What Are The Penalties For Insurance Fraud In Texas?
One of the most common white collar crimes prosecuted in Texas is insurance fraud. The state Penal Code defines insurance fraud as the act of filing a statement containing “false or misleading material information” to an insurance company with the intent to “defraud or deceive.” In layperson’s terms, if you lie to your insurance company with the goal of getting them to pay out a bogus claim, you have committed insurance fraud.
Insurance FraudInsurance fraud may not sound like a big deal. But as is often the case with theft-related offenses, the severity of the criminal charge is tied to the amount that is defrauded. For instance, if the value of the fraudulent insurance claim is as little as $2,500, that is a state jail felony. Indeed, it is possible to face first-degree felony insurance fraud charges when the amount of the claim is $300,000 or more. This means that insurance fraud can lead to some serious jail time.
Houston Man Sentenced to 10 Years After Misleading Insurer About Car TheftTake this recent case from the Texas First District Court of Appeals, Black v. State. This case involved a 2015 Cadillac Escalade valued at around $99,000. The owner of the car–the defendant–reported the vehicle stolen to the Houston Police Department. The defendant said he knew where the vehicle had been taken and requested police assistance in its recovery.
A Harris County Sheriff’s Office deputy met the defendant at the location he identified. The defendant used a key fob to “activate” the Escalade, which was apparently in the garage of a private residence. The deputy later testified he “heard something” when the defendant used the key fob. The deputy knocked on the door of the house but there was no answer. The deputy asked the defendant to return with him later in the day to speak to the owner of the house, but the defendant never appeared.
The defendant later filed a claim with his auto insurer, USAA, for the Escalade. The USAA claims adjuster became suspicious, however, because the defendant told the police the vehicle was stolen one week before the date he gave it to the insurer. A USAA investigator later determined that the defendant “reported his car stolen one day before he insured it.” USAA denied the claim and prosecutors charged the defendant with insurance fraud for providing false or misleading material information–the date of the theft–to his insurance company.
The amount of the defendant’s insurance claim–roughly $100,000–classified the insurance fraud charge as a third-degree felony under Texas law. This carries a prison sentence of between 2 and 10 years. And in fact, after a jury convicted the defendant, the trial judge imposed the maximum sentence–10 years. The First District later rejected the defendant’s appeal of his conviction and sentence on various procedural and constitutional grounds.