Crimes, Misdemeanors, Misconduct – an Overview

ORLANDO, Fla. – I enjoyed a recent conversation with a room of engaged members at REBarCamp in Destin where the topic was how to not end up in “Realtor® jail.” We talked about a range of topics but kept coming back to one key point -- the value of understanding how the various forums that investigate complaints operate.

When it comes to real estate licensees accused of misbehavior, cases can end up before a criminal court, the Florida Real Estate Commission (FREC) or a local board ethics panel. Today, we’ll look at the criminal court system.

The court system is complicated. County courts, circuit courts, the Florida Supreme Court and federal courts all have different jurisdictions and roles to play. They can also reach different conclusions, like a recent case I read about where a lower court’s decision was reversed by a district court of appeal, only to be reversed back to the original ruling by the Florida Supreme Court. That’s why it’s important for a defendant to have a lawyer they trust to represent them, hopefully one who has plenty of experience successfully arguing in front of the type of court they’re facing.

It's also important to know what to say and when to say it. During my brief stint working in criminal justice (both prosecution and defense), the most common theme was defendants who try to talk their way out of trouble without realizing they are actively digging a hole that threatens to bury them. And don’t get me started about posting evidence of crimes on social media. The best cases, from a defense lawyer’s perspective, are ones where the accused exercises their right to remain silent before retaining competent counsel.

A criminal case can end with a guilty plea, a plea of nolo contendere (in which the defendant doesn’t admit guilt but also doesn’t fight the charges), a finding of guilt by a judge or jury or an acquittal, which allows the defendant to go free.

Prosecutors have the highest standard of proof in the United States justice system – beyond a reasonable doubt. To win a case, they must prove every element of the crime to satisfy this high bar. As English jurist William Blackstone wrote in his 18th century work, Commentaries on the Laws of England, “It is better that ten guilty persons escape than one innocent suffer.”

Although some cases can move relatively quickly, the criminal justice system can take months or years to reach a conclusion. If a case is appealed, it can take longer still. And it can be costly, both for the prosecution and defense.

When it comes to criminal cases against real estate licensees, what offenses garner the most attention? Mishandling money and fraud lead the way. Here are a few cautionary tales:

• A federal court convicted a Florida real estate broker in 2019 after he convinced a retired schoolteacher from Pennsylvania to invest $300,000 in a plan to buy, rehabilitate and sell properties. He spent the funds on a Porsche, Rolex watch and gambling. He followed it up by securing a second “investment” of $261,000, which he again spent gambling. His legal problems began when the retired teacher sued for a return of her money, and he declared bankruptcy. The FBI then opened an investigation, leading to his conviction and a sentence of 5 to 10 years in federal prison.

• If you’re wondering what could happen if you fail to pay taxes, a Florida sales associate was convicted of willfully failing to file income tax returns from 2017-2021. During that time, the associate earned commissions averaging over $150,000 per year. He asked to be paid in increments under $10,000, which he would cash at the bank upon receipt. The associate was sentenced to 14 months in federal prison.

• A Florida broker was convicted of mortgage fraud in 2024 after helping buyers qualify for loans by creating fictitious paystubs and W-2s showing false earnings. She was sentenced to 4 months imprisonment.

• A real estate licensee and her spouse, who also owned a title company, pitched an investment opportunity where friends and neighbors would invest in a project to flip a house and sell it for profit. They collected over $500,000, which went towards luxury vehicles, vacations, private school tuition and renting an expensive home. Both received multi-year sentences.

These are the key areas that garner headlines as it relates to real estate activity, although there are a whole host of other crimes licensees can commit, whether they be serious felonies like homicide or less serious misdemeanors like disorderly conduct. All real estate licensees should take note that they are obligated to self-report any time they plead guilty, plead nolo contendere or are convicted or found guilty of a crime. This applies to ANY crime in ANY jurisdiction, and the licensee has 30 days after the plea or finding of guilt to report it to the Florida Department of Business and Professional Regulation (DBPR).

In the next article, we’ll take a broad look at how FREC’s process works and review some cautionary tales from those hearings.

Joel Maxson is Associate General Counsel

Note: Information deemed accurate on date of publication

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