New York white collar crimes are found in all different shapes and sizes. From misdemeanor to felonies and from crimes involving individuals to large multi-party schemes, Mortgage Fraud, pursuant to New York Penal Law sections 187.05, 187.10, 187.15, 187.20 and 187.25, is one of the growing areas of white collar crime. Although not as common as “regular” Mortgage Fraud, a crime associated with real estate transactions and this particular offense is Fraudulent Disposition of Mortgaged Property pursuant to New York Penal Law section 185.10.
NY PL 185.10, Pursuant to Fraudulent Disposition of Mortgaged Property:
A person is guilty of Fraudulent Disposition of Mortgaged Property when, having theretofore executed a mortgage of real or personal property or any instrument intended to operate as such, he sells, assigns, exchanges, secretes, injures, destroys or otherwise disposes of any part of the property, upon which the mortgage or other instrument is at the time a lien, with intent thereby to defraud the mortgagee or a purchaser thereof.
Fraudulent Disposition of Mortgaged Property is a class “A” misdemeanor punishable by up to one year in jail.
Briefly, for one to perpetrate this crime, one must possess an “intent to defraud.” In fact, it has been held that one is not guilty of this crime if one does not possess this fraudulent intent. See People v. Staton, 79 A.D. 634 (2 Dept. 1909) (There was no “intent to defraud” where a mortgagor shipped his mortgaged goods to his spouse who was in another state. The mortgage stipulated this could not be done without the consent of the mortgagee. The mortgagor did not attempt to conceal anything and made voluntary payments on his mortgage. Therefore, there was no “intent to defraud.”)
Even if one is found to have the “intent to defraud,” it is likely that the crime of Fraudulent Disposition of Mortgaged Property is the least of one’s concerns. If one obtains money or property, for example, valued in the tens or hundreds of thousands of dollars, one may also face the crimes of Grand Larceny in the Third and Second Degrees where the punishment may be up to seven or fifteen years in prison respectively. Moreover, a defendant may face additional felonies including, but not limited to, Falsifying Business Records, Forgery and Offering a False Instrument for Filing.