Real Estate Fraud Defense Attorney
Real estate fraud occurs when the government alleges that the seller of real estate perpetuated a fraud upon the buyer or vice versa. This fraud can take many forms – from the seller artificially inflating the value of property to the buyer lying or omitting important information on real estate financing documents. Mortgage fraud is generally the most prosecuted form of real estate fraud (link to mortgage fraud page?). Like mortgage fraud, the general allegation of real estate fraud does not have its own federal statue associated with it. If prosecuted at the federal level, real estate fraud is often prosecuted under the federal wire fraud statute. Real estate fraud cases can be prosecuted at the state level as well, but usually when a financial institution is involved in the real estate transaction, federal jurisdiction takes precedence. If charged at the federal level for real estate fraud, penalties can be severe. A conviction under the wire fraud statute can be up to 20 years in prison and a potential fine of up to $1 million.
In order to prove real estate fraud, the government must prove that the individual (whether seller or buyer) intentionally defrauded another individual or entity. Real estate transactions are often complex with many legal and financial nuances. It is not enough that a buyer or seller mistakenly misrepresented something during a real estate transaction. A misrepresentation must be intentional and be proved as such for a conviction to stand. Often, the heart of defending against real estate fraud charges goes to this element of intent.
Common Schemes Involving Real Estate Fraud
- Fraudulent settlement statements: If a buyer and a seller concerning a certain property collude to artificially inflate the value of the property at issue and present this inflated value to a financial institution to secure a higher loan for the property, this is fraud. Often in these scenarios, the buyer and seller of the property split the proceeds left over from the loan after the property is paid for.
- Mortgage fraud: If you are applying for a mortgage from a financial institution and you purposely misstate relevant information on your mortgage application to either qualify for a mortgage or obtain better financing terms, this is fraud.
- Property foreclosure fraud: If you try and take advantage of an individual or entity facing foreclosure by offering them a false loan to secure the property, this is fraud.
Recent Cases the Department of Justice has Prosecuted Real Estate Fraud
- A man in California was convicted by a federal jury for his role in a real estate fraud scam. According to evidence presented at trial, the man was a real estate broker and stole the identities of his clients. The man then used these stolen identities to obtain real estate properties under his client’s names. The man then sold the properties at a profit and kept the proceeds for himself. In total, the man made over $3 million from his scheme and faces up to 20 years in prison.
- A man in Florida pleaded guilty to multiple federal charges stemming from his involvement in a real estate fraud scheme. According to plea documents, the man created falsified pay stubs and employment records and used these records to secure favorable mortgages on several properties. After obtaining the favorable mortgages, the man turned around and sold the properties for a profit. In total, the man pleaded guilty to obtaining over $1 million in illegal proceeds from the sales.
- A woman in Texas was federally indicted for her alleged role in a real estate conspiracy scheme. According to the indictment, the woman was part of a “straw buyer” ring where individuals would act as straw buyers for properties in order to get mortgages approved on these properties. Every time a property obtained a successful mortgage backed by a financial institution, the woman would be paid a sum of money. The leader of this scheme would then sell the properties at inflated costs to cover the balance of the mortgage and then keep the proceeds for himself. If convicted, the woman faces up to 20 years in prison.
Speak with an Oberheiden P.C. Real Estate Fraud Defense Lawyer
For more information about the clients we serve or the services we offer, please contact Oberheiden P.C. to arrange a free and confidential initial consultation. To schedule a time to speak with one of our federal real estate fraud defense attorneys, call 888-680-1745 or contact us online today.