What Are the Penalties for Insurance Fraud in Arizona?
Insurance fraud in Arizona is aggressively investigated and prosecuted because it directly impacts insurance companies, policyholders, and the public. What many people believe is a minor mistake on an insurance claim can quickly turn into insurance fraud charges in Arizona, carrying felony exposure, severe legal consequences, and long-term financial damage.
Arizona law treats insurance fraud as a crime, not merely a dispute over insurance money or insurance benefits. Prosecutors regularly pursue fraud cases involving auto insurance, life insurance, healthcare coverage, and federal insurance programs. If you are accused of insurance fraud or facing insurance fraud charges, understanding the penalties — and your legal options — is critical.
This article discusses the following:
- Insurance Fraud Under Arizona Law
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Arizona Statutes Governing Insurance Fraud (A.R.S. § 20-463 and Related Laws)
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Jail, Prison, and Probation Sentences for Insurance Fraud in Arizona
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Fines, Restitution, and Financial Penalties for Insurance Fraud Convictions
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Collateral Consequences of an Insurance Fraud Conviction in Arizona
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Common Insurance Fraud Allegations Investigated by Arizona Prosecutors
- Building Your Defense Against Insurance Fraud Charges
This article explains how Arizona’s statutes define insurance fraud, the penalties involved, and why working with an experienced insurance fraud defense attorney matters.
Insurance Fraud Under Arizona Law
Under Arizona’s criminal laws, insurance fraud occurs when a person knowingly makes false statements, submits false information, or falsifies material facts to deceive an insurance company to receive insurance benefits or payments they are not entitled to under an insurance policy.
Common types of insurance fraud include:
- Inflating the value of property damage
- Making a false insurance claim
- Submitting false claims for medical care
- Receiving unauthorized payments
- Staging an accident or staging accidents
- Arson connected to an insurance claim
Arizona’s courts are clear: insurance fraud is a serious offense, and even a single incident can result in a felony in Arizona.
Arizona Statutes Governing Insurance Fraud (A.R.S. § 20-466.01 and Related Laws)
Insurance fraud is primarily governed by A.R.S. § 20-466.01, part of the Arizona Revised Statutes. This statute makes it unlawful to knowingly present false or misleading information on an insurance application or claim.
Related statutes prosecutors may use include:
- Fraudulent schemes statutes involving fraud schemes
- Theft and financial crime provisions
- Healthcare fraud laws involving state and federal programs
Under the statute, a person may be charged for making a false statement, falsifying information, or unlawfully attempting to cause an insurance company to receive or pay funds based on deception.
Arizona’s legislature has made clear that insurance fraud is a crime involving deceit, and violations can result in both criminal and civil penalties.
Misdemeanor vs. Felony Insurance Fraud Charges
Insurance fraud charges may be filed as misdemeanors or felonies depending on the value of the insurance money involved and the nature of the offense.
Felony Insurance Fraud
Most insurance fraud cases are charged as a felony. In many situations, insurance fraud is a class 6 felony, though more serious cases may rise to a class 4 felony or even a class 2 felony when involving large losses, repeated conduct, or healthcare provider billing.
Examples of felony exposure include:
- Fraud involving large insurance claims
- Fraudulently receiving benefits over time
- Falsifying information in multiple claims
- Crime involving arson tied to insurance
A class 6 felony still carries the risk of imprisonment and long-term consequences.
Jail, Prison, and Probation Sentences for Insurance Fraud in Arizona
Insurance fraud convictions in Arizona can result in jail time, state prison sentences, probation, or a combination of all three, depending on how the offense is charged and the facts involved. These cases are sentenced under A.R.S. §§ 13-701, 13-702, and 13-703.
Judges consider:
- The amount of financial loss
- Whether the conduct was ongoing
- Prior criminal history
- Aggravating or mitigating factors
Probation may be available in some cases, but it is often strict and includes:
- Supervised reporting
- Employment verification
- Financial restrictions
- Mandatory restitution
Probation violations can result in incarceration, even if jail or prison was initially avoided.
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Fines, Restitution, and Financial Penalties for Insurance Fraud Convictions
Financial penalties are often the most burdensome consequence of an insurance fraud conviction.
Courts may impose:
- Criminal fines under A.R.S. § 13-801
- Mandatory restitution under A.R.S. § 13-603(C)
- Court costs and statutory assessments
Restitution may cover insurance payouts, investigative costs, and administrative expenses. If unpaid, restitution can:
- Be enforced as a civil judgment
- Result in wage garnishment
- Extend probation
For many defendants, restitution obligations last years beyond the conclusion of the criminal case.
Collateral Consequences of an Insurance Fraud Conviction in Arizona
Being convicted of insurance fraud carries consequences beyond jail or fines. A conviction may result in:
- Loss of professional licenses
- Difficulty obtaining employment
- Damage to reputation
- Severe legal and financial consequences
For licensed professionals and policyholders alike, being found guilty of insurance fraud can permanently alter career and personal opportunities.
Healthcare and AHCCCS Insurance Fraud Penalties in Arizona
Healthcare fraud cases are aggressively pursued by state and federal agencies because they involve public funds and patient trust. These investigations often begin with audits, billing reviews, or whistleblower reports and can escalate quickly into criminal cases. Even what a healthcare provider believes is a documentation or coding issue may be interpreted by investigators as intentional misconduct.
Allegations commonly focus on falsifying records, receiving unauthorized reimbursements, or billing for services not actually provided. Because healthcare billing systems are complex, prosecutors often rely on detailed claim data, expert testimony, and internal records to argue that the conduct was done knowingly rather than by mistake.
Healthcare fraud cases may involve:
- A healthcare provider accused of falsifying information or patient records
- Improper billing under AHCCCS, including duplicate, inflated, or unbundled claims
- Fraud involving federal insurance programs, which can trigger parallel state and federal investigations
These cases frequently result in felony charges, along with severe collateral consequences. In addition to criminal penalties, defendants may face exclusion from government healthcare programs, mandatory repayment of alleged overpayments, and disciplinary action by professional licensing boards. For many providers, the loss of licensure or program eligibility can be more damaging than the criminal sentence itself.
Common Insurance Fraud Allegations Investigated by Arizona Prosecutors
Arizona prosecutors regularly investigate insurance fraud allegations that suggest an individual or business intentionally misrepresented facts to obtain insurance money or benefits. These investigations often focus on whether the conduct was knowing, fraudulent, and part of a broader pattern rather than an isolated mistake. In many cases, prosecutors rely heavily on documents, recorded statements, and claim histories to establish intent.
Common allegations include:
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Inflating the value of damages on a property or vehicle claim
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Making a false insurance claim for losses that never occurred
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Staging an accident or engaging in repeated staging accidents schemes
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Submitting false information or altered records to receive benefits
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Arson connected to an insurance policy to trigger a payout
Many fraud cases do not begin with an arrest. Instead, they often start with insurance companies conducting internal audits or investigations through their Special Investigations Units (SIUs). If suspicious activity is identified, the insurer may refer the matter to law enforcement or the Arizona Department of Insurance. By the time prosecutors become involved, substantial documentation and evidence may already be assembled, which is why early legal guidance is critical once an investigation begins.
Building Your Defense Against Insurance Fraud Charges
If you are charged with insurance fraud, early legal guidance is critical. Insurance fraud investigations often begin quietly, and by the time formal charges are filed, prosecutors may already have months of documents, recorded statements, and financial records. Speaking with a skilled defense attorney or defense lawyer as soon as possible can help prevent missteps that may later be used against you.
An experienced attorney can assess whether the alleged conduct was truly fraudulent or whether it resulted from a misunderstanding, clerical error, or dispute over coverage. Insurance fraud cases frequently turn on intent, and proving that conduct was done knowingly is a key burden for prosecutors.
Building your defense may involve:
- Challenging whether the conduct actually meets the legal definition of fraud
- Demonstrating a lack of intent to deceive or unlawfully obtain benefits
- Reviewing how the insurance company conducted its investigation and whether proper procedures were followed
- Negotiating with prosecutors to reduce felony exposure, seek misdemeanor treatment, or resolve the case without incarceration
A criminal defense attorney or insurance fraud defense attorney understands how prosecutors build fraud cases, including how they use claim files, adjuster statements, and internal insurer records. With strategic defense planning and early intervention, it is often possible to limit penalties, protect professional licenses, and reduce long-term consequences.
Frequently Asked Questions About Resisting Arrest Charges
Is insurance fraud always a felony?
Often yes. Insurance fraud is a class offense and commonly charged as a class 6 felony.
Can I be prosecuted even if no payment was made?
Yes. Attempting to deceive an insurance company is enough.
What if the mistake was accidental?
Intent matters. An attorney can challenge whether actions were done knowingly.
Does auto insurance fraud carry the same penalties?
Yes. Auto insurance fraud can lead to felony charges.
Can insurance fraud affect immigration status?
Yes. It may have severe legal consequences for non-citizens.
Should I talk to an attorney before speaking to investigators?
Absolutely. Statements can be used to prosecute.
Is a free consultation available?
Yes. Many firms offer a free consultation today.
Important Things to Remember
- Insurance fraud is a crime under Arizona law
- Felony convictions carry lasting consequences
- Fraud cases often involve complex investigations
- Legal representation matters early
- A strong defense can reduce penalties
How Kolsrud Law Offices Can Help
Facing insurance fraud charges can feel overwhelming, especially when the potential consequences include felony convictions, significant fines, restitution, and long-term damage to your career and reputation. These cases often turn on intent, documentation, and how insurers and investigators interpret financial records, statements, and claims made months or even years earlier.
Josh Kolsrud brings valuable insight from years of experience handling complex criminal cases. He understands how insurance fraud investigations are built, how prosecutors evaluate evidence, and where weaknesses commonly exist in fraud allegations. That perspective matters when the state is attempting to prove that conduct was intentional rather than a mistake or misunderstanding.
Kolsrud Law Firm offers free one-on-one consultations and personalized defense strategies focused on protecting your rights and limiting long-term consequences. If you have been accused of insurance fraud, charged with insurance fraud, or believe an investigation may be underway, speaking with a defense attorney early can make a meaningful difference in how your case unfolds.
To discuss your situation, call (602) 691-4427 or visit our website to schedule a free consultation with Kolsrud Law Firm today.
An award-winning criminal defense attorney Since 2006
Why Choose Josh Kolsrud
With over 100 trials to his name, and years of experience as a state and federal prosecutor, Josh understands the law, the legal process, and your rights. Josh is also committed to representing every client with utmost integrity and dedication
Experience
Josh has prosecuted major crimes on the state and federal level, led a successful anti-human sex trafficking operation that saved lives, and argued before countless juries and justices for his clients
Expertise
Josh is an expert in both Arizona and federal criminal law, and is ready to put that expertise to work for you.
Dedication
As a prosecutor, Josh saw far too many defendants lose their livelihood due to poor representation. Josh will always give every client his complete attention and effort
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