Three Types of Fraud & Their Penalties

When it comes to criminal offenses, there may not be any other offense with more types and variants than fraud. Fraud at its core is simple: attempting to deceive someone by misrepresenting yourself or something you have in order to defraud them is considered a “fraud” offense. However, how this is done can vary widely, and it seems like new types of fraud are appearing regularly.

While fraud laws are intentionally broad and all-encompassing in order to allow for variants that may not fit an existing specific definition, there are certain types of fraud which are expressly dealt with by law, including both in New Jersey criminal codes and federal laws. On our blog, we’ll take a look at three well-known types of fraud and explain what they are as well as the penalties associated with each of them.

Identity Fraud

Identity fraud is the act of posing as someone else with the intent of defrauding them. In most cases this has to do with stealing money from that person or gaining access to their property, but it could also have to do with posing as someone else in order to do things like open credit cards or obtain loans in their name. In some cases, identity fraud may be used to gain access to sensitive, confidential, or even classified information that their victim may have access to.

While it might seem difficult to walk into a bank or loan office and convince someone that you really are someone else who you’re claiming to be, identity fraud has flourished recently because of how much easier it is to remain anonymous. The internet is a massive source of identity fraud, and hackers are constantly looking for information they can steal in order to use to perpetrate identity fraud. Just how common is identity theft these days? According to the Bureau of Justice Statistics, 17.6 million people aged 16 or older were the victim of at least one incident of identity theft in the year 2014 alone.

NJSA 2C: 21-17 makes it illegal to “impersonate” someone, including by stealing their identity. If the benefit of this offense is valued at less than $500, then your charges will be considered a fourth-degree crime, which carries up to 18 months in prison and a fine of up to $10,000. However, more serious offenses can warranty heavier penalties, including long jail sentences, large fines, and even loss of professional licenses.

Prescription Fraud

Prescription fraud is different from many other fraud charges in that those who perpetrate it aren’t usually after money. Instead, their target is controlled substances which they may not have the authorization to possess.

Prescription fraud can be perpetrated in a number of ways, but the most common way today is through a practice known as “doctor shopping.” Doctor shopping is when a patient goes from doctor to doctor for additional opinions on your condition until one is willing to prescribe the drugs they are after. Most of the time, these are highly-addictive drugs that are under heavy regulatory control, including heavy painkillers and opioids.

Unfortunately, this issue has only been exacerbated in the past by prescription drug companies giving doctors kickbacks for every prescription they write for certain drugs. While this practice is now banned, doctors have been found to receive benefits or special treatment from drug companies in exchange for their willingness to prescribe their drugs.

Doctor shopping and other forms of prescription fraud are prohibited by NJSA 2C:35-13, which is considered a third-degree offense. These offenses carry no presumption of jail time, but prosecutors often overcome these presumptions and it’s not uncommon to face sentences of anywhere from three to five years in prison along with fines of up to $50,000.

Insurance Fraud

Insurance companies exist to help you when you’ve suffered a tremendous loss, such as damage to your home, a serious injury or illness, or even a car accident. Generally, insurance companies will only pay you when you’ve suffered one of these losses, but that doesn’t stop people from trying to pretend that they’ve suffered the loss in order to cash in on their policy and pocket the benefits.

Insurance fraud can be either submitting a false claim entirely in hopes of collecting insurance benefits, or falsifying information on a claim in order to increase its value. While it’s not a crime to debate the value of a loss, especially for things like emotional damage, telling your insurance company that you were seriously hurt in a car accident when in reality you’re fine is insurance fraud. Likewise, it’s also against the law to knowingly omit information about your claim that may mitigate your award.

Insurance fraud is prohibited by NJSA 2C: 21-4.6, which consider it a third degree offense.