Real Estate Fraud Lawyer Clarifies How a RE Broker Can be Charged with Fraud
Definition of Broker Fraud
Real estate brokers may become an agent of either a buyer or seller through their course of conduct or through a written agreement. When a real estate broker is an agent, this creates a fiduciary duty to the buyer or seller. A fiduciary duty is the highest duty owed under the law and a broker will be expected to be loyal to the buyer or seller who is being represented.
Real estate brokers have extensive opportunities to access client funds and to participate in real estate transactions with insider information. In some situations, unfortunately, a broker is accused of abusing his or her position to violate the law.
When accusations of real estate broker fraud are made, Bukh Law Firm can help. Our New York City real estate fraud defense lawyers understand the ins-and-outs of all types of federal and state charges that can result from accusations of broker fraud.
We can help you to defend yourself, or explore options such as negotiating a plea deal or securing a grant of immunity in exchange for testifying against co-conspirators. Our goal is to keep you out of jail or minimize penalties and we will bring our legal experience to the table as you respond to charges.
Real Estate Broker Fraud Charges
In January of 2015, the Federal Bureau of Investigation reported that a real estate broker was ordered to pay more than $4 million in restitution to victims arising out of three fraud cases. The real estate broker was also sentenced to 41 months of prison time as well as three years of supervised release.
The broker was charged with wire fraud for making false statements about his income and assets to a mortgage lender in connection with the purchase of a luxury home. The banker was also charged with wire fraud for obtaining and failing to return escrow deposits, as well as with making material false statements to U.S. Citizenship and Immigration Services.
The Internal Revenue Service also reported on a broker sentenced to 420 months in prison for foreclosure rescue scams; as well as a broker sentenced to 42 months in prison for wire, mail and bank fraud in connection with mortgage fraud scams.
Real estate brokers can engage in many different types of fraudulent behavior including:
- Short sale fraud. Brokers may arrange straw buyers or may fail to provide information on higher offers to banks, instead submitting a low offer and arranging a sale and then reselling the house immediately for a profit.
- Mortgage fraud. Brokers may help buyers or sellers to lie about income, or to otherwise improperly obtain funds from mortgage lenders.
- Escrow fraud. Brokers may improperly obtain and use funds deposited into real estate escrow accounts.
- Phantom sales, double selling, and other improper property sales.
- Real estate title fraud, including title insurance fraud scams.
Any type of dishonesty, deception, false promises, or misleading statements can result in criminal penalties for real estate broker fraud.
Penalties for Real Estate Broker Fraud
The most severe penalties for fraud committed by real estate brokers generally occur when a broker is charged with a federal offense. Wire fraud, bank fraud, mail fraud, perjury and conspiracy are all federal offenses – each of which could lead to a lengthy prison sentence.
Bank fraud, mail fraud and wire fraud alone each carry a potential penalty of 30 years in prison and a $1 million fine if a financial institution is defrauded as part of a scheme. A real estate broker who plays any role in a fraud offense could be charged with all underlying crimes committed by any co-conspirators under federal conspiracy laws. It is common for indictments to be handed down against brokers with multiple counts and a variety of different federal charges.
There are also state-level criminal charges that a real estate broker could be faced with, including residential mortgage fraud charges. New York laws make residential mortgage fraud a felony if more than $1,000 is taken.
Getting Help from a Real Estate Broker Fraud Lawyer
In addition to jail time, it is possible that an accusation of real estate broker fraud could lead to your assets being frozen, to criminal or civil forfeiture, and to required restitution. You need to protect your freedom and your financial security.
Contact a New York City real estate fraud lawyer at Bukh Law Firm as soon as you are under investigation for real estate fraud to get the help you need responding to charges.