Premium Diversion Insurance Fraud Explained By NY Criminal Lawyer
Policyholders pay insurance premiums with the understanding those premiums purchase protection from financial loss if a covered event occurs. In some cases, however, premiums paid are diverted and misappropriated. When this happens, those who thought they have coverage may be left unprotected.
Because premium diversion undermines confidence in insurance markets and can cause significant financial damage to individuals without proper insurance protection, police and prosecutors take premium diversion cases very seriously.
If you are being investigated for suspected involvement in a premium diversion scam, or if you have been charged with a state or a federal crime, call Bukh Law Firm, PLLC so you can get help responding to your charges. You may be able to stay out of jail and avoid other serious legal consequences with an aggressive defense or an experienced lawyer negotiating a plea deal. Let us help you understand your options and respond to charges.
What is Premium Diversion?
Premium diversion involves the embezzlement of funds that individuals or businesses believe are being paid to an insurance provider. Brokers, managing general agents, and insurance agents are among those who may be in a position where it is possible to collect money under the guise that the funds are going to pay for an insurance policy. Premium diversion may occur with any type of insurance coverage, including workers’ compensation insurance, professional liability insurance, home insurance, automobile insurance, renter’s insurance, and health insurance.
Premium diversion is a crime, and anyone involved in the scam in any capacity can be charged. Bukh Law Firm, PLLC has provided legal representation to insurance agents, brokers, and others in the business who have been accused of wrongdoing.
How Does Premium Diversion Work?
Premium diversion generally takes one of two forms:
- Insurance professionals, like brokers or agents, collect money from clients for the purchase of insurance and do not submit the payments to an underwriter or insurance company.
- Insurance is sold without a license and premium income is collected with no intention of providing payment if claims arise.
In many cases, those involved in premium diversion scams will create false documentation to make those paying believe that they are covered and protected. The scam may go on unidentified for many years, until policyholders try and fail to make a claim for coverage. Law enforcement may need to unravel years of complicated financial records to determine where the money went, who diverted it, and how the scam worked. Arkady Bukh has a long track record of representing clients accused of serious federal and state crimes in NYC TOP RATED ON: SUPER LAWYERS, AVVO, NATIONAL TRIAL LAWYERS
Top Rated Criminal Lawyer
Arkady Bukh has a long track record of representing clients accused of serious federal and state crimes in NYC
TOP RATED ON: SUPER LAWYERS, AVVO, NATIONAL TRIAL LAWYERS
Penalties for Premium Diversion
Premium diversion may be considered a form of larceny or embezzlement. New York state defines different larceny and theft offenses in Article 155 of the Penal Code. A defendant may be charged with petit larceny, or grand larceny in the fourth through the first degree.
Larceny in the first degree involves the theft of $1 million or more in property. The offense is a Class B felony, which could result in a maximum prison sentence of 25 years imprisonment. The amount of money involved in a premium diversion scam determines what degree of larceny you are charged with. Larceny is a felony in New York as soon as $1,000 or more has been misappropriated.
In addition to state larceny charges, a defendant who has participated in a premium diversion scam could face other state or federal charges including being indicted for mail fraud, wire fraud, falsifying business records, and money laundering. The jail terms if convicted of these offenses can be lengthy. Restitution may also be required, and a defendant may have financial accounts frozen and assets seized.
A NY Insurance Fraud Lawyer Can Help Those Accused of Premium Fraud
Defending yourself from accusations of premium fraud requires a knowledge of the law, a knowledge of the Constitutional protections applicable in your situation, and an understanding of legal arguments you can make.
Bukh Law Firm, PLLC is dedicated to fighting for the rights of all clients to be considered innocent until proven guilty and we are committed to helping you navigate the justice system effectively to try to avoid conviction. We’ll bring decades of legal experience to the table to help you try to minimize penalties or raise defenses so you could be found not guilty of premium fraud. Give us a call today to learn more about how we can help.