South Carolina couple sentenced for real estate fraud

| Nov 10, 2020 | White Collar Crimes |

A federal judge in South Carolina handed down severe prison sentences to a married couple on Sept. 29 for bilking almost 200 people out of more than $2 million in a fraudulent rent-to-buy real estate scheme. The couple were also ordered to pay their victims, who live in Georgia and North Carolina as well as the Palmetto State, more than $2.6 million in restitution. The woman was sentenced to 136 months in prison. She was found guilty by a jury. The man was sentenced to 78 months in prison. He entered into a plea agreement. They will both serve three years of supervised release after completing their custodial sentences.

Rent-to-own scheme

Prosecutors say the couple targeted property owners who owed more on their mortgages than their homes were worth and people who wanted to buy a house but were having trouble obtaining financing. Homeowners were told that their mortgages would be paid off, and rent-to-own buyers were told that their monthly payments would be applied to the selling price. According to U.S. attorneys, only about $1.4 million of the approximately $2.6 million the couple received from rent-to-own buyers was applied to the sellers’ mortgages. The rest of the money was used by the couple to pay personal expenses.

Foreclosure notices

The victims only found out about the scheme when banks started to foreclose on unpaid mortgages. Sellers received foreclosure notices, and rent-to-own buyers were informed that the homes they were living in had been purchased by third parties at foreclosure auctions. The case was investigated by the Department of Housing and Urban Development and the Federal Bureau of Investigation.

Plea agreements in federal cases

The federal penalties for white-collar crimes like fraud are harsh, but this case reveals that U.S. attorneys are willing to reduce them substantially for defendants who plead guilty. Experienced criminal defense attorneys may advise those accused of committing federal crimes to consider plea agreements when the evidence against them is compelling and their chances of being found guilty by a jury are high.