The American Bar Association reports that many of the defendants in mortgage and real-estate fraud prosecutions are lawyers. As a state that experienced a particularly painful real estate meltdown in recent years, several Florida lawyers figure prominently in the report.
Mortgage fraud models often require an attorney to participate. For example, in a straw buyer mortgage fraud scheme, every participant in a legitimate mortgage transaction must play a role in the plan. Two Florida lawyers recently pled guilty in a straw buyer case for helping close fraudulent condominium transactions. Other schemes might also be more successful when participants can point to a lawyer’s involvement to convince victims that the plan is not fraudulent.
Regardless of the reasons underlying the high levels of lawyer participation, several indicators confirm that it is happening. For example, one national organization said that 6,000 of 25,000 reported mortgage fraud incidents involved lawyers or law firms. The California State Bar also reported 11,000 complaints about attorneys since 2009.
Like any defendant, lawyers face a variety of consequences depending on the facts of each individual case. In addition to the usual criminal penalties that can include prison terms and restitution, mortgage fraud cases can result in professional consequences like disbarment.
In the case of mortgage fraud charges, even the best real estate lawyer needs the help of an experienced criminal defense attorney.
Source: ABA Journal, “‘Huge’ Number of Lawyers Accused In Civil and Criminal Mortgage-Related Fraud Cases,” Martha Neil, Sept. 20, 2012