A phantom sale is a type of real estate fraud that can result in federal penalties, as well as prosecution under the laws of New York. Phantom sales have become common because there are so many abandoned properties, but involvement with any conspiracy related to a phantom sale can have very serious penalties including the potential for decades of incarceration.
Banks and financial institutions have tremendous clout with lawmakers and prosecutors, and you can expect to face aggressive prosecution for participation in any scheme that involves fraud against lenders.
If you have been accused of involvement with a phantom sale, contact Bukh Law Firm for help defending yourself against charges or negotiating a plea agreement that could reduce the life-changing penalties you face.
What is a Phantom Sale?
A phantom sale occurs when a property is sold by someone who does not have any legal authority or justification to sell the home. Typically, the process of a phantom sale scam begins by identifying a property that has been abandoned or that is not currently being lived in or actively managed. After a property has been identified, a false deed is filed, transferring that property to a co-conspirator who is involved in the fraud scheme.
The home may be sold by the co-conspirator, and the proceeds of the sale pocketed. The new owner will find himself with a home that he has paid for and taken out a mortgage for, but does not really own.
In other versions of the phantom sale scheme, the abandoned home is sold to a co-conspirator. The co-conspirator applies for a mortgage loan and takes the proceeds of the loan, never actually paying the rightful owner of the home for the property. The bank or other mortgage lender is out the money for the mortgage loan in this version of the real estate scam.
Federal Penalties for a Phantom Sale
The most serious penalties for a phantom sale are applied by the federal government for an attempt to defraud a financial institution. 18 U.S. Code Section 1344 addresses bank fraud as a criminal offense. Bank fraud is broadly defined to include any scheme or artifice that is designed or undertaken for the purpose of obtaining money, assets, securities, funds, or credits that are owned or under the control of a financial institution.
Because bank fraud has been so broadly defined, a defendant could be charged with this offense not only for applying for a mortgage under fraudulent pretenses but also potentially for causing a buyer in a phantom sale scheme to apply for a mortgage loan and improperly taking the proceeds of that loan.
Being charged with bank fraud means that you could spend decades of your life in jail if convicted. The maximum penalty for conviction is 30 years and a fine of $1,000,000.
Because phantom sale schemes often involve sending materials through the mail, or via wire, it is also possible a defendant will be charged with wire fraud and postal fraud. Each of these offenses also carries a potential penalty of $1,000,000 and 30 years in prison in situations where a financial institution is affected.
New York Penalties for Phantom Sales
The state of New York punishes defendants who have participated in residential mortgage fraud schemes. Penal Code Section 187 defines this offense and establishes penalties based on the value of the money obtained during the fraud. Unless the phantom sale scheme resulted in a mortgage fraud involving less than $1,000, the offense is a felony in the state of New York.
Getting Help with Real Estate Fraud Defenses
When you are charged with any real estate fraud crime, you need a vigorous defense. You need to understand your rights within the criminal justice system and find an attorney with knowledge of how to represent clients facing serious charges. Bukh Law Firm has represented many clients who have been charged with major federal and state offenses. We understand the available defenses and can help you to make strategic choices when you are charged.
Call today more about how a New York real estate fraud defense lawyer can help if you are accused of involvement with a phantom sale scam.