Intent to Defraud and Penal Code Section 550

Overview

California Penal Code Section 550 deals with insurance fraud. It makes it unlawful to knowingly present or cause to be presented any false or fraudulent claim for the payment of a loss or injury, including under a contract of insurance. This includes:

• Presenting multiple claims for the same loss or injury with the intent to defraud.

• Causing or participating in a vehicular collision for the purpose of presenting a false claim.

• Making false claims for health care benefits.

Common Usage

This statute is often used against doctors and attorneys on the theory that they are operating personal injury or workers' compensation practices and over-treating and over-claiming to improve personal injury or workers' compensation recoveries.

Basic Elements of the Crime

1. The defendant's knowing presentation of a false claim.

2. The intent to defraud.

It is not necessary that anyone actually be defrauded or suffer a financial, legal, or property loss as a result of the defendant's acts (See: CALCRIM No. 2000, which is the instruction read to a jury to explain the crime).

Defense to a Penal Code Section 550 Claim

The defense is usually split into two parts:

1. Was the insurance company fooled (defrauded)?

2. Did the doctor or lawyer purposely fool the insurance company?

This intent to fool is a high burden for the prosecution. As outlined below, this is a specific intent to defraud—not accidental, not reckless. It is a deliberate intention to violate the law. Under Evidence Code section 665, “A person is presumed to intend the ordinary consequences of his voluntary act,” but in the criminal context, this does not apply. The same code says that, “This presumption is inapplicable in a criminal action to establish the specific intent of the defendant where specific intent is an element of the crime charged” (Evid. Code, § 665). This means the prosecution must show not only that a false claim was presented but that the doctor or lawyer knew the claim was false and deliberately participated in submitting this false claim.

Prosecution Requirements

To succeed on Section 550 claims, the prosecutors must show that “The defendant must specifically intend to defraud a person with a false or fraudulent claim” (See, e.g., Banerjee v. Superior Court (2021) 69 Cal.App.5th 1093, 1119).

Some prosecutors have argued that Penal Code section does not specifically state that a specific intent (the highest level of intent) is required. This argument should be rejected.

The court in People v. Blick 153 Cal App 4th 759 discussed an earlier case that established the need for a specific intent. “A specific intent to defraud may be an implied element in a criminal statute making unlawful certain false or fraudulent claims, where the statute in question omits any other element of intent” (People v. Dieguez (2001) 89 Cal.App.4th 266, 279). Subdivision (a)(1), the language of section 550(b)(3) is not “clear and unambiguous” on the issue of intent when viewed in the context of section 550 as a whole, nor does it contain a “built-in” specific intent requirement. The court in Dieguez noted, specific intent to defraud is imputed in section 550 “where the statute ... omits any other element of intent” (Dieguez at 279).

Legal Representation

Penal Code section 550 charges are among the most commonly filed and most commonly abused charges. A certified criminal defense attorney is your best choice to defend these charges. Daniel Horowitz and Lawyers in Lafayette have three criminal defense specialists who are certified by the California State Bar Board of Legal Specialization.