NU Online News Service, June 29, 12:35 p.m.EDT

Four anti-fraud groups have written California Gov. ArnoldSchwarzenegger, criticizing his budget proposal to downgrade mostinsurance crimes from felonies to misdemeanors.

The governor has advanced the idea as a method to save on prisoncosts.

But, the organizations warned in their letter that such a movewould weaken anti-fraud efforts and expose consumers to beingvictimized by costly scams.

"Insurance fraud is a serious crime that demands seriousconsequences," the Coalition Against Insurance Fraud, NationalInsurance Crime Bureau, National Health Care Anti-Fraud Associationand the International Association of Special Investigation Unitssaid in their joint letter.

Gov. Schwarzenegger has proposed reclassifying 73 property anddrug crimes as misdemeanors. Most insurance crimes are included,the groups noted.

Weaker penalties and the lower threat of prosecution could causeorganized fraud rings such as health-fraud and staged-accidentrings to move into California to try to involve residents in theirschemes, the groups warned.