Insurance Fraud & Federal Prosecutions
While no particular statute is in place to prevent insurance fraud, because of the nexus with interstate commerce, federal prosecution can still be pursued for a multiple reasons.
Some of the accusations a defendant may be charged with include:
- Mail fraud
- Travel Act
- Racketeer influenced and Corrupt Organizations Act (RICO)
Insurance fraud can be prosecuted for a variety of reasons. Since thousands of Americans are affected by fraudulent activity every year, the federal government has extensive measures in place to contain it.
Insurance transactions and claims often happen through the mail. When this is the case, government authorities could seek prosecution for mail fraud. In order to be accused of mail fraud, the defendant had to be aware that the mail was being used for deceptive purposes. The prosecutor does not have to prove that an individual had even used the mail themselves, as long fraudulent mail was incidental to the overall fraud. Insurance fraud is often tied into this crime, as mailing documents for insurance purposes is very common. Typically, any mail that was used in any part of the scheme will be considered as evidence of mail fraud.
The Travel Act was brought about in order to help local authorities who did not have sufficient means to battle organized crime. Essentially, the Travel Act states that any travel from state to state to with the motive to spread organized crime will be considered a federal offense.
The RICO Act was passed in 1970 in order to prosecute individuals involved in ongoing racketeering in organized crime. Racketeering could mean the act or threat of murder, kidnapping, arson, bribery, or other similar offenses. Individuals who are involved with arson rings are often associated with insurance fraud. Often, arsonist may try to burn down their own houses in order to receive an insurance pay off. When this offense can be proved, it can carry serious consequences for the defendant.