Real estate fraud is illegal conduct adversely affecting a person’s title to or use of property. This includes the theft or taking of funds associated with the illegal conduct. Real estate fraud takes on many forms. Home equity and loan fraud, notary fraud, mortgage and loan modification fraud, identity theft, fraudulent transfers of property, securities fraud, squatter issues and more, all fall under our description of real estate fraud.
Real estate fraud often evolves with time. Unlike other illegal conduct, constant change is normal. Schemes encountered five years ago have been replaced by different scams that generally match the current economic environment. For example, title and equity fraud, prevalent in the past, was replaced by illicit activity involving loan modification and foreclosure fraud.
The REF Unit consists of prosecutors and investigators specially assigned and trained to address unique scams and issues surrounding real estate fraud. The unit utilizes a collaborative working model. Both a prosecutor and investigator are assigned to a case from inception and work side-by-side on that matter until resolution. Therefore any particular case can be properly assessed at any stage allowing for the proper allocation of time and resources when needed.
The public initiates the vast majority of the unit’s cases by directly submitting a complaint to the Office. A prosecutor then conducts a review of the submitted information and determines whether the matter should either be accepted or rejected for investigation based on an evaluation of the law and known facts. The attorneys forward complaints to investigators if assertions in the complaint allege actual criminal conduct and if potential evidence supports a criminal conviction. Conversely, the attorneys are required to reject cases if they are civil in nature or if insurmountable proof problems are evident.
After referral, an assigned investigator begins an investigation and starts gathering evidence. The process can be long and time consuming. An investigator will likely conduct interviews of both victims and witnesses, obtain records, execute search warrants, and write reports. During this process, investigators may discover evidence needed to prove a case no longer exists, requiring termination of the investigation. For example, an escrow company closes and necessary documents cannot be found.
Investigators submit their reports to the assigned prosecutor after completion of the investigation. After reviewing the case, the assigned prosecutor files the matter initiating a criminal case. While the prosecutor may determine a case should not be filed, our collaborative system generally identifies case impediments early on.
Upon filing of the case, court action begins consisting of court appearances, motion work and plea disposition or trial. Real estate fraud cases commonly involve multiple defendants. Likewise, real estate cases generally include multiple schemes and victims. Thus, charging documents by REF can easily contain 20 or more felony counts.
A substantial amount of follow up work occurs even after defendants have been found guilty and sentenced. Prosecutors often address and litigate matters of restitution. Additionally, the attorneys in the REF Unit prepare and submit motions and obtain orders for recordation that restores property to rightful owners by correcting the chain of title.
If you believe a real estate fraud has been committed, you can report it to:
Real Estate Fraud Unit
San Bernardino County District Attorney’s Office
303 W. 3rd Street, 4th Floor
San Bernardino, CA 92415-0023
Unfortunately, there is no one-stop shop for checking out companies, and our office cannot give you personal legal advice or comment on the legitimacy of a particular business. By researching a company, you may be able to detect whether the business is legitimate and help ensure that you invest wisely your hard-earned money. If you have any doubts about a company's business practices, here is some general advice to consider:
• Ask for a list of references. The list should include companies from which the company buys materials, as well as distributors or customers to whom the company sells products or services.
• Ask for a business statement. A business statement should describe the daily practices of the company. It should provide general information on the company, such as the number of years in business, its locations, the owners and a description of its organizational structure.
• Ask about licenses and compliance with applicable state and local requirements. Find out what licenses the company must possess and who to contact to verify that the licenses have been obtained. Find out what actions the company has taken to ensure that all its actions are legal within the State of California.
• Ask about a stock portfolio or income statement. If you are thinking about investing in a company, ask for a stock portfolio or income statement. These documents will provide the investor with information on the company's assets and liabilities. If the firm is publicly traded, check the company's website for financial statements and other regulatory filings. Conduct an Internet search for as much information as you can learn about the company's performance and conduct, and what others are saying about the company.
• Check complaints about the company. As a law enforcement agency, the Attorney General's Office does not release information on consumer complaints that involve as-yet-unproven allegations that could create misleading and unfair impressions about a company. Our Consumer Law Section uses these consumer complaints to look for patterns of deceptive or unfair business practices where legal action brought by the Attorney General could serve the interest of the general public. While information from our office is limited, you may able to learn about consumer complaints about the company by contacting the Better Business Bureau where the company is located or doing business.
- Never do business with people that you have never met face-to-face.
- Get a business card and keep it in a safe place.
- Do not go to coffee shops or restaurants to complete paperwork. A legitimate real estate company will have an office.
- Check the names of individuals and companies on the internet to verify that they are licensed through www.dre.ca.gov
- Do not give out your social security number or other personal confidential identifying information about you until a thorough check on the individual or company you are doing business with have been conducted.
- Never pay for real estate deals with cash. Pay with a check, so that your payments can be traced if needed.
- If you property is in foreclosure deal with your mortgage lender directly, call the number on your paperwork.
- Don't pay up-front fees. Foreclosure consultants are prohibited by law from collecting money before services are performed.
- Don't ignore letters from your lender or loan servicer. Responding to those letters is your best bet for saving your house.
- Don't transfer title or sell your house to a "foreclosure rescuer." Beware! This is a scam to convince homeowners they can stay in the home as renters and buy their home back later. It might also be part of a fraudulent bankruptcy filing. Either way, a scammer can then evict the victim and take the home.
- Don't pay your mortgage payments to anyone other than your lender or loan servicer. Mortgage consultants often keep the money for themselves.
- Never sign any documents without reading them first. Many homeowners think that they are signing documents for a loan modification or for a new loan to pay off the mortgage they are behind on. Later, they discover that they actually transferred ownership of their home to someone who is now trying to evict them.
If the house affected by real estate fraud is located in one of the below listed cities, or in certain circumstances, if you paid money to someone while in these cities, you can file a complaint through the San Bernardino County District Attorney’s Office, Real Estate Fraud Prosecution Unit:
Big Bear Lake