What Happens If You Accidentally Commit Fraud
When filling out insurance information or filing taxes, many people wonder, am I doing this right? And if I’m not, am I going to be charged with fraud? Accidental fraud is more common than you might think; here’s what you should know.
Types of Accidental Fraud
Accidental fraud usually occurs for one of two reasons: by error or unknowingly.
Fraud Occurring from Error or Unknowingly
This type of fraud occurs when an individual unintentionally gives inaccurate or wrong information in a claim or when filling out documents. For example, making math errors when filing taxes. These are simple mistakes that were not made in an attempt to benefit from financial gain. Instead, they were oversights.
It’s also possible that an individual commits fraud intentionally, but without knowing it is illegal or thinking that what they are doing isn’t substantial enough to be considered fraud.
Common Ways People Accidentally Commit Fraud
There are numerous ways in which someone may accidentally commit fraud. However, there are a few situations where this happens more frequently.
During tax season, it’s common for people to joke about accidentally committing tax fraud simply because they are unsure of what they’re doing or feel unorganized. There is some truth to this.
Accidental tax fraud can occur due to:
- Filing a return with incorrection information
- Falsely claiming the Earned Income Tax Credit
- Claiming the wrong deductions
- Underreporting income
If you are concerned that you have committed fraud from error or unknowingly on your taxes, it’s a good idea to check in with an accountant or attorney.
Credit Card Fraud
It is estimated that Americans have over 500 million credit cards. In fact, the average American is believed to have about four cards. With all of these credit cards in circulation, there is bound to be both intentional and unintentional credit card fraud.
You may be unknowingly committing credit card fraud by:
- Using someone else’s credit card
- Using fake credit card numbers to sign up for free trials
- Disputing charges you forgot you made
- Lying on a credit card application
While you may think these uses or errors are unsubstantial, you may face unexpected credit card fraud charges in the future.
The insurance industry is highly monitored; investigators are always on the lookout for cases of insurance fraud. If you made an error on your report, left out information, or failed to update your insurer of important information, you could be charged with insurance fraud.
Intent to Defraud
You may be wondering, if you have accidentally committed one of the above offenses, are you at risk of criminal charges?
Fraud is defined as intentional deception to secure unlawful gain or deprive another of their money, property, or legal right. The keyword in this definition to focus on is intentional.
If you accidentally commit fraud, you have no intent to deceive or scam anyone. Instead, the fraud you committed was a simple mistake. By this definition, you cannot be convicted of a fraud crime for an honest mistake. However, you may still be charged. In this case, you will need to contact a fraud defense attorney who can help prove that you accidentally committed fraud.
Once it has been proven that you did not intentionally commit fraud, you may be charged with negligence or negligent misrepresentation instead, which can also result in penalties.
Potential Penalties for Fraud
Since many types of fraud can occur in varying degrees of severity, there is a wide range of potential penalties for fraud crimes.
Federal fraud crimes are punishable by:
- Over 10 years in prison
- Expensive fines of up to $1,000,000
- Restitution payments
If you are instead found guilty of negligence, you face civil penalties. You may be required to pay a penalty of about 20% added to your tax obligation.
Fraud Crime Defense Attorneys
Even if you know you did not mean to commit fraud, that isn’t always so clear to the IRS, insurance companies, and prosecutors. At Jeffrey S. Weiner, P.A., we can help prove that you committed fraud by error or negligence and that you did not have the intent to defraud anyone. These are complicated cases; reach out as soon as possible to get started on your defense.
Click here to set up an initial consultation with our Miami-based defense attorneys.