Nevada “Fraud” Laws – A Defense Lawyer Explains

Nevada law makes fraud a criminal offense when people deliberately misrepresent themselves in order to receive benefits to which they are not legally entitled, such as money, insurance proceeds, housing or public services. Most fraud crimes are prosecuted as felonies and can carry time in local jails or Nevada State Prison.

As discussed below, there are several different types of fraud offenses depending on the transactions involved.

Penalties

The majority of Nevada fraud crimes are prosecuted as felonies, carrying:

• time in Nevada State Prison,
• fines (at the judge’s discretion),
• restitution payments (if applicable), and
• investigation reimbursement costs (if applicable)¹

Though it may be possible to plea bargain the charges down to lesser offenses or a full dismissal.

Defenses

The most common ways to fight Nevada fraud charges is to argue either:

• the defendant had no intent to defraud,
• the defendant was falsely accused, and/or
• the evidence should be excluded because the police found it through an unlawful search and seizure or asset forfeiture

The case should be dismissed if the defense attorney can raise a reasonable doubt about the defendant’s guilt.

In this article, our Las Vegas criminal defense attorneys summarize the following types of Nevada fraud crimes:

• 1. Auto Insurance Fraud
• 2. Bank Fraud (Federal)
• 3. Credit Card Fraud
• 4. Foreclosure Fraud
• 5. Gaming Fraud
• 6. Health Care Fraud
• 7. Mail Fraud (Federal)
• 8. Mortgage Fraud
• 9. Obtaining Money by False Pretenses
• 10. Securities Fraud (State and Federal)
• 11. Unemployment Insurance Fraud
• 12. Welfare Fraud
• 13. Wire Fraud (Federal)
• 14. Workers Compensation Fraud
• 15. Defrauding an Innkeeper
• Additional Resources

1. Auto Insurance Fraud

Car insurance fraud is the act of intentionally deceiving an insurance company to obtain money that the insurance company is not legally obligated to give. Examples include:

• Intentionally inflating the cost to repair a damaged vehicle;
• Intentionally abandoning a car and claiming that someone stole it (this is referred to as “owner give-ups”);
• Intentionally vandalizing a car and claiming that it was caused by an accident;
• Intentionally making a false claim in a vehicle insurance application; and
• Falsely stating that an automobile collision caused physical injuries

Note that a person need not own a vehicle in order to get prosecuted for defrauding a car insurance company. For example, a physician who willingly makes a false medical report about an injured driver to an insurance company could also face prosecution for this offense.

Deceiving a car insurance company is a category D felony in Nevada, carrying:

• One to four (1 – 4) years in prison,
• Up to $5,000 in fines (at the judge’s discretion), and
• Restitution

Also note that auto insurance fraud cases are usually prosecuted by the Nevada Attorney General instead of the local district attorney.

Learn more in our article on auto insurance fraud.²

2. Bank Fraud (Federal Fraud)

As it sounds, bank fraud occurs when people knowingly execute a “scheme or artifice” to either:

1. Defraud a financial institution, or
2. Obtain money or property under the custody of a financial institution by false pretenses.

An 18 U.S.C. § 1344 violation can occur without the perpetrator ever walking into a bank. This differs from bank robbery, which requires a physical taking and carrying away.

Penalties include:

• Up to 30 years in Federal Prison, and/or
• Up to $1,000,000 in fines, and
• Restitution

Learn more in our article on bank fraud.³

3. Credit Card Fraud

Many different actions qualify as credit card fraud in Nevada. Examples include:

• Using other people’s credit cards without their permission;
• Using a revoked or expired credit card;
• Lying on a credit card application; and
• Using a fake credit card

A 205.760 violation is a category D felony, carrying:

• One to four (1 – 4) years in prison,
• Up to $5,000 in fines (at the judge’s discretion), and
• Restitution

Learn more in our article on credit card fraud.⁴

4. Foreclosure Fraud

Foreclosure consultants may be prosecuted for deception if they do not abide by the terms of their contracts with homeowners. Examples of fraudulent behaviors in Nevada include:

• Consultants receiving compensation outside the terms of their contracts with a homeowner; and
• Consultants taking a homeowner’s power of attorney for reasons other than to review documents as provided by law; and
• Consultants misrepresenting the services provided by the foreclosure consultant(s)

A single NRS 645F.400 violation is a category C felony, carrying:

• One to ten (1 – 10) years in prison, and/or
• Up to $10,000 in fines, and
• Restitution

Meanwhile, “a pattern” of foreclosure fraud is prosecuted as a category B felony, carrying:

• Three to twenty (3 – 20) years in prison, and/or
• Up to $50,000 in fines, and
• Restitution

Learn more in our article on foreclosure deception.⁵

5. Gaming Fraud

It is illegal to use information not known to the general public when gambling in Nevada. This offense is similar to insider trading but with casinos instead of the stock market. Examples include:

• A casino employee telling a patron that a particular blackjack table has a hot deck;
• A casino host indicating to a patron that a particular slot machine is “loose”; and
• A dealer fixing a game in order to ensure a predetermined outcome

An NRS 465.070 violation is a category B felony in Nevada, carrying:

• One to six (1 – 6) years in prison, and/or
• Up to $5,000 in fines, and
• Restitution

Learn more in our article on gaming fraud.⁶

6. Healthcare Fraud

Police may arrest a doctor or other medical professional for lying to health insurance companies about how much money they are entitled to. Examples of healthcare fraud in Nevada are:

• Double-billing;
• Falsifying patient records;
• Charging for procedures that were not necessary or never performed;
• Upcoding or unbundling of services or items; and
• Accepting kickbacks

An NRS 422.369 violation is a category D felony, carrying:

• One to four (1 – 4) years in prison,
• Up to $5,000 in fines (at the judge’s discretion), and
• Restitution

Note that these cases are usually prosecuted by the Nevada Attorney General instead of the local district attorney.

Learn more in our article on healthcare fraud.⁷

7. Mail Fraud (Federal)

The federal crime of mail fraud has four elements:

1. There was a “fraudulent scheme” intended to divest another person or institution out of money, property, or “honest services” (including ethical behavior or trade secrets);
2. The defendant had an intention to defraud;
3. The fraud involved material misrepresentations of truth; and
4. The defendant employed the mail to conduct the fraud.

Mail fraud is usually prosecuted alongside other offense(s) related to the underlying fraudulent scheme, such as bank or securities fraud.

Penalties for an 18 U.S.C. § 1341 violation include:

• Up to twenty (20) years in federal prison, and/or
• A fine, and
• Restitution

However if the scheme involves federal disaster relief or defrauding a bank or other financial institution, the sentence is:

• Up to thirty (30) years in federal prison, and/or
• Up to one million dollars ($1,000,000) in fines, and
• Restitution

Learn more in our article on mail fraud.⁸

8. Mortgage Fraud

It is illegal to deliberately make a false statement or conceal a material fact when conducting a mortgage lending transaction. Examples of mortgage fraud in Nevada include:

• False loan modification schemes, where the company takes large fees upfront but then fails to deliver on their promised services;
• False loan applications, where prospective home buyers put false information on their mortgage applications; and
• False appraisals, where home sellers bribe appraisers to exaggerate the home’s value

An NRS 205.372 violation is a category C felony, carrying:

• One to ten (1 – 10) years in prison, and/or
• Up to $10,000 in fines, and
• Restitution

Though “a pattern” of deceptive mortgage practices is charged as a category B felony, carrying:

• Three to twenty (3 – 20) years in prison, and/or
• Up to $50,000 in fines, and
• Restitution

Learn more in our article on mortgage fraud.⁹

9. Obtaining Money by False Pretenses

Nevada outlaws monetary transactions where one party profits from a material misrepresentation made to the other. Typical scenarios include:

• Getting a paycheck for a job that the recipient did not do;
• Selling goods that the seller does not deliver to the buyer upon payment; and
• A landlord locking out a tenant after taking his/her rent money

Penalties for an NRS 205.380 violation depend on the amount of money involved. Falsely obtaining less than $1,200 is a misdemeanor, carrying

• Up to six (6) months in jail, and/or
• Up to $1,000, and
• Restitution

If the money amounted to $1,200 or more, then it is a felony.

Learn more in our article on obtaining money by false pretenses.¹⁰

10. Securities Fraud (State and Federal)

Any fraudulent act involving the stock market and investments is highly illegal in Nevada. Examples include:

• Insider trading;
• Unauthorized trades;
• Churning (a broker buying or selling securities to get an extra commission); and
• Unsuitability (investing clients’ funds in risky ventures without informing them of the risk)

Securities fraud is a category B felony in Nevada, carrying:

• One to twenty (1 – 20) years in prison, and/or
• $500,000, and
• Restitution

Note that securities fraud is also a federal offense. Common scenarios include violating the:

• Sarbanes Oxley Act of 2002; and
• Foreign Corrupt Practices Act

A 15 U.S.C. § 78 violation carries:

• Up to twenty (20) years in federal prison, and/or
• $5,000,000 dollars in fines, and
• Restitution

Learn more in our articles on securities fraud (NRS 90.650)¹¹ and securities fraud (federal).¹²

11. Unemployment Insurance

Both employers and former employees are possible defendants in fraudulent unemployment insurance cases. Common scenarios in Nevada include:

• An applicant collecting unemployment despite working another job;
• An applicant cashing another person’s unemployment check;
• An employer giving a false reason about why an employee was fired in order to avoid paying;
• An employer withholding employee deductions and intentionally not paying them to the state

An NRS 612.445 violation involving less than $1,200 is a misdemeanor, carrying

• Up to six (6) months in jail, and/or
• Up to $1,000, and
• Restitution

Otherwise, an NRS 612.445 violation is a felony. It carries prison, fines, restitution, and a penalty equal to 15% of the benefits received.

Note that these cases are usually prosecuted by the Nevada Attorney General instead of the local district attorney.

Learn more in our article on unemployment insurance fraud (NRS 612.445).¹³

12. Welfare Fraud

It is unlawful in Nevada for welfare applicants to deceive social services into giving them more assistance than they are entitled to otherwise. Examples of this offense include:

• The defendant using a fake ID in order to receive benefits;
• The defendant intentionally not reporting their assets in order to increase benefit payments; and
• The defendant taking benefits from more than one state

An NRS 422A.700 violation is typically prosecuted as a category D felony, carrying:

• One to four (1 – 4) years in prison,
• Up to $5,000 in fines (at the judge’s discretion), and
• Restitution

Learn more in our article on welfare fraud.¹⁴

13. Wire Fraud (Federal)

The federal crime of wire fraud has five elements:

1. The defendant executed a “fraudulent scheme” that resulted in losses to another person or a business;
2. The defendant had intent to defraud;
3. The defendant’s lies were material to the scheme;
4. The defendant used wire communications such as the telephone or email to advance the scheme; and
5. The wire communication crossed state lines

Wire fraud is usually prosecuted alongside other offense(s) related to the underlying fraudulent scheme, such as bank or securities fraud.

Penalties for an 18 U.S.C. § 1343 violation include:

• Up to twenty (20) years in federal prison, and/or
• A fine, and
• Restitution

However if the scheme involves federal disaster relief or defrauding a bank or other financial institution, the sentence is:

• Up to thirty (30) years in federal prison, and/or
• Up to one million dollars ($1,000,000) in fines, and
• Restitution

Learn more in our article on wire fraud.¹⁵

14. Workers’ Compensation Fraud

People commit workers’ compensation insurance fraud by lying to obtain insurance benefits. Possible defendants include:

• Employees (“applicants”), who are trying to get money they are not entitled to;
• Employers, who are trying to pay fewer workers’ comp premiums;
• Carriers, which are attempting to avoid paying out benefits;
• Claims mills, where “rings” of people recruit people to file fake workers’ comp claims so the ring members can divvy up the benefits; and
• Providers, who over-bill or provide unnecessary treatment to get more money.

Workers’ compensation fraud is typically prosecuted as a category D felony in Nevada, carrying:

• One to four (1 – 4) years in prison,
• Up to $5,000 in fines (at the judge’s discretion), and
• Restitution

Learn more in our article on workers’ compensation fraud.¹⁶

15. Defrauding an Innkeeper

Defrauding an innkeeper is intentionally obtaining money, goods, credit, services, or lodgings from an establishment without paying.

Defrauding an innkeeper out of less than $1,200 is a misdemeanor in Nevada, carrying:

• Up to six (6) months in jail and/or up to $1,000 in fines, and
• Restitution

For amounts of $1,200 or higher, defrauding an innkeeper is a category D felony carrying:

• One to four (1 – 4) years in prison,
• Up to $5,000 in fines (at the judge’s discretion), and
• Restitution

Learn more in our article on defrauding an innkeeper.¹⁷

Additional Resources

For more information, refer to the following as selected by our Las Vegas criminal defense lawyers:

• Fraud Crimes – Summary provided by the Las Vegas Metropolitan Police Department.
• Fraud Unit, Nevada Attorney General’s Office – Contains the Mortgage Fraud Unit, Insurance Fraud Unit, Securities Fraud Unit and Workers Compensation Fraud Unit.
• Bureau of Consumer Protection – Tips about avoiding scams, provided by the Nevada Attorney General.
• DETR Unemployment Insurance Fraud Reporting Form – Online form provided by the Nevada Department of Employment, Training, and Rehabilitation.
• Voter Fraud – Overview by the Nevada Secretary of State.

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Legal References