A phantom sale is a form of real estate fraud that can result in prosecution under New York law as well as federal penalties. Although phantom sales are becoming increasingly common due to the number of abandoned properties, becoming involved in any scheme related to a phantom sale can lead to severe penalties including the possibility of decades in jail.
Financial institutions and banks have tremendous influence with prosecutors and lawmakers, and defendants can expect to face significant, aggressive prosecution if you are accused of participating in any scam or fraud against lenders. If you are facing charges relating to a phantom sale and you need a legal team to fight on your behalf, contact Raisser & Kenniff, PC today. We can help defend you against the allegations or negotiate a plea agreement to potentially reduce the life-altering penalties you are facing.
What is a Phantom Sale?
To sum it up, a phantom sale happens when someone sells a property but he or she does not have any legal justification or authority to do so. Typically, the phantom sale scam begins by identifying an abandoned property or determining that a residence is not being actively managed or currently occupied. After a property is “chosen,” the individual files a false deed, transferring that property to a second individual who also takes an active role in the scam.
The co-conspirator may sell the home and pocket the proceeds of the sale. The new owner will receive a home, complete with a mortgage, but he does not actually own the home.
In other types of phantom sales, the unoccupied home is sold to a co-conspirator, who then applies for a mortgage loan and pockets the proceeds of the loan. The co-conspirator never pays the actual owner for the property. The mortgage lender or bank then loses the money for the mortgage.
Phantom Sale Penalties
Although the range of penalties you may face vary, the federal government gives the most severe penalties for attempting to defraud a financial institution. Under 18 U.S. Code Section 1344, bank fraud is defined as any artifice or scheme undertaken or designed for the purpose of obtaining credits, funds, securities, assets or money that are under the control of or owned by a financial institution.
Since the term “bank fraud” is only broadly defined, a defendant may face charges of fraudulently applying for a mortgage as well as for coercing a buyer to apply for a loan and illegally pocketing the proceeds of that loan.
If convicted of bank fraud, a defendant may spend decades of his or her life in jail. In New York, the maximum penalty for conviction is a fine of $1 million and 30 years incarceration. Since phantom sale fraud often involves sending documents via wire or through the postal service, a defendant may also face charges of mail fraud and wire fraud. In situations where a bank or financial institution is affected, each of the aforementioned offenses also carries a penalty of up to 30 years in prison and $1 million.
Under Penal Code Section 187, the state of New York defines residential mortgage fraud schemes and establishes penalties based on the sum of money obtained as a result of the fraud. The offense is a felony in New York unless the phantom sale scam resulted in mortgage fraud of less than $1,000.
Need Help With Your Real Estate Defense Strategy? Our Attorneys Can Help
If you are charged with involvement in a phantom sale scheme or any other type of real estate fraud, it goes without saying that you need an aggressive defense strategy. It is important to understand your legal rights and work with a legal team who knows how to represent defendants facing these serious charges. Here at Raisser & Kenniff, PC, we have provided vigorous defense services to clients facing major state and federal offenses, and we can work with you to determine your options and help you make the best choice possible for your situation.
Call us today to learn more about our New York real estate fraud defense services or to speak to a member of our legal team about your case. We are more than happy to answer any questions you have and walk you through the criminal justice system.