Punishments for Federal Mortgage Fraud in New York
Mortgage fraud is a serious crime that can lead to severe punishments at both the state and federal level in New York. This type of fraud involves intentionally providing false or misleading information on mortgage applications and documents in order to obtain mortgage loans or make illegal profits.
Penalties for Federal Mortgage Fraud
The potential sentences for being convicted of federal mortgage fraud charges include:
- Up to 30 years in federal prison for bank fraud, mail fraud, or wire fraud. The judge determines the exact number of years based on factors like the scope of the fraud and the defendant’s role. Harsher sentences are likely for large-scale schemes and leaders/organizers.
- Fines up to $1 million for bank fraud, mail fraud, or wire fraud. The judge determines the exact fine amount based on factors like the scope of the fraud and whether illegal profits were made.
- Restitution to compensate victims for losses caused by the fraud. The judge determines the restitution amount based on factors like the number of victims and extent of losses.
- 5 years of supervised release after serving prison time. Violating release conditions can result in more jail time.
- Civil penalties from other federal agencies related to the mortgage fraud. For example, the SEC may impose fines for securities violations.
Judges consider the Federal Sentencing Guidelines and factors like the defendant’s criminal history when determining exact sentences within the maximums. Plea agreements may result in prosecutors recommending more lenient sentences.
Defenses Against Federal Mortgage Fraud Charges
There are several possible defenses that may be raised against federal mortgage fraud allegations6:
- Lack of intent – Prosecutors must prove you knowingly and intentionally committed fraud. You can argue you did not act with intent or knowledge of wrongdoing.
- Lack of materiality – Prosecutors must show false statements were material or relevant to the lender’s decision. You can argue the statements were not important or relied upon by the lender.
- Lack of jurisdiction – Federal mortgage fraud laws require interstate activities like mail or wires being used. You can argue your conduct was strictly in-state.
- Statute of limitations – Prosecutors normally must charge within 10 years for federal fraud crimes. You can argue the statute expired before charges were filed.
- Coercion/duress – These can potentially excuse criminal conduct in limited circumstances, like threats endangering your life.
- Entrapment – This is when law enforcement induced you to commit an offense you otherwise would not have.
An experienced federal mortgage fraud defense lawyer can assess the evidence and determine if any viable defenses may apply in your specific case.
New York State Mortgage Fraud Laws
In addition to federal laws, mortgage fraud can also be prosecuted at the state level in New York under the penal code3:
- Residential mortgage fraud – This covers making intentional false statements or concealing facts on mortgage loan applications for residential properties.
- Mortgage fraud – This covers schemes to defraud mortgage lenders like inflated appraisals, straw buyers, etc.
Penalties under New York law vary based on the value involved in the fraud5:
- Class B felony – Up to 25 years in prison and a fine up to double the amount obtained by the fraud for schemes involving over $1 million.
- Class C felony – Up to 15 years in prison and a fine up to double the amount obtained by the fraud for schemes involving over $50,000.
- Class D felony – Up to 7 years in prison and a fine up to double the amount obtained by the fraud for schemes involving over $3,000.
- Class E felony – Up to 4 years in prison and a fine up to double the amount obtained by the fraud for schemes involving over $1,000.
- Class A misdemeanor – Up to 1 year in jail and a fine up to double the amount obtained for schemes under $1,000.
Prosecutors can charge both federal and state offenses for the same mortgage fraud conduct.