Study: Calif. Leads Nation in Fraud Convictions

April 5, 2007

California leads the nation in criminal insurance fraud convictions, according to a study by the Coalition Against Insurance Fraud. According to the study, the Golden State had more than one third of of all convictions generated by state insurance agenices across the United States and had the most resources to fight fraud than any other state.

“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 said.

The study tallied the following statistics:
*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 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 indicated. 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. That enabled the fraud bureau to spend about $28,700 per fraud case in 2005, also the highest total in the nationa, the study said. 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. For more information, visit

Source: CAIF

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