1. Assuming You Will be Forgiven by Apologizing
One of the most common mistakes people make when dealing with an insurance benefit fraud investigation is immediately admitting to everything. Many people have the misconception that if they are honest and tell the truth, they will be given leniency. Others think that because they were a good employee, were well respected or had been with the company for a long time, they will be given a second chance.
This is almost never the case. When dealing with insurance benefit fraud investigations, even the most trusted, well respected, long time employee may face termination, criminal charges or be sued in civil court by their employer or the insurance company.
In many cases, especially in larger companies, reporting policies and shareholder duties are triggered once an employee admits to engaging in fraud related to their employee benefits. In companies with shareholders, there is often a duty that must be discharged, which in many cases may mean pressing charges against an employee who commits fraud.
In many cases, immediately admitting to the fraud and apologizing will do more harm than good for the benefit holder. Firstly, it is unlikely that the apology will hold any weight at all. Just as you cannot apologize your way out of criminal court, you cannot apologize your way out of defrauding your employer or insurance benefit plan provider. Secondly, once you have admitted and apologized for the alleged fraud, it is very easy for your employer or the insurance company to have you charged and convicted and/or sue you in civil court. Finally, if the fraud is reported to law enforcement and charges are laid, the Crown attorney may use any admissions to the employer or insurance company as evidence in the criminal case. This is discussed more in detail below.
2. Running Away Won’t Save You
Insurance fraud investigations take a long time. In some cases, the long periods between contact from the insurance company can lull people into a false sense of security. Many individuals believe that if the insurance company has not reached out for several months the matter must have resolved itself and gone away. This is almost never the case. The insurance company will never just “go away” when it comes to potentially fraudulent behaviour. While they may not contact you for several months at a time, this does not mean they are not still investigating.
Similarly, running away from the insurance company will not stop an investigation. Some individuals believe that if they leave their job the insurance company will not be able to find them or won’t bother going after them. This is untrue. It is not relevant whether you are still working for that employer, the insurance company will still attempt to collect on their losses.
Furthermore, for professionals such as nurses, doctors and teachers who are regulated by a College, being accused of defrauding your employee benefit plan may also trigger an investigation from the appropriate College. This, in turn, can impact an individual’s ability to practice in their given profession.
In situations where an employee refuses to participate in the investigation in any way, the insurer will proceed without evidence from the accused individual, deciding in their absence.
3. You Could be Criminally Charged and/or Sued
A common misconception many people hold when dealing with an insurance fraud investigation is that the consequences will only impact their job. Many people believe the worst that can happen if they get caught defrauding their employee benefits is that they may be terminated. While it is likely that an individual caught defrauding their insurance benefits will be terminated, it is also possible for the individual to be criminally charged with fraud and/or be sued in civil court.
If an individual’s employer or the insurance benefit provider decide to report the alleged fraud to police, a benefit holder could be charged with either fraud under $5,000 or fraud over $5,000 depending on the value of the fraud. An individual who is convicted of either of these offences will have a criminal record which can have many negative implications on an individual’s life. Further, those who are convicted of fraud may face a period of incarceration.
Fraud Under $5,000
Where the Crown proceeds by summary conviction, an accused who is convicted will face a maximum of two years less a day in prison and/or up to a $5,000 fine. Where the Crown proceeds by indictment an accused will face a maximum of two years in prison upon conviction.
Fraud Over $5,000
Fraud over $5,000 is a straight indictable offence. Those who are convicted will face a maximum of fourteen years in prison.
It is also important to note that there is no limitation period on when an individual can be charged for fraud if the Crown elects to proceed by indictment. This means that an individual may be charged and convicted of a fraud offence years, or even decades after the offence is committed.
4. Forgoing Documents will make things Worse
In some situations, individuals may attempt to create receipts for services they did not receive or alter receipts for services they did receive. This is a big mistake. Not only will this not help your case, but it may lead to additional criminal charges being laid if law enforcement gets involved.
When receipts are provided to the insurance company in the course of a fraud investigation, they will be diligently verified with the service provider, confirming that the client attended the service provider on the date on the claim and paid the amount listed on the claim. If any of the details do not match, the insurer will deem the claim fraudulent.
Since insurers verify all receipts, it is very likely that an individual who submits fraudulent receipts will get caught. This may make the insurer more willing to contact law enforcement. If law enforcement is contacted as a result, the individual may face charges for fraud as well as charges for forgery and/or use, trafficking, or possession of a forged document.
5. Anything you Say can and Will be Used Against You
It is important to be aware that anything you say to anyone from your employer or from the insurance companies is likely being recorded and may be used against you in the future. This includes any admissions and/or utterances. Insurance companies are private entities, meaning the Charter of Rights and Freedoms does not apply. This means individuals accused of defrauding their insurance benefit plan have fewer rights and protections during the insurance companies’ investigation than they would during a police investigation.
Anything you say to the insurance company could also be brought in as evidence against you should the insurance company or your employer take their allegations to the police. The admission of such evidence in a criminal or civil trial could lead to the individual being convicted or ordered to pay the money back plus interest and court costs.
Since the Charter does not apply and individuals have fewer rights, insurance companies can get away with a lot more during an investigation. As a result, it is important to protect your rights as soon as the insurance company has brought any discrepancies to your attention. As a general rule, apologizing and paying back the money will not stop the investigation and will not protect you from being arrested or sued.
6. If you Are a Regulated Professional Your License Could be Affected
For individuals who are regulated professionals such as accountants, nurses or teachers, an employee insurance benefit fraud investigation could also trigger an investigation from the respective regulatory body.
At the completion of the insurance companies’ investigation, if the professional is found to have committed insurance benefit fraud, the appropriate College may be notified by the individual’s employer. In other cases, the College may have self-reporting regulations, requiring the professional to report the fraudulent behaviour to their regulatory College on their own. If criminal charges are laid, this could complicate matters with a regulatory body even further.
Each regulatory body prosecutes professionals under their mandate in a different way. Professionals who are found to have committed a criminal offence could be found guilty of misconduct by the regulatory body. This could result in conditions being applied to the Member’s license or the Member’s license being revoked or suspended.
7. Your Immigration Status could be Impacted
Individuals who are not Canadian citizens may face additional consequences if they become involved in an insurance fraud investigation. If the individual is charged with a fraud offence as a result of the investigation, their immigration status may be impacted. Those are convicted of certain crimes may be deported from Canada as a result.
Fraud over $5,000 is a straight indicatable offence. Being convicted of this offence and sentenced to a period of incarceration may lead to deportation. If you have been accused of insurance benefit fraud and are not a Canadian citizen, it is important to contact counsel to determine how the investigation could impact your immigration status.
If your insurance company has brought discrepancies in your insurance claims to your attention, it is important to contact experienced legal counsel as soon as possible. If contained early on, it is possible to settle the matter without involving law enforcement. Donich Law has experience defending individuals accused of stealing from and defrauding their employers and regularly achieves favourable outcomes for our clients.
Could I be Criminally Charged?
In some cases, yes. Once your employer or insurance benefit provider determines you have committed benefit fraud, they may choose to refer the matter to police. If the police become involved, you could be charged with fraud under $5,000 or fraud over $5,000.
Will I lose my Job if I am being Investigated for Insurance Benefit Fraud?
In many cases, yes. If the insurance company determines that you have abused your benefit plan or committed insurance fraud, they will report this to your employer. If this happens, you will almost certainly be terminated as a result.
Will I lose my License if I am a Regulated Professional?
If you are found to have committed insurance benefit fraud and are a regulated professional, it is possible that the regulatory body will be notified. In some cases, there may even be self-reporting requirements. Once reported to the regulatory body, they may launch and investigation of their own to determine whether you have committed professional misconduct.
Will by Immigration Status be Affected?
If you are not a Canadian citizen and are found to have committed insurance fraud, your immigration status could be affected. If the insurance company reports the matter to law enforcement and charges are laid, this could have negative implications on an immigration application.
Will I go to Jail if I’m caught Committing Benefits Fraud?
In some cases, yes. When determining the appropriate sentence for an individual convicted of a fraud offence the Court will consider many different factors. The value of the fraud, the facts and circumstances surrounding the commission of the offence, and the accused’s criminal history are all relevant factors.
Will my Future Employers Find out?
If you have been terminated because of insurance benefit fraud it is possible that future employers will find out. If you have been criminally charged and have a criminal record as a result, it is likely that any future employer who runs a background check will see the charge.
Are the Police always Notified?
No. While the insurance company and your employer both have the ability to report insurance benefit fraud to police, that does not mean they will. If you have been accused of insurance benefit fraud it is important to contact legal counsel to help you navigate the process and avoid the matter being reported to the police.