What are the penalties and laws for committing auto insurance fraud?

Committing Fraud is one of America's most common criminal activities. It costs the country over $80 billion worth of damages per year, and is tried and violated under Federal Law as well. Some forms of insurance fraud become more serious than others; faking a death and collecting on a huge insurance policy, defrauding your company with fake accounting statements that end up costing millions upon billions of dollars of damages (i.e. Enron). Fraud cases such as that can get you 25 to life in prison and massive fines.

Insurance companies are well aware of  the frequency and nature of insurance frauds and thus have systems in place to carefully audit all their claims. The discovery process of identifying false or fraudulent claims can take as long as 5 years after they have actually occurred which then eventually become prosecuted. So even though their friends they know gotten away with it for now, they can later very likely get caught and prosecuted.

For staged auto accidents, the prosecuted are both tried on the civil and criminal side. The insurance company on the civil side would collect for the damages, and on the criminal side you would get prosecuted for a host of possible convictions such as perjury, money laundering, lying to the police, insurance fraud, theft larceny, etc. Each state has separate laws surrounding this matter, but prison time, felony convictions, and fines of $10,000+ or more are definitely not out of the question. The fraud case will also go on your permanent record making it very difficult with matters such as obtaining employment and getting adequate car insurance in the future.

These cases are however rather complicated and hiring a Criminal Defense Attorney would be highly advisable. The extent of the monetary damages caused, documented evidence, and severity of the fraud will all be taken into consideration. Many Fraud victims plead not guilty and fight the case in court, while 55% have been known to plea guilty. A criminal defense attorney would definitely aid in guiding you to chose the best defense options, help fight the various charges, and reducing penalties. Not hiring an attorney to defend this type of charge would surely land you some pretty hefty penalties and jail time.