What is Real Estate Fraud?

real estate fraud
Real estate fraud is fraud committed in connection with a real estate transaction. Sometimes real estate fraud can be charged as grand theft if:

  • You knowingly and intentionally cheated a real estate owner or mortgage lender by making a false or fraudulent representation.
  • You did this with the intent to take possession and ownership of the property or loan proceeds.
  • The victim let you take possession of the property or loan proceeds because he or she believed your false representations.

In order for real estate fraud to be grand theft, the amount has to surpass $950, which is very easy to do with real estate.
There are other types of real estate fraud that aren’t under California’s grand theft law.

Foreclosure Fraud
Foreclosure fraud is committed by foreclosure consultants or other professionals who help homeowners that are facing foreclosure. You can be guilty of foreclosure fraud if you:

  • Collect compensation for a service promised to a homeowner before the service is completed.
  • Charge or collect excessive fees.
  • Take a lien on the property, require any other type of security as collateral for payment, or show an interest in buying the property.
  • Take money or property from a third party in connection with the agreed-upon services for the homeowner without fully disclosing that information to the homeowner.
  • Take a power of attorney from the homeowner. A power of attorney is a written authorization to represent or act on another’s behalf in private affairs, business, or some other legal matter.
  • Persuade or attempt to persuade the homeowner into signing an illegal contract – one that doesn’t comply with all statutory rules and regulations.

Rent Skimming
Rent skimming is a form of real estate fraud that is committed when:

  • You fail to apply the rent proceeds to the mortgage during the first year of acquiring a rental property.
  • You pretend to own a property that you don’t actually own and take the rent proceeds for yourself.

Forged Deeds or Documents
This occurs when you forge a real estate deed in public records. If charged with this you can also face charges under California’s forgery law.

Penalties for Real Estate Fraud

The penalties for real estate fraud depend on what statute it is charged under. Whether you are charged with real estate fraud as grand theft, foreclosure fraud, or rent skimming, you face the same potential penalties. These penalties depend on the facts of the case and the defendant’s criminal history and can be charged as either a misdemeanor or a felony. If convicted as a misdemeanor the penalties include:

  • Misdemeanor summary probation,
  • Up to one year in a county jail, and/or
  • A fine up to $1,000.

As a felony, the penalties include:

  • Felony formal probation,
  • Sixteen months or two or three years in jail, and/or
  • A fine up to $10,000.

The penalties for forged deeds or documents are more severe. It is always prosecuted as a felony and the penalties include:

  • Felony formal probation,
  • Sixteen months or two or three years in jail, and/or
  • A fine up to $10,000.

Additional Penalties

There are additional penalties for this crime based on how much was deprived of the victim.

  • If more than $65,000 was deprived of the victim, then you could face an additional year.
  • If more than $200,000 was deprived of the victim, then you could face an additional two years.
  • If more than $1,300,000 was deprived of the victim, then you could face an additional three years.
  • If more than $3,200,000 was deprived of the victim, then you could face an additional four years.

In addition, if you are convicted of two or more related acts of real estate fraud with both of them being felonies, and the victim was deprived of more than $100,000, you can face another one to five years in prison on top of the additional penalties. You could also face a much higher fine.
Also, if you hold a California real estate broker’s license, being convicted of real estate fraud could lead to real estate broker discipline and possibly losing your license.

Legal Defenses for Real Estate Fraud

If you have been charged with real estate fraud, an experienced criminal defense lawyer can help you fight the charges. Here are some of the most common legal defenses for real estate fraud.

There was no fraudulent intent.

This is the most basic element of this crime and if you didn’t have the intent to commit fraud then you can’t be charged with it.

You entered into a transaction with the consent of a property owner.

When dealing with someone else’s property, it’s common to be accused of real estate fraud. It’s most common that the property owner is an elderly person so elder abuse charges often accompany the real estate charges. It’s also common for the elderly person to give consent to represent him or her in a transaction but they forgot or got confused.

You were falsely accused.

False accusations are common by people who are trying to cover their own skin. In other words, someone else is guilty of this crime but pins it on you. It’s also possible to have your identity stolen, making this a case of mistaken identity.

Fresno Real Estate Fraud Lawyer

If you have been charged with real estate fraud, an experienced criminal defense lawyer can help you fight the charges. Even if the evidence is against you, a skilled real estate fraud attorney can attempt to negotiate a plea bargain, possibly reducing your sentence from a felony to a misdemeanor.

Any questions? Contact us.