House Bill #5695 (2017)

AN ACT RELATING TO CRIMINAL OFFENSES - FRAUD AND FALSE DEALING

Criminalizes residential mortgage fraud and extend the statute of limitations for certain offenses regarding financial and banking fraud.

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  • 2017 – H 5695
  • 2017 – H 5695 SUBSTITUTE A
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  • LC001230
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  • S T A T E O F R H O D E I S L A N D
  • IN GENERAL ASSEMBLY
  • JANUARY SESSION, A.D. 2017
  • ____________
  • A N A C T
  • RELATING TO CRIMINAL OFFENSES - FRAUD AND FALSE DEALING
  • S TATE OF RHODE IS L AND
  • IN GENERAL ASSEMBLY
  • JANUARY SESSION, A.D. 2017
  • ____________
  • A N A C T
  • RELATING TO CRIMINAL OFFENSES - FRAUD AND FALSE DEALING
  • Introduced By: Representatives Kennedy, O`Grady, Johnston, Kazarian, and Messier
  • Date Introduced: March 01, 2017
  • Referred To: House Judiciary
  • (Attorney General)
  • It is enacted by the General Assembly as follows:
  • It is enacted by the GeneralAssembly as follows:
  • SECTION 1. Chapter 11-18 of the General Laws entitled "Fraud and False Dealing" is hereby amended by adding thereto the following section:
  • 11-18-34. Residential Mortgage Fraud.
  • (a) For purposes of this section, the following definitions shall apply:
  • (1) "Mortgage lending process" means the process through which a person seeks or obtains a residential mortgage loan including, but not limited to, solicitation, application, or origination, negotiation of terms, real estate appraisals and surveys, third-party provider services, underwriting, signing and closing, and funding of the loan. Documents involved in the mortgage lending process include, but are not limited to, uniform residential loan applications or other loan applications; appraisal reports; title reports or title policies; homeowners insurance policies; HUD-1 settlement statements; verifications or certifications regarding occupancy intentions; supporting personal documentation for loan applications such as W-2 forms, verifications of income and employment, bank statements, tax returns, and payroll stubs; and any additional documents requested by or submitted to any party in the application or seeking of a residential mortgage loan.
  • (1) "Mortgage lending process" means the process through which a person seeks or obtains a residential mortgage loan including, but not limited to, solicitation, application, or origination, negotiation of terms, real estate appraisals and surveys, third-party provider services, underwriting, signing and closing, and funding of the loan.
  • (2) "Pattern of residential mortgage fraud" means one or more violations of subsection (b)(l) or (b)(2) of this section that involve two (2) or more residential mortgage loans and that have the same or similar intents, results, accomplices, or methods of commission or otherwise result from comparable actions or omissions.
  • (3) "Person" means an individual, corporation, company, limited liability company, partnership, trustee, association, or any other entity.
  • (4) "Residential mortgage loan" means a loan or agreement to extend credit made to a person, which loan is secured by a deed to secure debt, security deed, mortgage, security interest, deed of trust, promissory note, or other document representing a security interest or lien upon any interest in a one to four(4) family residential property including the renewal, modification or refinancing of any such loan.
  • (5) "Victim" means a person who experienced personal loss, including, but not limited to monetary loss, due to a violation subsection (b) of this section.
  • (3) "Person" means an individual, corporation, company, limited liability company, partnership, trustee, association, or any other entity.
  • (4) "Residential mortgage loan" means a loan or agreement to extend credit made to a person, which loan is secured by a deed to secure debt, security deed, mortgage, security interest, deed of trust, promissory note, or any other document representing a security interest or lien upon any interest in a one to four(4) family residential property including the renewal, modification or refinancing of any such loan.
  • (5) "Victim" means a person who experienced personal loss, including, but not limited to monetary loss, due to a violation of subsection (b) of this section.
  • (b) A person commits residential mortgage fraud when, with the intent to defraud, such person:
  • (1) Knowingly makes an omission of a material fact or a written misrepresentation or misstatement of a material fact during the mortgage lending process with the intention that a mortgage lender, a borrower, or any other person that is involved in the mortgage lending process will rely on the absence of such material fact or the making of such material misrepresentation or misstatement; or
  • (2) Knowingly uses or facilitates the use or attempts to use or facilitate the use of any omission of a material fact or written misrepresentation or misstatement of a material fact during the mortgage lending process with the intention that a mortgage lender, a borrower or any other person that is involved in the mortgage lending process will rely on the absence of such material fact or the making of such material misrepresentation or misstatement; or
  • (1) Knowingly makes an omission of a material fact or a written misrepresentation or misstatement of a material fact during the mortgage lending process with the intention that a mortgage lender, a borrower, or any other person that is involved in the mortgage lending process will rely on the absence of such material fact or the making of such materialmisrepresentation or misstatement; or
  • (2) Knowingly uses or facilitates the use or attempts to use or facilitate the use of any omission of a material fact or written misrepresentation or misstatement of a materialfact during the mortgage lending process with the intention that a mortgage lender, a borrower or any other person that is involved in the mortgage lending process will rely on the absence of such material fact or the making of such materialmisrepresentation or misstatement; or
  • (3) Knowingly receives or attempts to receive proceeds or any other funds in connection with a residential mortgage transaction that resulted from an act or acts constituting a violation of subsection (b)(l) or (b)(2) of this section;
  • (4) Conspires with or solicits another to engage in an act or acts constituting a violation of subsection (b)(l) or (b)(2) of this section; or
  • (5) Files or causes to be filed with a city or town clerk any document involved in the mortgage lending process that the person knows to contain an omission of a material fact or a written misrepresentation or misstatement of a material fact.
  • (5) Files or causes to be filed with a city or town clerk any document involved in the mortgage lending process that the person knows to contain an omission of a material fact or a written misrepresentation or misstatement of a materialfact.
  • (c) Any person who violates this section, upon conviction, shall be subject to the following penalties:
  • (1) Any person who commits an offense under subsection (b) of this section shall be guilty of a felony and subject to imprisonment for not more than ten (10) years, a fine of not more than ten thousand dollars ($10,000), or both.
  • (2) Any person who engages or participates in a pattern of residential mortgage fraud or conspires or endeavors to engage or participate in a pattern of residential mortgage fraud shall be guilty of a felony and subject to imprisonment for not more than twenty (20) years, a fine of not more than one hundred thousand dollars ($100,000), or both.
  • (3) Any person who commits an offense and knew that the victim was vulnerable due to age, disability, infirmity, reduced physical or mental capacity, or national origin shall be guilty of a felony and subject to imprisonment for not more than fifteen (15) years, a fine of not more than fifteen thousand dollars ($15,000), or both.
  • (4) The court shall order restitution to any victim.
  • (5) In addition to any criminal penalties above, any person found in violation of this section shall forfeit anything of value received by them in the course of such violation less any restitution they actually paid pursuant to subsection (c)(4) of this section. Action for recovery of these amounts shall be brought in the superior court of any county in which any element of the crime occurred. The actions shall be brought in the name of the state by the attorney general for the benefit and use of the state.
  • (d) It shall be sufficient in any prosecution for residential mortgage fraud to show that the party accused did the act with the intent to defraud. It shall be unnecessary to show that any particular person was harmed financially in the transaction or that the person to whom the material misstatement, misrepresentation or omission was made relied upon the misstatement, misrepresentation or omission.
  • (2) Any person who engages or participates in a pattern of residential mortgage fraud or conspires or endeavors to engage or participate in a pattern of residentialmortgage fraud shallbe guilty of a felony and subject to imprisonment for not more than twenty (20) years, a fine of not more than one hundred thousand dollars ($100,000), or both.
  • (3) Any person who commits an offense and knew that the victim was vulnerable due to age, disability, infirmity, reduced physical or mental capacity, or national origin shall be guilty of a felony and subject to imprisonment for not more than fifteen (15) years, a fine of not more than
  • LC001230/SUB A/2 - Page 2of 5 fifteen thousand dollars ($15,000), or both.
  • (4) The court shallorder restitution to any victim.
  • (5) In addition to any criminal penalties above, any person found in violation of this section shall forfeit anything of value received by them in the course of such violation less any restitution they actually paid pursuant to subsection (c)(4) of this section. Action for recovery of these amounts shall be brought in the superior court of any county in which any element of the crime occurred. The actions shall be brought in the name of the state by the attorney generalfor the benefit and use of the state.
  • (d) It shall be sufficient in any prosecution for residentialmortgage fraud to show that the party accused did the act with the intent to defraud. It shall be unnecessary to show that any particular person was harmed financially in the transaction or that the person to whom the material misstatement, misrepresentation or omission was made relied upon the misstatement, misrepresentation or omission.
  • SECTION 2. Section 12-12-17 of the General Laws in Chapter 12-12 entitled "Indictments, Informations and Complaints" is hereby amended to read as follows:
  • 12-12-17. Statute of limitations.
  • (a) There shall be no statute of limitations for the following offenses: treason against the state, any homicide, arson, first degree arson, second degree arson, third degree arson, burglary, counterfeiting, forgery, robbery, rape, first degree sexual assault, first degree child molestation sexual assault, second degree child molestation sexual assault, bigamy, manufacturing, selling, distribution or possession with intent to manufacture, sell or distribute a controlled substance under the Uniform Controlled Substance Act, chapter 28 of title 21, or any other offense for which the maximum penalty provided is life imprisonment.
  • (b) The statute of limitations for the following offenses shall be ten (1 O) years: larceny under §11-41-2 (receiving stolen goods), §11-41-3 (embezzlement and fraudulent conversion), §11-41-4 (obtaining property by false pretenses or personation), §11-41-11 (embezzlement by bank officer or employee), §11-41-12 (fraudulent conversion by agent or factor), and §11-41-13 (obtaining signature by false pretenses), or any larceny which is punishable as a felony; any violation of chapter 7 of title 11 (bribery); any violation of §11-18-1 (giving false document to agent, employee, or public official); perjury; any violation of chapter 42 of title 11 (threats and extortion); any violation of chapter 15 of title 7 (racketeer influenced and corrupt organizations); any violation of chapter 57 of title 11 (racketeer violence); any violation of chapter 36 of title 6 (antitrust law); of any violation of §11-68-2 (exploitation of an elder); any violation of §11-41- 11.1 (unlawful appropriation); any violation of §11-18-6 (false financial statement to obtain loan or credit); any violation of §19-9-28 (false statement to obtain a loan); any violation of §19-9-29 (bank fraud); or any violation of §11-18-34 (residential mortgage fraud).
  • (c) The statute of limitations for any other criminal offense shall be three (3) years unless a longer statute of limitations is otherwise provided for in the general laws.
  • (b) The statute of limitations for the following offenses shall be ten (1 O) years: larceny under §11-41-2 (receiving stolen goods), §11-41-3 (embezzlement and fraudulent conversion), §11-41-4 (obtaining property by false pretenses or personation), §11-41-11 (embezzlement by bank officer or employee), §11-41-12 (fraudulent conversion by agent or factor), and §11-41-13 (obtaining signature by false pretenses), or any larceny which is punishable as a felony; any violation of chapter 7 of title 11 (bribery); any violation of §11-18-1 (giving false document to agent, employee, or public official); perjury; any violation of chapter 42 of title 11 (threats and extortion); any violation of chapter 15 of title 7 (racketeer influenced and corrupt organizations); any violation of chapter 57 of title 11 (racketeer violence); any violation of chapter 36 of title 6 (antitrust law); of any violation of §11-68-2 (exploitation of an elder); any violation of §11-41- 11.1 (unlawful appropriation); any violation of §11-18-6 (false financial statement to obtain loan
  • LC001230/SUB A/2 - Page 3of 5 or credit); any violation of §19-9-28 (false statement to obtain a loan); any violation of §19-9-29 (bank fraud); or any violation of §11-18-34 (residential mortgage fraud).
  • (c) The statute of limitations for any other criminaloffense shallbe three (3) years unless a longer statute of limitations is otherwise provided for in the generallaws.
  • (d) Any person who participates in any offense, either as a principal accessory, or conspirator shall be subject to the same statute of limitations as if the person had committed the substantive offense.
  • (e) The statute of limitations for any violation of chapter 18.9 of title 23 (refuse disposal), chapter 19 of title 23 (solid waste management corporation), chapter 19 .1 of title 23 (hazardous waste management), chapter 12 of title 46 (water pollution), and chapter 13 of title 46 (public drinking water supply) shall be seven (7) years from the time that the facts constituting the offense or violation shall have become known to law enforcement authorities, unless a longer statute of limitations is otherwise provided for in the general laws.
  • SECTION 3. The act shall take effect upon passage.
  • (e) The statute of limitations for any violation of chapter 18.9 of title 23 (refuse disposal), chapter 19 of title 23 (solid waste management corporation), chapter 19 .1 of title 23 (hazardous waste management), chapter 12 of title 46 (water pollution), and chapter 13 of title 46 (public drinking water supply) shall be seven (7) years from the time that the facts constituting the offense or violation shall have become known to law enforcement authorities, unless a longer statute of limitations is otherwise provided for in the generallaws.
  • SECTION 3. The act shalltake effect upon passage.
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  • EXPLANATION
  • BY THE LEGISLATIVE COUNCIL
  • OF
  • A N A C T
  • RELATING TO CRIMINAL OFFENSES - FRAUD AND FALSE DEALING
  • ***
  • BY THE LEGISLATIVE COUNCIL
  • OF
  • A N A C T
  • RELATING TO CRIMINAL OFFENSES - FRAUD AND FALSE DEALING
  • ***
  • This act would criminalize residential mortgage fraud and extend the statute of limitations for certain offenses regarding financial and banking fraud.
  • This act would take effect upon passage. ======== LC001230 ========
  • This act would take effect upon passage. ======== LC001230/SUB A/2 ========
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Votes

NOTE: Electronic voting records are unofficial and may not be accurate. For an official vote tally, check the House or Senate Journal from the day of the vote.

Floor vote for PASSAGE

June 15, 2017 at 4:47pm
Yeas: 73 / Nays: 0 / Not voting: 2 / Recused: 0
Legislator Vote
Rep. Abney Y
Rep. Ackerman Y
Rep. Ajello Y
Rep. Almeida Y
Rep. Amore Y
Rep. Azzinaro Y
Rep. Barros Y
Rep. Bennett Y
Rep. Blazejewski Y
Rep. Canario Y
Rep. Carson Y
Rep. Casey Y
Rep. Casimiro Y
Rep. Chippendale Y
Rep. Corvese Y
Rep. Costantino Y
Rep. Coughlin Y
Rep. Craven Y
Rep. Cunha Y
Rep. Diaz Y
Rep. Donovan Y
Rep. Edwards Y
Rep. Fellela Y
Rep. Filippi NV
Rep. Fogarty Y
Rep. Giarrusso Y
Rep. Handy Y
Rep. Hearn Y
Rep. Hull Y
Rep. Jacquard Y
Rep. Johnston Y
Rep. Kazarian Y
Rep. Keable Y
Rep. Kennedy Y
Rep. Knight Y
Rep. Lancia Y
Rep. Lima Y
Rep. Lombardi Y
Rep. Maldonado Y
Rep. Marshall Y
Rep. Marszalkowski Y
Rep. Mattiello Y
Rep. McEntee Y
Rep. McKiernan Y
Rep. McLaughlin Y
Rep. McNamara Y
Rep. Mendonca Y
Rep. Messier Y
Rep. Morgan Y
Rep. Morin Y
Rep. Nardolillo Y
Rep. Newberry Y
Rep. Nunes NV
Rep. O'Brien Y
Rep. O'Grady Y
Rep. Perez Y
Rep. Phillips Y
Rep. Price Y
Rep. Quattrocchi Y
Rep. Ranglin-Vassell Y
Rep. Regunberg Y
Rep. Roberts Y
Rep. Ruggiero Y
Rep. Serpa Y
Rep. Shanley Y
Rep. Shekarchi Y
Rep. Slater Y
Rep. Solomon Y
Rep. Tanzi Y
Rep. Tobon Y
Rep. Ucci Y
Rep. Vella-Wilkinson Y
Rep. Walsh Y
Rep. Williams Y
Rep. Winfield Y

Floor vote for FRAUD AND FALSE DEALING

June 28, 2017 at 6:28pm
Yeas: 34 / Nays: 0 / Not voting: 1 / Recused: 2
Legislator Vote
Sen. Algiere R
Sen. Archambault Y
Sen. Calkin Y
Sen. Ciccone Y
Sen. Conley Y
Sen. Cote Y
Sen. Coyne Y
Sen. Crowley Y
Sen. DaPonte Y
Sen. DiPalma Y
Sen. Doyle NV
Sen. Felag Y
Sen. Fogarty Y
Sen. Gallo Y
Sen. Gee Y
Sen. Goldin Y
Sen. Goodwin Y
Sen. Jabour Y
Sen. Kettle Y
Sen. Lombardi Y
Sen. Lombardo Y
Sen. Lynch Prata Y
Sen. McCaffrey Y
Sen. Metts Y
Sen. Miller Y
Sen. Morgan Y
Sen. Nesselbush Y
Sen. Paolino Y
Sen. Pearson R
Sen. Picard Y
Sen. Quezada Y
Sen. Raptakis Y
Sen. Ruggerio Y
Sen. Satchell Y
Sen. Seveney Y
Sen. Sheehan Y
Sen. Sosnowski Y