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NY Penal Law § 185.10: Fraudulent Disposition of Mortgaged Property

July 5, 2020 Federal Criminal Attorneys

It is a crime to sell, transfer real property that is mortgaged without making certain that all involved, including the transferee and the mortgagee, are aware of and approve of your transaction.  You could face prosecution pursuant to New York Penal Law § 185.10 for fraudulent disposition of mortgaged property if you: 

  1. take out a mortgage on a piece of property, and 
  2. you then sell, assign, destroy or otherwise dispose of the entirety or any portion of the property that is encumbered with the mortgage, and
  3. your intent in this sale is to defraud the mortgagee or purchaser of the property. 

This law applies not only to residential property that is secured by a mortgage, but also to commercial and other types of real property that are secured by a mortgage.

Offenses that are Related

Fraud in Insolvency: New York Penal Law § 185.00

Fraud involving a security interest: New York Penal Law § 185.05

Fraudulent disposition of property subject to a conditional sale: New York Penal Law § 185.15

Possible Defenses

In order to be convicted of this crime, you need to have had the intention to defraud. If the prosecutor is not able to demonstrate such intent, or if you can show the court that you had another, innocuous intention connected to your actions, then you have a plausible defense against the charge.

The Sentence

Fraudulent disposition of mortgaged property is categorized as a class A misdemeanor. If you are convicted of this offense, the judge could sentence you to jail for up to a year. You may also receive a probation sentence of up to 3 years and be ordered to pay a fine.



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