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NY Penal Law § 176.30: Insurance Fraud in the First Degree

July 6, 2020 Federal Criminal Attorneys

Insurance fraud is among the white collar crimes that entails deceiving an insurance company in order to receive insurance money.  There are numerous different ways one can commit insurance fraud. For example, if your home gets burglarized, and you lie to the insurance company about what was taken so that you can get a larger amount of money from the insurance company, then you would have committed insurance fraud. Another method of committing insurance fraud is to provide inaccurate information to your auto insurance company about where you live in order to reduce your premium amount. 

Some people purposefully set their homes, cars or businesses on fire in order to collect insurance payouts. In extreme cases, there are those who have been known to actually fake their deaths for the purpose of collecting the death benefit of a life insurance policy. 

There are a number of different insurance fraud offenses listed in the New York criminal code. If you carry out a fraudulent insurance act, the specific insurance fraud crime you will face will depend on several different factors, such as the type of insurance plan involved and the amount of money you received or attempted to receive.  One of the most egregious insurance fraud charges you can face is insurance fraud in the first degree. This crime is a class B felony. Pursuant to New York Penal Code § 176.30, you will be charged with the crime of insurance fraud in the first degree if you commit an insurance fraud act and thereby obtain or attempt to obtain property with a value of more than $1 million.

Examples

Billy O’Shaughnessy was an art buff.  His passion was pre-Columbian artwork. To his insurance company, he reported that his office was burglarized.  He submitted a claim for more than $1 million in stolen art. The insurance company paid out the full amount that he claimed. A few months later, the art that Mr. O’Shaughnessy had claimed was stolen was recovered from a locker in Grand Central Station. The police had reason to believe that Mr. O’Shaughnessy had faked the burglary and stashed the art at Grand Central Station as part of a plan to defraud the insurance company.  Based on the amount of Mr. O’Shaughnessy’s insurance claim, he was charged with insurance fraud in the first degree.

Bentley Lane’s store, Bentley’s CD Spot, had burned down to the ground one evening. The contents of the store were insured for $200,000, while the building itself was insured for another $300,000. Bentley filed a claim for the loss with his insurance company.  The claims investigators found proof that Bentley had been the one to set the fire. In this scenario, Bentley could be charged with insurance fraud in the first degree on top of an arson charge.

Offenses that are Related

Life settlement fraud in the first degree: New York Penal Code § 176.65

Health care fraud in the first degree: New York Penal Code § 177.25

Insurance fraud in the fifth degree: New York Penal Law § 176.10

Insurance fraud in the fourth degree: New York Penal Law § 176.15

Insurance fraud in the third degree: New York Penal Law § 176.20

Insurance fraud in the second degree: New York Penal Law § 176.25

Possible Defenses

You could not be prosecuted on an insurance fraud charge if you did not have intentions of defrauding the insurer. For example, if you put in a claim for property loss from a burglary, but you did not realize that the specific item was removed by a family member before the burglary took place, then you would not have committed an insurance fraud crime. Likewise, if the claim is connected to vehicle damage in an accident, and you mistakenly include damage that really occurred in a previous incident, then here again, you would not have committed insurance fraud.

The Sentence

Insurance fraud in the first degree is categorized as a class B felony offense.  If you are convicted, the judge could send you to jail for up to 25 years and you could be required to pay a fine. Additionally, the judge could sentence you to serve a probation term of 5 years. On top of that, the judge may order you to pay restitution to the insurance company if you did get a payout from them.

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