There has been a veritable explosion of prosecutions for mortgage and real estate fraud throughout the United States, but especially in Georgia. The record number of foreclosures and enormous downturn in real estate as a whole are two prime motivating factors behind such criminal cases. The explosion of the “real estate bubble” has led prosecutors to seek criminal charges for an amazing array of situations related to a failed real estate deal.
There is no end to the type of schemes that are supposedly mortgage fraud, but the vast majority of these cases wind up in federal court. There is no single federal law that makes it a crime to engage in mortgage fraud. As a result, federal prosecutors use some of the standard statues found in many white collar cases brought in the federal court system. For example, in many mortgage fraud cases the defendant is charged with mail fraud, wire fraud, bank fraud or even money laundering. The prosecutors use these various laws to go after people who supposedly had something to do with fraudulent real estate transactions. Just about every aspect of a real estate deal involves something being sent through the mails or over the Internet, thus giving prosecutors wide latitude to use the mail and wire fraud statutes. Additionally, most real estate transactions include financing from some bank or mortgage institution. Therefore, the federal bank fraud laws come into play in many such matters. Finally, it is a very common practice for a federal prosecutor to include money laundering charges in a situation that seems to be a fairly straightforward mortgage case. As described in other parts of this site, money laundering charges can be brought just about any time some funds are involved in or derived from a fraudulent deal. Money laundering charges often carry harsher penalties than the underlying crime, and thus give a federal prosecutor more ammunition than in other typical cases.
There is no single kind of mortgage fraud criminal case. Some of the more common types of mortgage fraud include "flipping" properties, "equity skimming", false down payments, double selling, and fraud during the foreclosure process. Quite often, these cases involve false documentation, fraud involving the appraisal, or even theft of another innocent person's identity. Many times, these prosecutions are brought against real estate agents, mortgage brokers, underwriters, title agents, appraisers, and even real estate attorneys. More and more, however, we are seeing prosecutors bring mortgage fraud cases against bankers who were supposedly aware of fraudulent activities as part of a large real estate deal.
Mortgage fraud cases are exceedingly complex and complicated. Defending such cases requires significant investigation, document review and analysis of the materials in the Government's possession. Quite often, a good criminal defense attorney will want to use his or her own experts when defending against mortgage fraud allegations, specialists such as forensic accountants or appraisers. The attorney needs to understand whether his client was an innocent person used by others, or whether the client was even aware of all aspects of the transactions in question. Sentencing in such cases can become wickedly complicated, and requires an attorney who is highly familiar with the extraordinarily complex Federal Sentencing Guidelines.
Kish & Lietz regularly take on the defense for clients accused of mortgage fraud. Our attorneys are accomplished, aggressive, and prepared to handle these challenging cases. If you would like to talk with us about such a case, please feel free to call us at (404) 588-3991, or contact us online.