NU Online News Service, June 29, 12:35 p.m. EDT
Four anti-fraud groups have written California Gov. Arnold Schwarzenegger, criticizing his budget proposal to downgrade most insurance crimes from felonies to misdemeanors.
The governor has advanced the idea as a method to save on prison costs.
But, the organizations warned in their letter that such a move would weaken anti-fraud efforts and expose consumers to being victimized by costly scams.
"Insurance fraud is a serious crime that demands serious consequences," the Coalition Against Insurance Fraud, National Insurance Crime Bureau, National Health Care Anti-Fraud Association and the International Association of Special Investigation Units said in their joint letter.
Gov. Schwarzenegger has proposed reclassifying 73 property and drug crimes as misdemeanors. Most insurance crimes are included, the groups noted.
Weaker penalties and the lower threat of prosecution could cause organized fraud rings such as health-fraud and staged-accident rings to move into California to try to involve residents in their schemes, the groups warned.
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