New Jersey defines insurance fraud at N.J.S. 2C:21-4.6. Insurance fraud in New Jersey consists of making and submitting a false, fictitious, fraudulent, or misleading statement in connection with insurance. These kinds of statements can be made in connection with an application for insurance, as well as in connection with an insurance claim. It also includes omitting a statement of material fact. The statement, or omission, must be done knowingly. Thus false statements or omissions resulting from mere negligence are not included within the definition of insurance fraud.
To constitute insurance fraud, the fact contained in, or omitted from, the statement must be material. The statement or omission can be in connection with any record, bill, claim or other document. Its form can be written, electronic, oral, or anything else. Thus presumably, under New Jersey's definition of insurance fraud, smoke signals would satisfy the requirements. The statement or omission must relate to any of the following:
- A claim for payment, reimbursement or other benefit pursuant to an insurance policy, or from an insurance company. Claims made with agencies administering the New Jersey Unsatisfied Claim and Judgment Fund Law are also included;
- An application to obtain or renew an insurance policy. One example of this would be concealing on an application for car insurance, or application for car insurance renewal, that the car is used for business. Another example would be misstatements concerning the actual address of the car's owner, or who its regular driver is. A non-automotive example might be failing to report preexisting conditions, when asked on an application for health insurance;
- Any payment made or to be made in accordance with the terms of an insurance policy or premium finance transaction; or
- An affidavit, certification, record or other document used in any insurance or premium finance transaction.
The statement need not be made directly to an insurance company. Thus false statements in a police report, for example can, under certain circumstances, qualify as an act of insurance fraud.
New Jersey separates insurance fraud into two levels of seriousness. Those levels are crimes of the third degree, and crimes of the second degree. To try to put this into perspective, third degree crimes can be thought of as “serious.” Second degree crimes can be thought of as “very serious.” It is virtually certain that when a judge imposes sentence upon a person convicted of a second degree crime, that sentence will contain a term in state prison. The prison term will be for several years. Persons convicted of a third degree crime are exposed to a state prison term of up to five years. However, on conviction for a third degree crime, it is often possible to avoid prison.
So what determines whether insurance fraud is a second degree crime, or a third degree crime? Insurance fraud is a second degree crime when two conditions exist. The first condition is that the person must have committed five or more acts of insurance fraud. The second requirement is that the total value of property, services or other benefit wrongfully obtained, or sought to be obtained, be at least $1,000.00. Unless both of these conditions are met, insurance fraud is a third degree crime. New Jersey law allows the State to aggregate five or more separate acts for the purpose of increasing the seriousness of the crime to a crime of the second degree.
The insurance fraud statute states that multiple acts of insurance fraud that are contained in a single record, bill, claim, application, payment, affidavit, certification or other document shall each constitute an additional, separate and distinct offense. The Supreme Court of New Jersey appears to have fine-tuned its interpretation of the statute. According to the Supreme Court, every separate document constitutes an act of insurance fraud, even when made in connection with a single claim. Thus a report to police, an oral report of the alleged theft to automobile insurer, and an affidavit submitted to an insurer, all in support of just one claim, are three acts of insurance fraud under insurance fraud law. However, multiple misstatements of fact within a single document will be considered to be just one “act.” The Supreme Court set forth that interpretation in a case called State v. Fleischman, 189 N.J. 539, 553-554 (2007), with this explanation:
We reject the argument that more than five “acts” of insurance fraud were perpetrated by defendant when she made three statements in support of her fraudulent insurance claim. We hold that when a defendant provides to officials in connection with a fraudulent claim a document or oral narrative that contains a material fact or facts relating to the claim, each such document or narration is a “statement” equating to an “act” of insurance fraud. Although we recognize that there can be multiple “statements” in a single document or narration, for example when a document's or narration's contents relate to a separate claim of loss (the fur coat example), we reject the assertion that the Legislature intended every discrete fact within a narrative assertion about a single claim would amount to an “act” of insurance fraud.
In its efforts to combat insurance fraud, New Jersey has established the Office of Insurance Fraud Prosecutor . That office is within the New Jersey Division of Criminal Justice. The New Jersey Division of Criminal Justice, in turn, is under the Attorney General of New Jersey.
Persons charged with insurance fraud in New Jersey need experienced criminal defense. Allan Marain and Norman Epting, Jr. are New Jersey criminal defense lawyers. Their combined experience in New Jersey criminal defense exceeds sixty-five years. Both are familiar with New Jersey insurance fraud defense. Both are available to put their knowledge and experience to work for you.