Real estate fraud in California can be defined as any criminal conduct that is related to real estate, but the most common types of real estate fraud include antitrust fraud, mortgage fraud, elder financial fraud and foreclosure rescue scams.
Antitrust real estate fraud in California involves crimes committed by people who collude together to prevent fair competition in the real estate industry. For example, if you go to an auction to purchase a foreclosed home, in theory you are supposed to be bidding against other independent buyers. However, there are some auction sales, where buyers and the auctioneers all work together to make sure that when one of their buyers is interested in a home, nobody else is allowed to bid for it. This type of conduct is illegal and is considered a violation of the Sherman Antitrust Act, which prohibits unfair competition in the United States. Many California real estate developers have been targeted by the FBI and the Antitrust Division of the US Attorney’s Office for this type of real estate fraud.
Mortgage fraud schemes in California usually involve some form of material misrepresentation or omission relating to a property or mortgage that an underwriter or lender relies upon in funding or insuring the loan. The FBI classifies mortgage fraud into two separate areas – fraud for profit and fraud for housing. The latter, fraud for housing, aka loan fraud, involves borrowers misstating their incomes in order to qualify for homes they normally could not afford. However, prosecutors usually focus on fraud for profit, which is usually committed by real estate professionals. Common mortgage fraud schemes for profit include equity skimming, property flipping and mortgage-related identity theft. Equity skimming involves threats of bankruptcy/foreclosure by fake companies to dupe homeowners and investors. Property flipping involves purchasing properties and then artificially inflating their values through fake appraisals. The properties are often sold multiple times using multiple fraudulent appraisals before being foreclosed upon by victim lenders.
Elder financial fraud in California covers any financial crimes committed against elderly people. Many crimes committed against the elderly involve scams that target their homes. Prosecutors take these crimes seriously because the victims are easier to take advantage of.
Foreclosure rescue scams in California involve targeting homeowners who are facing foreclosure, and fraudulently promising foreclosure prevention in exchange for money or interest in the property. However, nothing is actually being done to prevent the foreclosure and the situation just becomes worse for the homeowner. Loan-modification scams rely on the same type of fraudulent behavior.
California real estate fraud is a popular target for prosecutors in both state court and federal court. Every real estate fraud case has the potential to be extremely complex because these cases (1) usually large sums of money, (2) there is a large paper trail of evidence and (3) there are lots of defendants and/or victims. Furthermore, because of the financial factors and the nature of the victims, prosecutors will often seek high sentences involving large amounts of jail time. For actual examples of cases involving real estate fraud, please see our blog.
In addition to severe criminal penalties, real estate fraud can also have drastic employment, licensing and immigration consequences. Fraud crimes are considered crimes of moral turpitude, which are crimes that relate to a person’s honesty. Having a fraud conviction can prevent a person from finding a job or lead to a person being fired from their current job. Furthermore, many professions that require licensing from a state board, such as lawyers and real estate agents, equire background checks. A professional who has a fraud conviction on their record risks losing their professional license, or never acquiring it in the first place. Perhaps the most severe impact of a fraud conviction involves immigration consequences. Non-citizens who are permanent residents, with a green card, or temporary visitors, with a visa, can be denied admission or naturalization or even deported, with a fraud conviction on their record.
If you have been accused of real estate fraud, your choice of criminal defense attorney is the most important decision you can make. You need to choose a criminal defense attorney that can handle complex cases, negotiate effectively and if necessary, fight aggressively. As a member of MENSA, Fred Thiagarajah’s IQ is in the top 2% of the country. As a former Deputy District Attorney, Fred Thiagarajah has the negotiating skills and trial experience necessary to get the best results for his clients, for criminal cases and immigration consequences. Fred Thiagarajah has helped clients with fraud charges in the past. For an example of his work, please see his case results and read his client testimonials. With offices in Newport Beach, Beverly Hills and Riverside, Fred Thiagarajah has criminal defense experience in Orange, Los Angeles and Riverside Counties.
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