Common Criminal Charges Against Real Estate Agents
Real estate agents, who handle important responsibilities and access sensitive client data, are essential in the intricate realm of real estate transactions.
Their roles go beyond mere property deal facilitation, often involving legal and financial considerations. Therefore, in California, when a real estate agent is charged with a crime, the consequences can be far more extensive than just criminal penalties.
Real estate fraud happens when an individual commits a crime related to buying, selling, or financing property.
Whether prosecuted under California state law or federal law, such charges can lead to severe consequences, including substantial fines, restitution, and imprisonment.
The serious penalties underscore the importance of understanding the risks of real estate fraud.
Wide Range of Illegal Activities
California's real estate fraud laws are extensive, covering a wide range of illegal activities, including housing scams, mortgage fraud, rental agreement schemes, straw buyer fraud, property flipping, and predatory lending.
These laws highlight the serious penalties involved in fraudulent conduct. Fraud can happen at any stage of a property transaction, including during foreclosure.
California has multiple statutes to prosecute such crimes, including Penal Code 487 PC for grand theft, Penal Code 532 PC for theft by false pretenses, Penal Code 115 PC for filing forged documents, and Civil Code 2945.4 for foreclosure fraud.
Real estate fraud occurs when someone commits dishonest acts that unjustly benefit themselves during a property transaction, including agents.
Anyone involved can face charges if they engage in illegal activities, such as lying on applications or submitting false documents.
For licensed California real estate agents, an arrest and charges can result in serious repercussions, such as disciplinary measures and possible license revocation.
California Department of Real Estate (DRE)
When a California real estate agent faces criminal charges, their primary concern is usually the potential penalties if convicted, which is understandable.
These penalties might range from fines and imprisonment to probation and community service, depending on the type and severity of the offense.
For a real estate agent, such charges can have serious consequences, greatly affecting their professional career.
The California Department of Real Estate (DRE) has extensive authority to regulate, supervise, and discipline licensees in the state.
They only need to verify a violation of the California Real Estate Law by using the "preponderance of the evidence" standard, rather than the "guilt beyond a reasonable doubt" standard used in criminal cases.
Possible Disciplinary Actions by the DRE
The law grants the DRE authority to take disciplinary actions based on criminal convictions. Additionally, they can investigate any conduct that raises questions about your honesty and integrity.
Even if you receive leniency in criminal court regarding sentencing, the DRE may still impose penalties related to the charges, which could become part of the public record.
- Fines
- Probation
- Formal reprimand.
- License restrictions.
- Suspension of your license.
- Permanent revocation of your license.
What Does the Self-Reporting Mandate Entail?
California Real Estate Law requires licensed agents to self-report certain incidents to the DRE within 30 days of their occurrence.
- Being formally accused or charged with a felony.
- Being convicted of any crime, and
- Any disciplinary action taken by a different state licensing board or a state/federal agency.
While courts may automatically send a report of your conviction to the DRE, failing to report this yourself is a violation that could lead to disciplinary action.
Types of Crimes That Can Endanger a Real Estate License
The DRE can technically discipline anyone based on any criminal conviction. Nevertheless, charges that typically draw concern are "crimes of moral turpitude.'
This legal term describes conduct that conflicts with community expectations of justice, honesty, or morals.
Such crimes are regarded seriously because they impact a person's character and reliability—key qualities for a profession founded on client trust. Examples of crimes that may involve moral turpitude include, but are not limited to:
- Fraud: Misrepresentation or deceit in financial dealings can seriously harm clients and other stakeholders.
- White Collar Crimes: For example, crimes like embezzlement, insider trading, and tax fraud directly compromise the integrity needed in real estate transactions.
- Domestic Violence: Violent actions at home can negatively impact how others view your character and decision-making skills.
- DUI: Repeated offenses, especially, may signal a neglect for public safety and legal responsibilities.
- Drug Possession: Carrying controlled substances without a prescription or having illegal items may indicate a disregard for legal rules.
- Sex Offenses: Any sex crime, such as sexual assault, lewd conduct with a child, or indecent exposure, can severely damage a chiropractor's career.
How Can a Criminal Defense Attorney Help You?
Since the DRE is less likely to question your real estate license if you are acquitted, your primary defense should be to consult an experienced California criminal defense attorney—ideally one who specializes in defending licensed professionals. A skilled attorney can:
- Assess the evidence you face and construct a strong defense plan.
- Seek opportunities to advocate for charges to be reduced or dismissed.
- Assist in safeguarding your constitutional rights throughout every stage of the criminal process.
- Help negotiate a plea deal, if suitable, to reduce penalties; and
- Guide how to meet your self-reporting obligations to the DRE while minimizing potential consequences.
- Consult a qualified administrative law attorney for assistance in defending your professional license if the DRE initiates an investigation.
It's important to understand that not every conviction automatically leads to disciplinary action by the DRE.
For instance, a single DUI may not be classified as a crime of moral turpitude unless there are aggravating factors or multiple convictions.
Nonetheless, do not assume that the courts or the DRE will overlook minor criminal offenses — always take precautions to safeguard yourself.
Reach out to our criminal defense law firm for further guidance. Cron, Israels & Stark is located in Los Angeles, CA. Contact us to review your case.