A real estate career can be very lucrative, enabling you to access a steady source of income. However, you want to remain careful of your operations in real estate transactions to avoid facing real estate fraud charges. Notably, real estate fraud can occur in multiple forms, meaning that you may be answerable for an offense even when you did not anticipate it. Upon facing a fraud charge, you want to contact your criminal defense attorney for further guidance on handling the allegations.
You can worry less about your upcoming real estate fraud case at the Los Angeles Criminal Attorney. Our team is well-equipped to handle your case and deliver persuasive legal arguments to help you increase your chances of a favorable case outcome. Moreover, your assigned defense attorney will dedicate sufficient time to your case, improving the overall quality of work. Thanks to this, you can look forward to a solid case presentation.
The Nature of Real Estate Fraud
Committing real estate fraud may encompass multiple actions, so you want to learn the offense's general nature to establish the likelihood of facing charges. Obtaining helpful information ahead of trial helps you prepare for the possible approaches the prosecutor may take and improves your chances of securing a favorable outcome.
The primary element linked to all real estate fraud relates to the fraud element. Thus, the prosecutor must always ensure that whichever accusation they prepare against you shows your involvement in the fraud.
Usually, fraud encompasses using a false narrative, trickery, or pretenses to deceive an unsuspecting party into compliance. You may have played an active role in the fraud or relied on third-party information to help you actualize the real estate fraud.
Regardless of the real estate fraud you committed, investigation officers can find sufficient information to open a prosecution. Most real estate fraud cases involve deceiving a potential buyer before, during, or after closing a transaction to acquire real estate property.
Owing to the large sums of money involved in typical real estate deals, any accusations related to real estate fraud can attract misdemeanor or felony penalties if the judge finds you guilty. Consequently, you risk losing your job and liberty, depending on the length of the sentence.
Different Forms of Real Estate Fraud
In California, the law provides different theories and legal provisions to facilitate prosecuting a real estate fraud case. The rationale is that an aggrieved party may have suffered loss at various stages of the real estate transaction. Additionally, fraud may occur for varying transactions, including property purchase, rental, or lease agreements.
Based on the categorizations, you are likely to face any of the following forms of real estate fraud:
- Foreclosure Fraud
A foreclosure process occurs when a homeowner fails to repay their loan within the specified terms after using their home as security for the loan. Due to the non-compliance with repayment terms, their home faces foreclosure, meaning that ownership transfers to a board of trustees under court supervision.
Through the foreclosure process, you may have acted as a real estate professional to facilitate the transmission of ownership and faced fraud accusations. If so, you want to understand the nature of your charges to help you determine the best defenses to apply in the matter.
Foreclosure fraud may occur through:
Charging Higher Service Fees than Necessary
Whether you handle the foreclosure transaction under court supervision or as an independent real estate practitioner, you want to follow the appropriate charging rates for your services. If you present any amount higher than the standard figure, you will be answerable for real estate fraud.
You should note that you may face the charges even if you merely presented the charge rates, but the homeowner was yet to pay. The rationale is that you will have already formed the intention to defraud, making it unlawful to undertake any further engagements with the homeowner.
The prosecutor will collaborate with investigation officers to source evidence, like the falsified charge rates from documents. Moreover, they may call the complainant to testify about how you presented the additional charge fees, contrary to the real estate transactions code of conduct.
Tricking the Homeowner to Sign an Unlawful Contract
Additionally, you may face real estate fraud charges for tricking a homeowner facing foreclosure into an illegal contract. The events often arise when you take advantage of the homeowner’s desperation and try to guide them toward considering unlawful agreements to protect their home.
For example, you may explain that the contents of the contract allow the homeowner to retain their house, provided they pay you to negotiate with their debtors. His contents are unlawful because they violate legal provisions and endanger the privacy of the contract.
Subsequently, you can expect the prosecutor to provide specific evidence concerning the contents of the contract and the effect it would have on the foreclosure process. Further, the prosecution team should give specific details regarding the benefits you stood to gain at the homeowner’s expense to demonstrate further that you intended to commit fraud.
Sending the Homeowner a Service Fee Before Performing the Services
Fraud accusations may also arise if you request the homeowner's payment before completing the foreclosure process. Requesting prior transactions is unlawful because the homeowner provides consideration for the transaction before accessing the benefits they sought.
Despite this, the prosecutor must demonstrate the fraudulent element in your case by showing that the homeowner would suffer a loss under the arrangement. For example, if you received the payment and stopped offering real estate services, you will defraud the victim into spending their money without assistance.
Your case circumstances may also involve tricking the homeowner into paying more than necessary by introducing pre-service payment. Since the arrangement is unlawful, the prosecutor’s focus will be to show that your false representations were central to the non-completion of the foreclosure process.
Additionally, if the aggrieved party suffered additional harm from the fraudulent agreement to pay before receiving services from you, the prosecutor will highlight the situation as an aggravating factor. The change can be detrimental to your case, as it may move the presiding judge to issue harsher penalties.
Considering Purchasing the Property Before Official Foreclosure Begins
As a real estate professional about to handle a foreclosure transaction, your primary goal is to ensure that the property ownership smoothly transfers from the homeowner to court trustees. Thus, any attempt to register the property in your name or to push for direct purchase in the market for your benefit amounts to real estate fraud.
The primary reason is that homes under foreclosure are likely to hit the market at significantly lower prices than usual. These situations emerge because the court’s primary goal is to repay the homeowner’s debts, not necessarily for profit.
Hence, using the privileged information you have as a real estate professional in the transaction to purchase the house before it faces public auction prevents the debtors from recovering their money through the correct avenue.
Real estate fraud accusations of this nature will prompt the prosecutor to source evidence showing that you intended to amass significant discounts or profits at the homeowner’s expense. Multiple evidential sources are available, including witness statements and any documents you prepared in readiness to acquire the home before foreclosure began.
Accepting Power of Attorney From the Homeowner
Power of Attorney status allows you to make decisions related to property and transactions on behalf of the person who grants you the powers. Usually, the doctrine is useful for incapacitated persons or parties away from the country to have a trusted person help them maintain and run their property transactions.
Noteworthy, power of attorney status should only be available to trusted parties, as it allows the person to make decisions using their discretion. Thus, tricking a homeowner into granting you access to power of attorney may amount to real estate fraud, depending on case facts.
The prosecutor would take up your case if you abused power to purchase or sell the home under foreclosure for personal gains without consideration to the original homeowner. The investigation officers working on your case source relevant evidence demonstrating your abuse of power and submit it to the prosecutor for further action.
Entering Agreements With Third Parties About the Home Without Informing the Owner
Lastly, real estate fraud under the foreclosure category may occur when you enter agreements with third parties about servicing the home without informing the owner. For example, you may misrepresent to the homeowner that they need to renovate the house for the court trustees to accept it to extort money from them. You may also work with a third party to falsify the request's legitimacy.
Ultimately, you will have put the homeowner in a vulnerable position that causes monetary loss. Consequently, the prosecutor will institute real estate fraud charges and work on presenting evidence of the false representations you made.
Further, you may have agreed to sell the house to a third party without informing the homeowner of the pending transaction. As a result, they may have missed out on the chance to engage the debtors and complete their transactions. If so, the prosecutor must also present evidence of the specific engagements you undertook resulting in fraud.
Penalties for Foreclosure Fraud
If the presiding judge finds you guilty of foreclosure fraud, you may face misdemeanor or felony penalties. As a misdemeanor, you may receive a jail sentence of up to one year. Alternatively, you may receive a felony sentence of up to three years in jail.
- Theft Through False Pretenses
Real estate fraud may also occur through fraudulent theft. The Penal Code prohibits the use of misrepresentations or untrue promises to acquire property or money from a property transaction under section 487.
Elements of The Crime
The prosecutor must satisfy the legal burden of proof to show that you obtained property under pretenses by focusing on the following elements of the crime:
- You intentionally lied to a mortgage lending entity or a real estate owner.
- You use pretenses to deceive the unsuspecting parties
- The aggrieved party gave you money based on the fraudulent representations you made to them
Evidential sources should correspond to the case circumstances and point to your criminal liability. Thus, you can expect the prosecutor to develop the matter adequately in readiness for the trial and to persuade the judge to find you guilty.
Penalties for Committing Real Estate Theft by Fraud
Notably, committing theft by pretenses attracts felony and misdemeanor charges and penalties. Thus, if the judge finds you guilty of the offense, you may face a one-year sentence in jail under the misdemeanor penalty provisions. Alternatively, you may face a sentence of up to three years in jail under felony penalty provisions.
- Forgery of Documents
Additionally, real estate fraud may transpire through document forgery, contrary to the provisions of section 115 of the California Penal Code. When presenting your case, the prosecutor must prove that you were aware of your actions, meaning that you possessed criminal intent to defraud the involved transacting party.
Additionally, the prosecutor should demonstrate that you registered or recorded a document, meaning that you involved yourself directly in the illegal actions. To do this, they will source information from surveillance footage, witness statements, or documents for use as evidence.
Thirdly, the prosecutor should prove that the details in the document are false, meaning that forgery occurred. Proving this element is essential because it ties in with the fraudulent element necessary to prosecute successfully. You will have caused the aggrieved party to rely on false information to make a real estate transaction by forging details.
Finally, the prosecutor should prove that you committed forgery within a government office located in the state. The element helps frame the unlawful aspect of violating government principles towards protecting property and facilitating proper service delivery.
Penalties For Forging Documents
Forging real estate documents is a wobbler crime and may attract misdemeanor or felony charges. Thus, a misdemeanor penalty results in a jail sentence of up to one year. Alternatively, you may receive a felony sentence of up to three years in jail.
Defenses for Committing Real Estate Fraud
A defense hearing follows the prosecutor’s case, so your attorney will have the advantage of listening to the presentation and identifying any weaknesses in the prosecutor’s case. Thanks to this, your legal team can strengthen your defenses and raise your chances of receiving an acquittal order or a reduced sentence.
Notably, not all legal defenses will apply to each discussed type of real estate fraud. Your attorney will use discretion to help you establish the most suitable defenses for your matter. This way, they focus on covering a few defenses comprehensively rather than relying on multiple unfounded counterarguments.
Some defenses to the following:
You Did Not Intend to Defraud the Aggrieved Party
The element of criminal intent is central to any fraud charges, as they link you to the alleged offense. Thus, contesting having any intention to defraud attacks the prosecutor’s main argument. By relying on this defense, you point out the possible gaps in the prosecutor’s case and cast reasonable doubt on their presentation.
Since the defense is a core element for the judge to consider before convicting you, you should have sufficient evidentiary sources to support it. You can also explore several approaches to present the defense that suits your case circumstances.
For example, if you were a junior agent acting on behalf of your supervising real estate agent, you may not have foreseen fraud elements. Thus, you are not likely to have a direct link to the criminal operations of defrauding innocent real estate buyers. The point is to frame an argument that demonstrates the unlikelihood of your criminal intent based on your case circumstances.
Examples of evidential sources to rely on include your employment contract, which limits your access to client information and prevents you from knowing whether a real estate transaction is legitimate. Additionally, you can call on witnesses who can testify in your favor and ascertain that you were not privy to any agreements to defraud clients.
The Real Estate Transaction You Undertook Included a Genuine Mistake
Moreover, you can rely on the mistake defense to help you avoid facing real estate fraud penalties. The defense focuses on showing that while the aggrieved party suffered a loss, it resulted from a genuine mistake.
For example, a client may make an overpayment based on a typing error when preparing a lease transfer agreement. Subsequently, they may raise the alarm on attempted real estate fraud, attracting the investigation officers’ attention and your consequent arrest.
Based on the fast progression of events, your only chance to raise your defense of a mistake may be in court. Thus, you want to ensure that you back the defense with sufficient evidence to help build your credibility in court.
You will mostly rely on circumstantial evidence to prove that you had not contemplated committing fraud and that the events led to what appeared to be a one-time occurrence.
Although the defense may be successful in a criminal case, you should note that you may still be liable under civil law for negligence. Hence, you will only face complete absolving of the offense if the aggrieved party does not file a civil suit.
You Acted Under Undue Pressure
Instances of coercion and undue pressure can push you to act out of character, mainly because you fear for your safety if you do not comply with the perpetrator’s orders. Thus, the first step in presenting this defense in court is identifying the perpetrator to provide context for your actions.
Examples of perpetrators may include your employer, a third party, or a person interested in purchasing real estate property before the legitimate buyer closes the deal. Upon naming them, you also want to show their fundamental interest in the real estate transaction and how it led to the issuance of threats or undue influence on you to act on their behalf.
You should note that the standard used to determine whether your actions were valid is that of a reasonable man. Specifically, you should satisfy the court that the pressure you faced was enough to cause any good person to fear for their safety or career advancement. Please note that the court is less likely to consider the defense if the threats you received targeted third parties, not you directly. Therefore, your reason for acting fraudulently under duress must be compelling.
The Aggrieved Client Misconstrued Unforeseen Outcomes for Fraud
Sometimes, a transacting client may resort to blaming when a deal ends differently than anticipated. Consequently, they may accuse you of committing real estate fraud even when you followed all the necessary procedures for completing a transaction or creating a lease agreement.
If so, you can counter the accusations by providing evidence of having followed the required procedures to achieve the necessary outcome. For example, you can present the code of conduct and the guiding principles you should follow as a real estate agent and compare them to what you did throughout the transaction.
Additionally, you can provide evidence of the possible reasons that you failed to reach the expected outcome to show that you did not undertake any fraud. Notably, these reasons may have been unforeseeable, meaning that you did not anticipate the events.
Presenting the various evidential sources helps persuade the court of your exact position to show that you did not contemplate committing fraud. Thus, you can use this defense to obtain complete acquittal if all the evidence you rely on is legitimate.
Contact a Criminal Defense Attorney Near Me
A real estate fraud charge can create significant problems for you or your loved ones, especially when linked to a criminal offense. You may risk losing your practicing license, and your professional reputation may suffer. You can avoid difficult circumstances by contacting a criminal defense attorney upon facing real estate fraud charges.
At Los Angeles Criminal Attorney, we work hard to provide excellent criminal defense services geared toward helping you achieve the best possible case outcome. Our role is to conduct in-depth legal research and prepare defenses on your behalf to help you overcome the accusations that a prosecutor raises. Thanks to our rich experience in criminal law practice, you can count on us to handle your real estate fraud case. For more information on how to prepare proper defenses, call us today at 424-333-0943.