Convicted of Insurance Fraud – Must Make Restitution to Insurer Plus Attorneys Fees

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PUTTING GOODS IN STORAGE A STUPID WAY TO COMMIT INSURANCE FRAUD & RESULTED IN CONVICTION

After a jury convicted Patrick Elliot Lee (Lee) of eight counts of insurance fraud under Penal Code section 550, subdivisions (a)(1) and (b)(1), the trial court ordered him to pay restitution to the insurers he defrauded. In The People v. Patrick Elliot Lee, A158225, A159872, California Court of Appeals (June 24, 2022) the convicted insurance felon tried multiple arguments to avoid jail and restitution.

TRIAL AND VERDICT

The prosecutor showed Lee a November 12, 2014, e-mail in which Lee complained about his compensation to management at Air Methods. 

The jury found both Lee and his wife guilty as charged.

THE RESTITUTION ORDER

The trial court ordered Lee to pay restitution to pay Homesite $18,000 for the economic loss caused by Lee’s fraudulent theft claim, as well as $64,280.03 in attorney fees. 

DISCUSSION

The affidavit provided more than a substantial basis for concluding a fair probability existed that a search would uncover wrongdoing. The court concluded that it was entirely reasonable to infer from the facts Detective Herndon relayed that Lee moved his property into storage.

As part of the restitution order entered after Lee’s conviction, he was ordered to repay Homesite the $18,000 it had paid him to settle the fraudulent theft claim against Lee’s renter’s insurance policy. In addition, Lee was ordered to pay Homesite $64,280.03 in attorney fees.

By aiding the prosecution of Lee’s criminal case, Homesite’s attorneys helped to secure a conviction and in turn, a restitution order having the same effect as a civil judgment. By virtue of those efforts, Homesite’s attorneys put Homesite in a better position to collect the $18,000 it was already owed. For that reason, their fees were “reasonable . . . costs of collection” under section 1202.4, subdivision (f)(3)(H).

ZALMA OPINION

Insurance fraud is a serious felony in California and the statute allows the insurer defrauded to seek restitution from the criminal. In this case, failure to pay the ordered restitution can either void a probation or add to the sentence. Every insurer who, as the victim of a crime of insurance fraud, should demand restitution including restitution of the attorneys fees incurred to defeat the fraudulent claim.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE, is available at http://www.zalma.com and [email protected].

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