In State of New Jersey v. Fleischman, 2007 WL 789930, decided March 19, 2007, the State indicted defendant Randi Fleischman for second-degree insurance fraud.
On December 12, 2003, Fleischman filed an Automobile Theft Affidavit with Liberty Mutual in which she swore that her automobile had been stolen, that she did not know the thief's identity, and that she had no information about the car's whereabouts. Fleischman's affidavit also stated that she did not own any other automobile and that her car had not been for sale. Fleischman subsequently admitted that her car had not been stolen and withdrew her insurance claim.
A Middlesex County Grand Jury indicted the defendant, charging her with second-degree insurance fraud; third-degree attempted theft by deception; third-degree tampering with public records; and fourth-degree false swearing. Fleischman moved to dismiss her indictment in its entirety and, alternatively, to dismiss the second-degree insurance fraud count (count one). The court dismissed count one, leaving intact the remaining charges. The Appellate Division affirmed count one's dismissal, holding that “[e]ach lie told in support of one fraudulent claim in a single document cannot reasonably be seen as a separate act of insurance fraud, but rather only as a component of the one fraudulent claim.“
In its appeal to the New Jersey Supreme Court, the state asserted that the legislature clearly made the unit of prosecution a fraudulent statement and not the fraudulent claim by declaring that “[m]ultiple acts of insurance fraud which are contained in a single record … shall each constitute an additional, separate and distinct offense for purposes of this subsection.“ [NJSA 2C:21-4.6(b)]
The court noted that the state had earlier presented to the grand jury evidence of nine specific fraudulent “statements“, constituting nine acts of insurance fraud by defendant. In discussing this, the court found that since the term “statement“ does not have a universal meaning, it permits the parties to advance their competing interpretations. Dictionaries define statement both as a report or narrative and as a single declaration or remark. In the context of perjury, which is a false statement under oath, the Commentary to the Code takes the position that statement should mean each “item of information communicated in one sequence of declarations.“ However, the court found that no definition of statement answers the question posed by this appeal.
The court decided that the state's arguments did not address the fact that the legislature created two distinct offenses: third-degree insurance fraud and second-degree insurance fraud and that the legislative findings and declarations simply do not compel the interpretation urged by the state. Therefore, the court turned to the established principle of statutory interpretation that the legislature is presumed to act with knowledge of the judicial construction given to predecessor or related enactments.
Although civil in nature, IFPA [New Jersey Insurance Fraud Prevention Act, N.J.S.A. 17:33A-1 to -14.] punished the submission of a false or misleading statement through language essentially identical to that which now appears in the criminal statute. Under that statute, each knowing and material false statement enhances a fraudulent claim, making the danger of payment more likely “provided that the false statement is material and significantly enhances the credibility of or evidentiary support for the claim.“
The court found that it would be unreasonable to increase the penalty for each instance that the same misrepresentation appears in a single document or for false assertions that substantively repeat information contained in other misrepresentations in the same document. The court rejected the argument that more than five acts of insurance fraud were perpetrated by defendant when she made three statements in support of her fraudulent insurance claim. “We hold that when a defendant provides to officials in connection with a fraudulent claim a document or oral narrative that contains a material fact or facts relating to the claim, each such document or narration is a 'statement' equating to an 'act' of insurance fraud. We reject the assertion that the legislature intended every discrete fact within a narrative assertion about a single claim would amount to an 'act' of insurance fraud. Because defendant's oral and written statements related to a single claim of a stolen automobile, we conclude that the state presented three 'acts' of insurance fraud to the grand jury: defendant's report to the police, defendant's oral report of the alleged theft to Liberty Mutual, and defendant's affidavit submitted to Liberty Mutual in support of her claim. The judgment of the Appellate Division is affirmed for the reasons expressed in this opinion.“