Will I Go to Jail for Equity Skimming?

Equity skimming is a serious offense that can lead to significant legal consequences, including jail time. At Spodek Law Group, we understand the complexities and nuances of this crime and are here to provide you with the necessary legal support. Our experienced attorneys can help you navigate the legal system and work towards achieving the best possible outcome for your case.

What is Equity Skimming?

Equity skimming is a type of real estate fraud where an individual or group purchases a property, often at a low price, and then collects rent without making mortgage payments or paying property taxes. The goal is to maximize rental income before the property is foreclosed upon, leaving the lender or future purchaser with a property in poor condition and a large outstanding mortgage.

Key Characteristics of Equity Skimming:

• Purchasing Distressed Properties: Typically, the properties involved are already in financial distress.
• Collecting Rent: The perpetrator collects rent from tenants without using the income to pay the mortgage or property taxes.
• Foreclosure: Eventually, the property is foreclosed upon, and the perpetrator disappears with the rental income.

Legal Consequences of Equity Skimming

Equity skimming is considered a serious crime and can lead to both federal and state charges. The penalties can be severe, including significant fines and imprisonment.

Federal Penalties:

• Imprisonment: Up to 5 years in federal prison for each count of equity skimming.
• Fines: Up to $250,000 per count.
• Restitution: Payment to victims for their losses.
• Asset Forfeiture: Seizure of assets obtained through the fraudulent scheme.

State Penalties:

Penalties vary by state but can include:

• Imprisonment: Ranges from 1 to 15 years depending on the state.
• Fines: Can be substantial, often up to $100,000.

Case Law Examples

One notable case is U.S. v. Gaudin, where the defendant was convicted of equity skimming for failing to pay HUD/FHA insured mortgages while retaining rental income. The court upheld a five-year prison sentence, illustrating the severity with which courts treat this offense.

Defending Against Equity Skimming Charges

If you are facing charges of equity skimming, it is crucial to have an experienced legal team on your side. At Spodek Law Group, we can help you build a strong defense by:

• Challenging the Evidence: We will scrutinize the evidence against you to identify weaknesses in the prosecution's case.
• Negotiating Plea Deals: In some cases, we may negotiate a plea deal to reduce the charges or penalties.
• Providing Expert Testimony: We can bring in experts to testify on your behalf and provide a clearer understanding of the financial transactions involved.

Collateral Consequences

Beyond fines and imprisonment, an equity skimming conviction can have long-lasting impacts on your life, including:

• Loss of Professional Licenses: You may lose any professional licenses you hold.
• Employment Difficulties: Finding a job can become challenging with a criminal record.
• Credit Damage: Your credit score can be severely affected, making it difficult to obtain loans.
• Immigration Consequences: Non-citizens may face deportation or other immigration-related issues.

Conclusion

Equity skimming is a serious crime with potentially life-altering consequences. If you are facing charges, it is crucial to seek legal assistance immediately. At Spodek Law Group, we have the knowledge and experience to defend you against these charges and work towards the best possible outcome. Contact us today at 212-300-5196 for a free, confidential consultation. Let us put our expertise to work for you and help you navigate this challenging legal situation