Insurance Benefits Fraud Defence Lawyers
The Criminal Code states that an individual commits fraud when he or she, by deceit, falsehood or other fraudulent means defrauds any individual or the public of any money, property, belonging, service and/or security. The accused must have intended to defraud the individual or public. Fraud happens in a wide variety of contexts and situations and our office has experience handling a variety of fraud related charges, including insurance fraud. Insurance companies are conducting joint internal investigations with the plan member’s employer and providing evidentiary briefs to law enforcement.
The Firm regularly defends plan members facing allegations of insurance fraud from Sun Life Financial, Manulife Financial and Great-West Life Insurance among others. These insurance companies have recently developed sophisticated data mining software to apprehend plan members claiming insurance benefits through mobile apps and online claims. The University Health Network recently recovered 2 Million Dollars for Sun Life Insurance from hospital employees fraudulently claiming, massage therapy and chiropractic services among others.
The English Catholic Teachers’ Association and other Teachers’ Federations have been aggressively investigating, terminating and referring insurance fraud allegations to law enforcement throughout Ontario. The evidence is also being referred to the Ontario College of Teachers for widespread prosecution. The Firm has also represented members of the TTC in complex insurance schemes and acted for Doctors and Dentists accused of inflating or misrepresenting claims for services rendered to a number of insurance companies.
The Firm has successfully defended employees facing allegations of insurance fraud at RBC, Scotiabank, KPMG, PWC, EY, City of Toronto, Air Canada, Members of the Toronto and Catholic Teachers’ School Board, and many other businesses across Canada. The Firm also works for businesses being investigated for insurance fraud stings, including orthotic schemes where numerous employees of the same organization often attend and are collectively investigated. These are joint investigations between the insurer, employer and law enforcement where information is shared and collaboratively gathered for prosecution.
In October 2020, after nearly 18 months of litigation, the Firm resolved a $34,000.00 Sun Life fraud investigation without criminal charges in its Case No. 84****3. Like many insurance fraud allegations, the matter was reported to police and investigated by financial and organized crime. The Firm achieved the result by raising doubt with respect to the admissibility and reliability of the evidence.
In the Firm’s File No. 73****3 it resolved a $3000.00 Sun Life insurance fraud investigation without criminal charges in 2020. The matter was referred to national security for the organization for investigation which is often standard procedure. The Firm further brokered a non criminal disposition in its file File No. 35****2 with Manulife for $10,500.00. False claims were being made for psychotherapy among other things. The Firm was able to establish through legal counsel for the employer, that the employee sought advice from the insurer before making the claims, ultimately raising doubt with respect to intent.
The Firm has successfully represented plan members who are often professionals with no criminal history. In the Firm’s Case No. 83****2, it resolved a 4 year $9000.00 massage, physiotherapy and chiropractic benefits scheme alleged to have been committed by a IT professional without any criminal charges. In its Case No. 53****4, its resolved a $2400.00 benefits fraud by an accountant without any charges. In the Firm’s Case No. 20*****6 it resolved two insurance fraud allegations where an Accountant was alleged to have defrauded two separate large accounting Firms in Toronto, after quitting the first job and migrating to new employment. We were also able to broker a resolution where the employer would not report to law enforcement, ultimately avoiding a criminal investigation. In early 2020, the Firm resolved a $7000.00 benefits fraud allegation without any notification to law enforcement where the plan member was allegedly claiming false massage, physiotherapy and psychotherapy services over several years in its Case No. 2*****1.
In many cases, the Firm has negotiated a resolution without the notification of law enforcement, thereby avoiding charges and a criminal record. Insurance companies will often protect their interests, specifically indicating that any re-payment for questionable claims will not limit the insurers right to consider further action, including referral to law enforcement, employers or regulators.
Many people want to instantly pay back money to avoid potential employment, regulatory and criminal consequences. They often feel that because the value may be low, they will not be prosecuted. Unfortunately, the value is not relevant and the cases with most evidence are likely to be prosecuted more aggressively. Employers will often grant employment amnesty if the employee comes forward and returns the money, however, this does not protect the employee from reporting to law enforcement and/or regulators. This perceived pardon is only for the person’s job which becomes redundant when the are later criminally charged or reported to their regulator. This is especially complicated if the accused is a professional, such as a Nurse, Massage Therapist, Physiotherapist, Accountant, Chiropractor, Dentist, Optician, Pharmacist, Teacher, Social Worker, Government Employee, Unionized Worker or employed in a respected organization.
The insurance companies often demand payment for large sums of money dating back years. Unfortunately, paying this money back whether or not the allegations may be true does not necessarily stop criminal charges, civil prosecution or employment consequences. The Firm has experience defending allegations of insurance fraud across the entire spectrum, including having clients retain the Firm months after payment is made when law enforcement gets involved.
Insurance fraud refers to any act committed by an individual with the intention of obtaining payment from an insurer through fraudulent means. There is a wide array of acts that may be included in the definition of insurance fraud and the severity of the offence may differ significantly between cases. Acts of insurance fraud can range from an individual slightly exaggerating damages in a claim, to an individual lying or omitting something on an insurance application, to an individual deliberately causing damage in order to collect a pay out from the insurance company. In addition to exaggerating or falsifying an insurance claim, omitting information on a claim will also constitute insurance fraud.
In addition to committing insurance fraud in relation to physical property, personal injury insurance fraud may also be committed and is just as serious as a fraudulent insurance claim referencing physical property. Personal injury fraud refers to fraudulent claims made in regards to physical injuries allegedly suffered by an individual in an accident. Personal injury fraud may include exaggerating or inventing injuries on an insurance claim, making claims for pre-existing conditions or injuries that did not result from the accident that is the subject of the current claim, exaggerating the length of recovery time for an injury, or health care practitioners exaggerating or inventing injuries of patients in order to bill more for medical services than were actually rendered.
Those guilty of committing insurance fraud can range from organized crime groups to everyday citizens to health care providers. Health care providers may commit insurance fraud by billing for services that they did not render. This type of insurance fraud is generally more systematic and often results in a large sums of money being defrauded from insurance companies.
Frequently Asked Questions
What is Insurance Fraud?
How Does the Crown Prove Insurance Fraud?
What are the Consequences of Committing Insurance Fraud?
How do Insurance Companies Combat Insurance Fraud?
-Great West Life Assurance Company
-Green Shield Insurance Canada
-The Insurance Board of Canada
Elements of a Crime
Consequences of a Criminal Record
Keeping Your Charges Private
Release from Police Custody
Theft From Your Employer
Vulnerable Sector Screening
What is Insurance Fraud?
Section 380 of the Canadian Criminal Code lays out the offence of fraud; it reads:
380 (1) Everyone who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service,
(a) is guilty of an indictable offence and liable to a term of imprisonment not exceeding fourteen years, where the subject-matter of the offence is a testamentary instrument or the value of the subject-matter of the offence exceeds five thousand dollars; or
(b) is guilty
(i) of an indictable offence and is liable to imprisonment for a term not exceeding two years, or
(ii) of an offence punishable on summary conviction, where the value of the subject-matter of the offence does not exceed five thousand dollars.
(1.1) When a person is prosecuted on indictment and convicted of one or more offences referred to in subsection (1), the court that imposes the sentence shall impose a minimum punishment of imprisonment for a term of two years if the total value of the subject-matter of the offences exceeds one million dollars.
Affecting public market
(2) Everyone who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, with intent to defraud, affects the public market price of stocks, shares, merchandise or anything that is offered for sale to the public is guilty of an indictable offence and liable to imprisonment for a term not exceeding fourteen years.
How Does the Crown Prove Insurance Fraud?
Like any crime, to obtain a conviction, the Crown must prove both that the accused committed an act prohibited by the Criminal Code and also that the individual intended to do so, or had a “guilty mind”. If you have been charged with fraud, the Crown must present evidence in court that proves that you have committed a prohibited act of falsehood, deceit or other fraudulent acts and that those acts caused deprivation of some kind. This deprivation can be a tangible loss or it can be an economic interest being put at risk. In addition, the Crown must prove that you were aware of the fraudulent acts you were committing. The Crown may alternatively prove that you were aware there was a risk associated with the actions you were undertaking and that despite knowledge of this risk you proceeded with the course of action anyway. In cases involving insurance fraud the Crown must also demonstrate that the insurance company was the party deprived of some economic interest.
What are the Consequences of Committing Insurance Fraud?
As with any criminal offence, being charged with fraud in relation to an allegation of insurance fraud is a very serious matter. If you have been charged with fraud due to an alleged false claim against your insurance company, it is important to contact qualified legal counsel immediately. Our Firm has experience handling insurance fraud cases and can guide you through the process in order to obtain the best possible outcome.
Aside from the criminal penalties that result from a fraud conviction (as outlined above in the section entitled “Fraud and the Criminal Code”), there are also possible financial implications. If an insurance company can prove that an insurance claim was made fraudulently they will automatically deny coverage on the claim. This leaves the cost of repairs for any damages or loss of property up to the accused to cover. Additionally, an insurance company may sue an accused for any damages that they may have incurred in relation to the fraudulent claim. Finally, insurance companies are likely to deny future coverage to an individual who has been convicted of an insurance fraud offence.
Being convicted of fraud in relation to a fraudulent insurance claim is a serious offence that could have serious implications on an individual’s employability. In today’s job market many employers require regular criminal background checks before they will employ anyone. Many employers are reluctant to hire an individual with a criminal record, particularly a record of fraud. The best approach is to be totally upfront about your criminal record from the outset.
Having a criminal record can affect an individual’s ability to travel outside Canada. Many foreign jurisdictions are reluctant to admit individuals with past criminal history. Particularly, the United States may refuse entry to those with criminal charges including fraud offences. A U.S. waiver may be required for travel in the U.S. to ensure entry.
Citizenship and Immigration Canada require thorough background checks on everyone admitted to Canada as an immigrant or permanent resident. Having a criminal record can negatively impact your immigration or permanent residency and it is very likely that having a fraud conviction can exasperate the process and possibly cause the application to be denied.
How do Insurance Companies Combat Insurance Fraud?
Insurance companies generally have a rigorous system in place to combat insurance fraud. Larger companies often have entire departments related to the detection, prevention and prosecution of insurance fraud. This is done to keep costs down which in turn allows insurance companies to provide their customers with the lowest rates possible. As such, businesses will often prosecute those who are found to have committed insurance fraud to the fullest extent of the law.
Sunlife financial is a multi-national insurance firm which provides group benefits as well as insurance to health care providers. Like other large insurance companies, Sunlife employs an experienced anti-fraud team whose main task is to detect, investigate and prevent fraud from occurring. Sunlife’s primary method of fraud detection and protection is data mining and the use of algorithms. Data mining refers to collecting and analyzing large amounts of data in order to uncover patterns in the way insurance claims are filed. This allows Sunlife to detect suspicious claims or patterns of claims. Claims deemed to be suspicious are then investigated further by a team of experts. Investigation techniques may include a full analysis of all of the business practices related to a company that filed an insurance claim and surveillance of individuals or businesses. Experts are able to report back to the system indicating which claims were in fact fraudulent and which were legitimate. This allows the anti-fraud system to become smarter over time, improving its overall accuracy.
If fraud is detected after the investigation, Sunlife will generally blacklist that individual or business, refusing to offer them any more insurance. Additionally, Sunlife will not pay out any claims that are found to be fraudulent, and will likely commence civil actions to recover any damages they may have incurred as a result of the fraudulent activity.
Manulife is a large multi-national insurance company with offices all over the world. As such, they are some of the world leaders in insurance fraud detection, prevention and investigation. Manulife’s fraud prevention strategy is to detect and prevent insurance fraud before it even happens or at the very least in the early stages. They employ an experienced team of anti-fraud investigators who work to detect, combat and deter health care fraud and health care abuse as well as group benefits fraud.
Manulife has countless techniques for combating insurance fraud. They utilize a specialized anti-fraud system which is able to quickly and efficiently scan and analyze millions of insurance claims that have been submitted by various customers to determine which are legitimate and which are not. They are able to utilize data from archives they accumulate in order to flag changes in normal billing patterns as well as to monitor the rate at which health care providers prescribe narcotics. Manulife also employs a highly experienced team of consultants, anti-fraud experts, health care providers and law enforcement personnel to assist in analysing data on various claims. This skilled team is in charge of detecting and then investigating any potentially fraudulent claims they come across. In cases where they believe fraud has been committed, Manulife’s Business Integrity department would pursue a criminal prosecution of the accused as well as any potential civil action that will be taken. In addition to detecting and eliminating current insurance fraud, Manulife’s skilled anti-fraud team also consults on how to protect against further insurance fraud.
Great West Life Assurance Company
Great West Life Assurance Company is a Canadian insurance company offering various types of insurance to individuals all over Canada including group benefits. As with other large insurance companies, Great West Life employs a team of highly experienced anti-fraud analysists who work around the clock to detect, combat and prevent insurance fraud. Great Life Assurance uses many of the same anti-fraud techniques as other insurance companies including data mining, the use of algorithms and their experienced team of professionals. Data mining and algorithms are used to detect suspicious claims which are then forwarded to the anti-fraud team for further investigation. In addition, Great West Life Assurance also utilizes random auditing. For example, in 2013 Great West Life randomly audited approximately 180,000 customers who had submitted electronic claims, requiring the customers to submit receipts for the claims. Those who fail to comply with such an audit may have their ability to submit electronic claims suspended.
Once fraud has been positively detected by Great West Life’s experienced team of analysts, they will determine how best to proceed based on the specifics of the case. Responses may include demanding reimbursement for any claim that was paid out, filing a civil lawsuit against the individual who allegedly committed the fraud in order to recover damages, blacklisting the individual from being insured with Great West Life, or even forwarding the information to the police for formal criminal charges to be laid. All of these outcomes will have very serious impacts on the individuals life.
Green Shield Insurance Canada
Green Shield Insurance Canada is a Canadian insurance company offering supplementary health and dental insurance to Canadian’s. This coverage is designed to cover unexpected medical costs not already covered by the provincial government through universal health care. As with all large insurance companies, Green Shield strives to detect and prevent fraud before it occurs in order to protect customers from rising rates. To do this, Green Shield employs various tactics to detect fraud before it has begun, or in its early stages, to prevent it from becoming a larger issue. One of the ways Green Shield does this is through approvals and ratings of health care providers. Prior to listing a health care provider on their website or app, Green Shield will evaluate the provider to ensure they are in good standing with the government of whichever locale they are registered in. Once a healthcare provider has been approved and added to Green Shield’s website or app, their fraud department will continue to monitor the provider, flagging any suspicious claims. The provider will be given a rating by the fraud department, which will determine how future claims that are submitted by that provider will be handled. Healthcare providers with lower ratings will be scrutinized more harshly before any payouts will be made by Green Shield. This allows Green Shield to take a proactive approach to fraud prevention and stop it before it even begins. In addition, Green Shield also actively monitors the customary rates associated with various medical and dental procedures in order to reduce the number of exaggerated claims submitted by health care providers.
The Insurance Board of Canada
The Insurance Board of Canada is a government organization dedicated in part to investigating and preventing various types of insurance fraud in Canada. This includes educating the public on insurance fraud to ensure the public does not unwittingly commit an insurance fraud related offence as well as educating the public to be able to recognize insurance fraud when they see it and the importance of reporting it to the correct officials. The Insurance Board of Canada has an online reporting system that allows members of the general public to report insurance fraud that they believe has occurred. Once a report is filed by a member of the public the Insurance Board of Canada will investigate and determine if fraud has in fact been committed. In situations where they do discover fraudulent activity, the correct authorities will be notified.
What is Insurance Fraud?
Insurance fraud is no different than any other fraud. For the most part insurance fraud is committed by group plan members who falsely claim expenses which were never rendered or are inaccurate. Sometimes the plan member will claim physiotherapy, massage therapy, chiropractor or psychotherapy expenses which were never rendered. These offences are on the rise because plan members can claim services online or on a mobile app without submitting physical receipts.
What are the Consequences for Insurance Fraud?
The consequences are serious and often include employment, regulatory or criminal sanctions. Many times employers will also conduct their own internal investigation upon being notified by the insurer. This information can then be passed off to regulators or the police for prosecution.
Will I loose my Job and get caught for Insurance Fraud?
Employment consequences are common because the employer is often the entity who is defrauded when the member falsely claims expenses. Like stealing from work, employers treat insurance fraud as a breach of trust. The police will consider the amount of evidence, witnesses statements, whether the fraud is an employer or insurer loss and if the crown can prove its case.
Does the Value of the Fraud matter?
No. Insurances companies prosecute plan members irrespective of the value, employers are the same. Allegations of insurance fraud can be as low as $100 or into the tens of thousands.
How far do Insurance Companies look back?
Although insurance companies often recommend plan members retain receipts for 12 months, in practice they can look back 5-7 years. The insurance companies will pull patient health records from providers who are required to retain this information under their regulatory rules and confirm whether the plan member received treatment.
How do people get Caught for Insurance Fraud?
Most times plan members are caught because of a random audit or a questionable expense. Once the member is on radar, the insurance company will then audit the entire claims history for false claims. The insurance companies will then contact plan providers to confirm the validity of claims.
What if I Pay back the Money?
Many people pay insurers back right away with the false hope of avoiding any consequences. For the most part this does not work because the insurances company has to explain to the employer the source of the refund or why premiums may be affected. Lawyers are often contacted at this point where it may be substantially more difficult to mount a successful defence.
What if I come Clean and Apologize right away?
Like criminal charges, generally an apology does not stop the prosecution. It might sometimes help reduce a sentence or penalty, but it rarely gets the person out of trouble entirely. This is often a mistake plan members make only to find they are left with very little defences because they have now admitted to the offence.