Real estate fraud can lead to both civil and criminal legal action. Civil cases seek compensation for the harm the plaintiff has suffered. Criminal cases can include fines, jail time, and/or restitution. Allegations of fraud should always be taken seriously, even if you believe your company is not guilty of any wrongdoing.
Defining Real Estate Fraud
Many different actions can fall under the broad umbrella of real estate fraud. Common examples include:
- Misappropriation of funds by diverting loan funding to a project it was not approved for
- Misrepresentation via false documents, such as a fabricated appraisal or financial statement
- Title fraud—misrepresenting a property as having a clean title when it does not
- Foreclosure rescue schemes or property flipping fraud
- Rent skimming by collecting rent from tenants and not paying the mortgage on a property
- Investment fraud—getting companies to buy properties under false pretenses
- Real estate brokers who violate their fiduciary duty to a client
Note that intent is a vital element of fraud allegations in a criminal case. Honest and unintentional mistakes don’t rise to the level of fraud. The prosecution must also prove that the deception was done with the purpose of being allowed to take possession of the property or proceeds from the sale of the property and that the other party relied on the false representation to complete the transaction.
Defending Against Allegations of Fraud
If your company has been accused of real estate fraud, don’t panic. Stone LLP’s experienced real estate trial lawyers can work with you to develop a strong defense for state and/or federal charges. This includes cases that involve bank fraud, wire fraud, mail fraud, perjury, conspiracy, or other charges related to accusations of real estate fraud.
Our approach may be based on procedural, elemental, and damage defenses. The following is a brief overview:
- Procedural defenses hinge on claims that the prosecution did something wrong when filing the case, such as missing a deadline or incorrectly filing certain paperwork.
- Elemental defenses claim the prosecution can’t sufficiently prove one or more elements of fraud.
- Damage defenses claim the prosecution isn’t entitled to the amount they are seeking in damages because they can’t sufficiently prove the harm they have suffered.
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