individual with the responsibility to postpone foreclosure sales to:

  • Collect compensation without completion of the services they agreed upon with a homeowner,
  • Take any security collateral on the property in question or take any interest to allow the sale of a foreclosed property,
  • Charge exaggerated fees for their services,
  • Acquire the powers of an attorney or attempt to coerce the owner of the property to sign contracts that don’t comply with the rules and regulations, or
  • Accept money from a third party and alter the nature of the services made with the homeowner without their knowledge or consent.

Foreclosure fraud is a wobbler crime, and depending on your case, the judge will charge it as a misdemeanor or a felony. A misdemeanor will attract a one year sentence and $10,000 of fines while a felony sentence may vary from 16 months to three years in prison.

Besides, a foreclosure fraud crime may result in additional penalties under various circumstances. In the case where you have two or more prior convictions for fraud, and the victim suffered a loss totaling to $100,000 or more, a maximum of four years and $500,000 fine will be added to your sentence.

If a property owner happens to suffer a loss of $65,000, the foreclosure agent will have to serve between one and four years as an additional sentence. They are also required to compensate the victim.

Credit Card Fraud

You are considered to have committed a credit card fraud when you use or attempt to use a debit or credit card for personal gain on the expense of someone else. You will only get proven guilty if the action was intentional and your sole aim was to defraud another person or company.

Section 484 of California credit card laws seek to punish individuals who forge documents, alter signatures, which are the actions that result in credit card fraud. Everyday activities regarded as credit card fraud offenses include using someone else’s credit card details without their consent, using your credit card to make transactions with prior knowledge that it is expired or doesn’t have sufficient funds, and using a stole card to acquire goods or services.

The nature of the violation is likely to be a critical factor in the determination of the penalties you get if you are facing credit card charges. The crime may be punished as petty theft where a low amount of money (a maximum of 950 dollars) is involved. Petty theft is a misdemeanor, and you can spend a maximum of six months in jail and incur a fine of $1,000. However, under circumstances where the victim lost large sums of money, the credit card fraud will be punished as grand theft, which is a felony. These charges are likely to cost you up to three years imprisonment and a fine of $10,000.

Securities Fraud

In the business context, securities are business arrangements where one gets a percentage of ownership rights to the entity or the rights to debt repayment. Situations that can cause an occurrence of securities fraud are:

  • Selling of securities that violate the qualification terms,
  • Providing false, misleading, or exaggerated information on the value and market of a given security,
  • Selling securities that are not qualified according to section 25110 of California corporations code, and
  • Buying or selling securities with information not disclosed to other members of the public as a result of personal relationships with an entity.

Individuals likely to get caught up in security fraud cases are accountants, company shareholders, and stock exchange traders. The penalties for this offense are likely to be higher compared to those of other fraud crimes since they involve a high monetary value.

Under California’s Corporations Code section 25540(a), an individual who is caught engaging in market manipulation, making misleading or false statements for the sake of security transactions, will be punished by serving a maximum of five years in prison and fined a maximum of $10 million. Additionally, engaging in sales of securities without compliance with the qualifications and as a result, violating these terms is punishable by spending up to three years in state prison and paying a fine of $1 million.

In addition to serving time in jail, paying fines and compensating the victim, if you get convicted for any fraud crime, you risk losing your professional license and the rights to continue practicing in your field of expertise.

Legal Defense against Fraud Crimes

The most effective form of defense for your case will depend on the circumstances under which the fraud was committed. A defense strategy that works for one type of fraud crime may not apply to your situation. Whether the defense strategy relies on one robust explanation or multiple reasons why you should not get convicted, you will require help from an expert attorney to prove that your actions were not intentional. Some of the possible defenses your attorney could use to possibly reduce your sentence or get the charges against you dismissed include:

Mistaken Identity

Some fraud crimes arise as a result of stolen money property or falsified identity. However, this does not guarantee contact of the victim with the perpetrator. With the rise of digitized services in banking commerce and social media, internet fraud crimes have increased. Hence, there is a high possibility that the digitalized investigations may have wrongfully led the police to you. If you are accused of a crime you know nothing about, your defense attorney can try proving the mistake of identity.

Lack of the Intention to Commit the Crime

To get prosecuted for a fraud crime, there should be evidence that you had the intent to do so for a financial gain. The law believes that fraud does not occur by accident but happens on purpose. If you happen to have made a genuine mistake which got things mixed up leading to fraud, you can try to dismiss the claim by arguing lack of a clear intention to take part in the scam.

Insufficient Evidence

In most cases, an attorney would not advice taking defense options basing on your complete innocence. However, basing your defense on the prosecutor’s lack of enough evidence to link you to the crime could reduce your sentence. By finding weaknesses in the evidence and testimonies provided by the prosecutor, your attorney can pursue to have the charges against you dropped.

Non- fraudulent statements

Fraud accusations may often come up as a result of misunderstandings or genuine mistakes made over your comments. However, not all false statements are meant to defraud. Some of the statements that result in fraud are as a result of lack of knowledge of essential facts at the time of the transactions. To constitute fraud, the false statements made should relate to existing circumstances.

An individual or business may conclude that you were attempting fraud on them, but in a real sense, you made no mistake. If your case comes down to a genuine misunderstanding, your lawyer can help clear the misunderstanding by explaining the circumstances that the false statements were made as part of your defense during the trial.

The victim's consent

You cannot get convicted of a fraud crime if the victim gave consent to your actions. If you can provide sufficient proof that the business or individual you are accused of defrauding permitted you to carry out any transactions, then this could be a crucial defense that you did not try to benefit yourself illegally. Even when your actions may have led to fraud, the fact that you had consent, your action is not considered a criminal offense.


Entrapment will occur if the government or a law enforcement officer compels or tricks you into committing a crime that you wouldn’t have otherwise taken part in. The prosecutor is likely to claim that you contended to committing this crime; hence, your attorney could work through the specific situation to show that you were forced to commit the fraud. If the judge is convinced that you were entrapped, then it is possible for the charges to be dropped.

Expiration of the limitation period

California laws have a specific time limit within which fraud charges should be filed. Even when the case is rightful and the evidence is compelling, you can register for the case dismissal if the period given by the law is expired. Before presenting this defense, it is essential to understand that the limitation period begins once the fraud is detected. Hence, if it was a concealed crime, the time between the actions and the discovery does not count.

Illegal search and seizure

The laws of California state that individuals have the right to feel secure in their homes or workplaces and are protected from unlawful searches. Even when you are a criminal suspect, a warrant of search is required to acquire evidence for your criminal case. If you can prove that the evidence presented against you in a fraud case was illegally obtained and as a result, your privacy rights were violated, you can invalidate the evidence and possibly get a reduced penalty.

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