Insurance Fraud

California’s Fraud Bureau Leads Nation in Convictions, Study Reveals

WASHINGTON, April 5, 2007 – California’s insurance fraud bureau leads the nation in criminal convictions -- more than a third of all convictions generated by these state agencies across the U.S., reveals a new study by the Coalition Against Insurance Fraud. “The high rate of successful prosecutions in California reflects the aggressive investigative prowess of the fraud bureau in the state’s insurance department, and is a testament to having prosecutors in the district attorney’s office who work exclusively on insurance cases,” the coalition’s study says. The study is a barometer of the nation’s annual progress against insurance fraud. It’s the only national statistical snapshot of these state anti-fraud agencies, which are fighting an $80-billion crime annually. The results were compiled from official figures reported by the 47 state fraud bureaus. Convictions: The Golden State’s fraud bureau unit logged 1,546 criminal convictions in 2005, ahead of Florida’s 493 convictions. Case leads received: California leads the nation with 27,687 case leads the fraud unit received in 2005. This is slightly ahead of New York, which received nearly 26,000 leads. Leads come from a variety of sources such as insurance companies, local law enforcement, calls to the fraud hotline, and leads the fraud unit’s own investigators uncover. Cases presented for prosecution: California ranks second nationally in cases it presented for potential criminal prosecution. Its 754 cases stand slightly behind Florida with 773 for 2005. Open investigations: Whether the state’s case pipeline—and downstream convictions—will remain at current levels remains a question. The fraud bureau stands only fifth in overall in open investigations. Its 1,250 cases rank well behind New Jersey’s total of 2,977. “Caseloads are key indicators of activity level and the level of fraud overall within the state,” the study says. The lower ranking thus could suggest lower overall activity level, or possibly fewer but larger and more complex cases such as staged-accident rings. Resources: California’s fraud bureau brings more resources to the fraud fight than any other state. The unit’s top-ranked $36.8-million budget in 2006 was well ahead of New Jersey’s $29.7 million. This enabled the fraud bureau to spend about $28,700 per fraud case in 2005, also the highest total in the U.S. The unit also reported a nation-leading 298 employees, ahead of runnerup New Jersey’s 270. “These resources reflects both the sheer size and persistence California’s fraud problem, plus an aggressive response to the crime,” says the Dennis Jay, the coalition’s executive director. The Coalition Against Insurance Fraud is a nonprofit alliance of consumer groups, insurers and government agencies combating all forms of insurance fraud. Visit www.InsuranceFraud.org.

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