16 Mar 21

New York Penal Code 176.45: Life settlement fraud in the fifth degree

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Last Updated on: 17th August 2023, 06:40 pm

An Overview of Life Settlement Fraud

In order to understand the nuances of life settlement fraud, it’s important to have a basic understanding of life settlements in general. Put simply, a life settlement is a transaction between a life insurance policy owner and an insurance provider. The policy owner sells their policy in exchange for cash up front, which allows the purchaser to then make a profit when the insured dies. Life settlement fraud can occur for a variety of reasons, but is primarily the result of a policy owner intentionally misleading potential buyers on the health risks of the insured. In the case of life settlement fraud in the fifth degree, this specifically occurs when an insurance fraud act results in the recipient making less than $1,000.

Life Settlement Fraud Example

As previously mentioned, life settlement fraud typically occurs when a person is dishonest about the nature of their health, in order to increase the value of their life insurance policy. Investment firms are interested in generating as much of a yield from life settlements as possible, so they’re more willing to pay cash up front if they believe that there will be a greater return in the near future. When someone with a life insurance policy attempts to abuse this information to make it appear as if they only have months to live, when they know this is not the case, then it could result in a life settlement fraud case.

Defending Against a Life Settlement Fraud Case

The best way to defend against a life settlement fraud case is to prove that any misinformation involved in the transaction was not the result of malicious intent. NYC criminal lawyers can help prove that a life settlement was made in good faith, even if the insured ending up greatly outliving the new policy owner’s expectations. In general, this is also the same line of defense pursued for many other forms of insurance fraud, as intent is a central component of these types of cases.

Life Settlement Fraud Sentencing

Since life settlement fraud in the fifth degree is only a class A misdemeanor, sentencing can only amount to up to one year in jail and a fine. Depending on the judge, the sentenced could also face up to three years on probation.

Unfortunately, many people mistakenly believe that because life settlement fraud in the fifth degree is only a misdemeanor, it is not worth putting effort into their defense. In reality, even a misdemeanor like this can have serious consequences on a person’s future. Aside from the fine and probation, cases like this can result in a person spending up to a year in jail. It is for this reason that it’s worth taking seriously, and is also why contacting a lawyer is highly recommended.

Due to the seriousness of even a misdemeanor involving life settlement fraud, it’s worth also keeping this in mind for any future life settlement transactions. Anyone considering a life settlement transaction should ensure that they are fully educated on the specifics of the policy, as well as ensuring that they’ve done everything they can to provide correction information to any potential buyers. Aaron Villinaueve from Zooomr car leasing claims that life settlement fraud is one of the most popular ways of committing financial fraud, even when it comes to car lease financial fraud. Always keep in mind that even a life settlement fraud in the fifth degree case can end up with someone going to jail, and that’s only for making less than $1,000 on an intentionally bad transaction.