Category Archives: Auction Rigging

ELEVEN NORTHERN CALIFORNIA REAL ESTATE INVESTORS INDICTED FOR

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WASHINGTON — A federal grand jury in San Francisco returned three multi-count indictments against eleven real estate investors for their role in bid rigging and fraud schemes at foreclosure auctions in Northern California, the Department of Justice announced.

The indictments, filed late yesterday in U.S. District Court for the Northern District of California in Oakland, California, charge Northern California real estate investors Michael Marr; Javier Sanchez; Gregory Casorso; Victor Marr; John Shiells; Miguel De Sanz; Alvin Florida Jr.; Robert A. Rasheed; John L. Berry III; Refugio Diaz; and Stephan A. Florida with participating in conspiracies to rig bids and schemes to defraud mortgage holders and others.  The indictments allege that the defendants agreed not to compete at public auctions in return for payoffs and diverted money to themselves and others that should have gone to mortgage holders and other beneficiaries.  All defendants were charged with bid rigging and fraud in Alameda County, California.  Marr, Sanchez, Shiells, and De Sanz were also charged with bid rigging and fraud in Contra Costa County, California.  Additionally, Shiells and De Sanz were charged with bid rigging and fraud in San Francisco County, California.

To date, 47 individuals have pleaded guilty to criminal charges as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public foreclosure auctions in Northern California.  On Oct. 22, 2014, a federal grand jury in San Francisco returned an eight-count indictment against five additional real estate investors for their role in bid rigging and fraud schemes at foreclosure auctions in San Mateo and San Francisco Counties, California.

“Collusion at the foreclosure auctions created an unfair playing field where conspirators pocketed illegal payoffs at the expense of lenders and distressed homeowners,” said Brent Snyder, Deputy Assistant Attorney for the Antitrust Division’s criminal enforcement program.  “The division will continue to investigate and prosecute local cartels that harm the competitive process.”

The indictments allege, among other things, that at various times between June 2007 and January 2011, the defendants conspired to rig bids to obtain numerous properties sold at foreclosure auctions in Alameda, Contra Costa, and San Francisco counties, negotiated payoffs for agreeing not to compete, held second, private auctions known as “rounds,” concealed those rounds and payoffs, and, in the process, defrauded mortgage holders and other beneficiaries.

“These charges demonstrate our continued commitment to investigate and prosecute individuals and organizations responsible for the corruption of the public foreclosure auction process,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office.  “The FBI is committed to work these important cases and remains unwavering in our dedication to bring the members of these illegal conspiracies to justice.”

Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  Each count of mail fraud carries a maximum sentence of 20 years in prison and a $1 million fine.  The government can also seek to forfeit the proceeds earned from participating in the mail fraud schemes.  The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million.

These indictments are the latest charges filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda counties, California.  These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300, or call the FBI tip line at 415-553-7400.

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit www.StopFraud.gov.

Alabama Real Estate Investor Pleads Guilty to Conspiracy to Commit Mail Fraud

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An Alabama real estate investor pleaded guilty yesterday for his role in a conspiracy to commit mail fraud related to public real estate foreclosure auctions held in southern Alabama, the Department of Justice announced today.  To date, 10 individuals and two companies have pleaded guilty in connection with the department’s ongoing investigation into bid rigging and fraudulent schemes in the Alabama real estate foreclosure auction industry.

Chad E. Foster, a resident of Theodore, Alabama, pleaded guilty yesterday to an indictment filed in the U.S. District Court for the Southern District of Alabama, charging him with one count of conspiracy to commit mail fraud affecting a financial institution.  According to court documents, Foster knowingly joined a conspiracy with others to, among other things, fraudulently acquire title to selected properties at artificially suppressed prices, to conduct secret, second auctions open only to members of the conspiracy, to make payoffs to and receive payoffs from co-conspirators, and to divert money away from financial institutions, homeowners and others with a legal interest in selected properties.

“This guilty plea demonstrates the Antitrust Division’s resolve to pursue those who conspire to defraud distressed homeowners and financial institutions,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division.  “The division will continue to hold accountable individuals who subvert the competitive process for their own gains.”

“We are committed to partnering with the Antitrust Division,” said FBI Special Agent in Charge Robert F. Lasky of the Mobile Field Office.  “And we will hold accountable those individuals who profited illegally at the expense of financial institutions and struggling homeowners.”

The charge of conspiracy to commit mail fraud affecting a financial institution carries a maximum penalty of 30 years in prison and a $1 million fine.

Yesterday’s charge stems from an ongoing investigation being conducted by the Antitrust Division’s Washington Criminal II Section and the FBI’s Mobile Field Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in Alabama should call the Antitrust Division at 202-598-4000, or visit www.justice.gov/atr/contact/newcase.htm.

Yesterday’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit www.StopFraud.gov.

FIVE NORTHERN CALIFORNIA REAL ESTATE INVESTORS INDICTED FOR BID

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WASHINGTON — A federal grand jury in San Francisco returned an eight-count indictment against five real estate investors for their role in bid rigging and fraud schemes at foreclosure auctions in Northern California, the Department of Justice announced.

The indictment, filed today in U.S. District Court for the Northern District of California in San Francisco, California, charges Northern California real estate investors Joseph Giraudo, Raymond Grinsell, Kevin Cullinane, James Appenrodt and Abraham Farag with participating in conspiracies to rig bids and schemes to defraud mortgage holders and others.  The indictment alleges that the defendants agreed to stop bidding or to refrain from bidding for properties at public foreclosure auctions in San Mateo County, California, in return for payoffs and concealing the fact that monies were diverted from mortgage holders, homeowners and others to co-schemers.  Additionally, Giraudo, Grinsell and Appenrodt were charged with bid rigging and fraud in San Francisco County, California.  To date, 47 individuals have agreed to plead or have pleaded guilty, as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.

“These defendants corrupted the public foreclosure auctions in San Mateo and San Francisco counties, and they did so to line their pockets with money that rightfully belonged to mortgage holders and others,” said Brent Snyder, Deputy Assistant Attorney for the Antitrust Division’s criminal enforcement program.  “As these charges demonstrate, the Antitrust Division will continue to pursue bidders at foreclosure auctions who violated the Sherman Act and defrauded mortgage holders and others.”

The indictment alleges, among other things, that beginning no later than August 2008 and continuing until January 2011, the defendants conspired to rig bids to obtain numerous properties sold at foreclosure auctions in San Mateo and San Francisco counties, paid others not to bid, accepted payoffs not to bid and, in the process, defrauded mortgage holders, other holders of debt secured by the auctioned properties and, in some cases, the defaulting homeowners.

“These charges demonstrate our continued commitment to investigate and prosecute individuals and organizations responsible for the corruption of the public foreclosure auction process,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office.  “The FBI is committed to work these important cases and remains unwavering in our dedication to bring the members of these illegal conspiracies to justice.”

Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  Each count of mail fraud carries a maximum sentence of 20 years in prison and a $1 million fine.  The government can also seek to forfeit the proceeds earned from participating in the mail fraud schemes.  The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than $1 million.

Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda counties, California.  These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300, or call the FBI tip line at 415-553-7400.

Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 93 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit www.StopFraud.gov.

GEORGIA REAL ESTATE INVESTOR PLEADS GUILTY TO BID RIGGING AND FRAUD AT PUBLIC FORECLOSURE AUCTIONS

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(Brad Geyer: “This is a Georgia housing auction case that is the first instance I have seen where a former Atlanta Field Office legacy case makes reference to the Washington Criminal II Section in a press release.  This is further indication that the Antitrust Division has completed its reorganization and is now approaching full integration.  Achieving full integration is important for agency productivity because it ushers in a greater mix and quantity of investigations and prosecutions.  Attorneys needed to complete their moves between duty stations, new attorneys take time to find mentors and build confidence, and everyone gets established in their new settings with new combinations of stakeholders and managers.  As I have said previously, with strong White House emphasis means housing auction fraud will continue to be an Antitrust Division enforcement priority.  This also means the FBI is fully engaged and this focus is likely to continue through at least the first year of the next administration and new leads will be run down and on-going investigations will continue to be worked hard at least through early 2016.  The question is what the posture will be in opening new investigations in other areas?  Recent indications suggest the pipeline is opening and the threshold has been lowered somewhat in terms of the quantity and quality of evidence that must be established by line attorneys to justify investigative authority.  This has a disproportionate effect on enforcement because when the Antitrust Division is solicitous of new cases outside the Title 15 allegation of first impression, agencies know they have another place to go with marginal cases after a US Attorney’s office declines a case.  This spurs investigations of marginal matters and increases quantity, mix and duration of investigations.  This stimulates investigative activities across the investigative agency platform).  

WASHINGTON — A Georgia real estate investor pleaded guilty today for his role in  conspiracies to rig bids and commit mail fraud at public real estate foreclosure  auctions in Georgia, the Department of Justice announced.

Felony charges were filed on March  25, 2014, in the U.S. District Court for the Northern District of Georgia in Atlanta,  against Mohamed Hanif Omar.  According  to court documents, from at least as early as Sept. 1, 2009, until at least March  7, 2012, Omar conspired  with others not to bid against one another, and instead to designate a winning  bidder to obtain selected properties at public real estate foreclosure auctions  in Gwinnett County, Ga.  Omar was also charged with conspiring to  commit mail fraud by fraudulently acquiring title to selected Gwinnett County  properties sold at public auctions.  Additionally,  he was charged with making and receiving payoffs and diverting money to  co-conspirators that would have gone to mortgage holders and others by holding  second, private auctions open only to members of the conspiracy.  The department said that the selected  properties were then awarded to the conspirators who submitted the highest bids  in the second, private auctions.

“Today’s guilty plea is the fourth in the Antitrust  Division’s ongoing investigation into anticompetitive conduct at public real  estate foreclosure auctions in Georgia,” said Bill Baer, Assistant Attorney  General in charge of the Department of Justice’s Antitrust Division.  “The division remains committed to working  with its law enforcement partners to investigate and prosecute local cartels  that harm distressed homeowners and lenders.”

The  department said that the primary purpose of the conspiracies was to suppress  and restrain competition and to conceal payoffs in order to obtain selected  real estate offered at Gwinnett County public foreclosure auctions at  non-competitive prices.  When real estate  properties are sold at the auctions, the proceeds are used to pay off the  mortgage and other debt attached to the property, with remaining proceeds, if  any, paid to the homeowner.  According to  court documents, the conspirators paid and received money that otherwise would  have gone to pay off the mortgage and other holders of debt secured by the  properties, and, in some cases, the defaulting homeowner.

“Today’s plea should further serve  as an example for those who would consider exploiting the processes in place  regarding public foreclosures,” said J. Britt Johnson, Special Agent in Charge  of the FBI Atlanta Field Office. “The intent of the Sherman Act was to provide  a level and competitive field within commerce and the FBI intends to enforce  these types of violations.”

A violation of the  Sherman Act carries a maximum penalty of 10 years in prison and a $1 million  fine for individuals.  The maximum fine  for a Sherman Act charge may be increased to twice the gain derived from the  crime or twice the loss suffered by the victims of the crime if either amount  is greater than the statutory maximum fine.  A count of conspiracy to commit mail fraud  carries a maximum penalty of 20 years in prison and a fine of $250,000 for  individuals.  The fine may be increased  to twice the gross gain the conspirators derived from the crime or twice the  gross loss caused to the victims of the crime.

The investigation is being conducted by the Antitrust Division’s new Washington Criminal II Section  and the FBI’s Atlanta  Division, with the assistance of the Atlanta Field Office of the Housing and  Urban Development Office of Inspector General and the U.S. Attorney’s Office  for the Northern District of Georgia.  Anyone  with information concerning bid rigging or fraud related to public real estate  foreclosure auctions in Georgia should contact the Antitrust Division at 404-331-7113,  call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, or visit www.justice.gov/atr/contact/newcase.htm.

Today’s charges were brought in  connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an  aggressive, coordinated and proactive effort to investigate and prosecute  financial crimes.  With more than 20  federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it  is the broadest coalition of law enforcement, investigatory and regulatory  agencies ever assembled to combat fraud.  Since its formation, the task force has made  great strides in facilitating increased investigation and prosecution of  financial crimes; enhancing coordination and cooperation among federal, state  and local authorities; addressing discrimination in the lending and financial  markets and conducting outreach to the public, victims, financial institutions  and other organizations.  Over the past  three fiscal years, the Justice Department has filed nearly 10,000 financial  fraud cases against nearly 15,000 defendants, including more than 2,900  mortgage fraud defendants.  For more  information on the task force, please visit www.StopFraud.gov.

Two Northern California Real Estate Investors Charged with Bid Rigging at Public Foreclosure Auctions Investigation Has Yielded 46 Plea Agreements to Date

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Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Tuesday, March 11, 2014
Two Northern California Real Estate Investors Charged with Bid Rigging at Public Foreclosure Auctions Investigation Has Yielded 46 Plea Agreements to Date

Two Northern California real estate investors pleaded guilty for their roles in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

Felony charges were filed on June 30, 2011, in the U.S. District Court for the Northern District of California in Oakland, against Grant Alvernaz, of Pleasant Hill, Calif., and Douglas Moore, of Walnut Creek, Calif.  Alvernaz pleaded guilty to the charges on Sept. 7, 2011.  Moore pleaded guilty to the charges on Aug. 24, 2011.  The charges and the guilty pleas were unsealed yesterday.  Including Alvernaz and Moore, a total of 46 individuals have pleaded guilty or agreed to plead guilty as a result of the department’s ongoing antitrust investigation into bid rigging and fraud at public real estate foreclosure auctions in Northern California.

According to court documents, Alvernaz and Moore conspired with others not to bid against one another, and instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in Contra Costa and Alameda counties, Calif.  Alvernaz and Moore were also charged with conspiring to commit mail fraud by fraudulently acquiring title to selected Contra Costa and Alameda County properties sold at public auctions and making and receiving payoffs and diverting money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.  The private auctions often took place at or near the courthouse steps where the public auctions were held.   Alvernaz and Moore pleaded guilty to participating in the conspiracies in Contra Costa County beginning as early as February 2009 and continuing until in or about December 2010 and in Alameda County from as early as March 2009 and continuing until about November 2010.

“The integrity of real estate foreclosure markets depends on open and honest competition, which the perpetrators of these collusive schemes undermined,” said Assistant Attorney General Bill Baer in charge of the Department of Justice’s Antitrust Division.  “The division will continue to pursue those who illegally enrich themselves at the expense of lenders and financially distressed homeowners.”

The department stated that the primary purpose of the conspiracies was to suppress and restrain competition in order to obtain selected real estate offered at Contra Costa and Alameda County public foreclosure auctions at non-competitive prices.  When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.  According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties and, in some cases, the defaulting homeowner.

“The unsealed court documents narrate the criminal actions taken as part of this real estate bid-rigging conspiracy in northern California,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office.  “The public should consider this an example of how a competitive marketplace can be taken advantage of by those who are shortsighted by greed.”

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million.  A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine.  The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.

The charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, Calif.  These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660, or call the FBI tip line at 415-553-7400.

Today’s cases were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants.

NORTHERN CALIFORNIA REAL ESTATE INVESTOR AGREES TO PLEAD GUILTY TO BID RIGGING AND FRAUD AT PUBLIC FORECLOSURE AUCTIONS

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WASHINGTON — A Northern California real estate investor has agreed to plead guilty  for his role in conspiracies to rig bids and commit mail fraud at public real  estate foreclosure auctions in Northern California, the Department of Justice  announced.

Felony charges were filed today in the U.S. District Court for the  Northern District of California in Oakland against Charles Gonzales, of Alamo, Calif.   Including  Gonzales, a total of 44 individuals have pleaded guilty or agreed to plead  guilty as a result of the department’s ongoing antitrust investigations into  bid rigging and fraud at public real estate foreclosure auctions in Northern  California.

According to court documents, beginning as early as April  2009 until about October 2010, Gonzales conspired with others not to bid  against one another, and instead to designate a winning bidder to obtain  selected properties at public real estate foreclosure auctions in Alameda  County, Calif.  Gonzales was also charged  with conspiring to commit mail fraud by fraudulently acquiring title to  selected Alameda County properties sold at public auctions and making and  receiving payoffs and diverting money to co-conspirators that would have gone  to mortgage holders and others by holding second, private auctions open only to  members of the conspiracy.  The department  said that the selected properties were then awarded to the conspirators who  submitted the highest bids in the second, private auctions.  The private auctions often took place at or  near the courthouse steps where the public auctions were held.

“The Antitrust Division’s ongoing investigation has resulted in charges  against 44 individuals for their roles in schemes that defraud distressed  homeowners and lenders,” said, Bill Baer, Assistant Attorney General in charge  of the Department of Justice’s Antitrust Division.  “The division will continue to work with its  law enforcement partners to vigorously protect competition at the local level.”

The department said that the primary purpose of the  conspiracies was to suppress and restrain competition and to conceal payoffs in  order to obtain selected real estate offered at Alameda County public  foreclosure auctions at non-competitive prices.  When real estate properties are sold at the  auctions, the proceeds are used to pay off the mortgage and other debt attached  to the property, with remaining proceeds, if any, paid to the homeowner.  According to court documents, the conspirators  paid and received money that otherwise would have gone to pay off the mortgage  and other holders of debt secured by the properties, and, in some cases, the  defaulting homeowner.

“The symbolism of holding illegitimate and fraudulent  private auctions near a courthouse is deplorable,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office.  “The justice system will continue to prevail  in this ongoing investigation pursuing bid rigging and fraud at public  foreclosure auctions.”

A violation of the Sherman Act carries a maximum penalty of  10 years in prison and a $1 million fine for individuals.  The maximum fine for the Sherman Act charges  may be increased to twice the gain derived from the crime or twice the loss  suffered by the victim if either amount is greater than $1 million.  A count of conspiracy to commit mail fraud  carries a maximum sentence of 30 years in prison and a $1 million fine.  The government can also seek to forfeit the  proceeds earned from participating in the conspiracy to commit mail fraud.

Today’s charges are the latest filed by the department in  its ongoing investigation into bid rigging and fraud at public real estate  foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties,  Calif.  These investigations are being  conducted by the Antitrust Division’s San Francisco Office and the FBI’s San  Francisco Office.  Anyone with  information concerning bid rigging or fraud related to public real estate  foreclosure auctions should contact the Antitrust Division’s San Francisco  Office at 415-934-5300, or call the FBI tip line at 415-553-7400.

Today’s charges were brought in  connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an  aggressive, coordinated and proactive effort to investigate and prosecute  financial crimes.  With more than 20  federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it  is the broadest coalition of law enforcement, investigatory and regulatory  agencies ever assembled to combat fraud.  Since its formation, the task force has made  great strides in facilitating increased investigation and prosecution of  financial crimes; enhancing coordination and cooperation among federal, state  and local authorities; addressing discrimination in the lending and financial  markets and conducting outreach to the public, victims, financial institutions  and other organizations.  Over the past  three fiscal years, the Justice Department has filed nearly 10,000 financial  fraud cases against nearly 15,000 defendants, including more than 2,900  mortgage fraud defendants.  For more  information on the task force, please visit www.StopFraud.gov.

Georgia Real Estate Investor Pleads Guilty to Bid Rigging and Fraud at Public Real Estate Foreclosure Auctions

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A Georgia real estate investor pleaded guilty today for her role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia, the Department of Justice announced.

Felony charges were filed on Dec. 19, 2013, in the U.S. District Court for the Northern District of Georgia in Atlanta, against Amy James. According to court documents, from as early as Dec. 6, 2005, until at least Jan. 23, 2009, James conspired with others not to bid against one another, but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in DeKalb County, Ga.  James was also charged with a conspiracy to commit mail fraud by fraudulently acquiring title to selected DeKalb County properties sold at public auctions and making and receiving payoffs and diverting money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.

“Today’s guilty plea is the third in the Antitrust Division’s ongoing investigation into anticompetitive behavior at real estate foreclosure auctions in the state of Georgia,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “The Antitrust Division remains committed to holding accountable individuals who conspire to defraud distressed homeowners and lenders in Georgia and elsewhere.”

The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain real estate offered at DeKalb County public foreclosure auctions at non-competitive prices.  When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.  According to court documents, the conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.

“Today’s guilty plea reflects the FBI’s commitment toward enforcement of federal antitrust laws that are designed to provide a level playing field among businesses and individuals as they engage in competition for commerce,” said Ricky Maxwell, Acting Special Agent in Charge of the FBI’s Atlanta Field Office.  “The FBI will continue to work with its various law enforcement partners regarding these enforcement matters and asks that the public contact their nearest FBI field office regarding such unfair and illegal business practices.”

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine.  A count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine of $250,000 for individuals.  The fine may be increased to twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime.

The investigation is being conducted by Antitrust Division attorneys in Atlanta and the FBI’s Atlanta Division, with the assistance of the Atlanta Field Office of the Housing and Urban Development Office of Inspector General and the U.S. Attorney’s Office for the Northern District of Georgia.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in Georgia should contact Antitrust Division prosecutors in Atlanta at 404-331-7113, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258  or visit www.justice.gov/atr/contact/newcase.htm.

Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit  www.StopFraud.gov.

Three Northern California Real Estate Investors Agree To Plead Guilty To Bid Rigging at Housing Foreclosure Auctions: Investigation Has Yielded 43 Plea Agreements to Date WASHINGTON —

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Three Northern California real estate investors have agreed to plead guilty for their roles in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced. Felony charges were filed today in U.S. District Court for the Northern District of California in Oakland against Rudolph Silva of Concord, Calif., Thomas Bishop of Pleasant Hill, Calif., and Leslie Gee of Danville, Calif. Including Silva, Bishop and Gee, a total of 43 individuals have pleaded guilty or agreed to plead guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California. According to court documents, Silva, Bishop and Gee conspired with others, for various lengths of time between January 2008 and January 2011, not to bid against one another, and instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in Contra Costa County, Calif. Silva, Bishop and Gee were also charged with conspiring to use the mail to carry out a scheme to fraudulently acquire title to selected Contra Costa County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held. Additional charges were filed against Gee for his involvement in similar conduct in Alameda County, Calif., from as early as April 2009 until about November 2009. “Today’s plea agreements are the latest step in the Antitrust Division’s efforts to hold accountable investors for their fraudulent and collusive activities at real estate foreclosure auctions,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division will continue to prosecute individuals who participated in illegal conspiracies and harmed distressed homeowners and lenders.” The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Alameda and Contra Costa County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and in some cases, the defaulting homeowner. “The FBI and our partners have an obligation to investigate and pursue those who disrupt a free and fair marketplace,” said FBI Special Agent in Charge David J. Johnson of the San Francisco Field Office. “We will continue to educate the public on the criminality of bid rigging at real estate foreclosure auctions.” A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud. Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, Calif. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660, or call the FBI tip line at 415-553-7400. Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.

TWO NORTHERN CALIFORNIA REAL ESTATE INVESTORS AGREE TO PLEAD GUILTY TO BID RIGGING AT PUBLIC REAL ESTATE FORECLOSURE AUCTIONS

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WASHINGTON — Two Northern California real estate investors have agreed to plead  guilty for their roles in conspiracies to rig bids and commit mail fraud at  public real estate foreclosure auctions in Northern California, the Department  of Justice announced.

Felony charges were filed today in the U.S. District Court for the  Northern District of California, in San Francisco, against Florence Fung of  Sacramento, Calif, and Michael Navone of San Rafael, Calif.  Fung and Navone are  the 39th and 40th individuals to plead guilty or agree to  plead guilty as a result of the department’s ongoing antitrust investigations  into bid rigging and fraud at public real estate foreclosure auctions in  Northern California.

According to court documents, Fung and Navone conspired  with others, for various lengths of time between February 2009 and January  2011, not to bid against one another, but instead to designate a winning bidder  to obtain selected properties at public real estate foreclosure auctions in San  Mateo County.  Fung and Navone  also were charged with conspiring to use the mail to carry out schemes to  fraudulently acquire title to selected properties sold at public auctions, to  make and receive payoffs and to divert money to co-conspirators that would have  gone to mortgage holders and others.  Navone  was also charged with participating in similar conspiracies in San Francisco  County beginning as early as October 2009 until about January 2011.

“Instead of competing at real estate foreclosure auctions, the  conspirators agreed not to bid against one another and determined among themselves  who would submit the winning bid, stifling honest and fair competition,” said Bill  Baer, Assistant Attorney General in charge of the Department of Justice’s  Antitrust Division. “The Antitrust Division and its partners at the FBI  continue to remain committed to holding accountable investors who attempt to  subvert the competitiveness of the bidding process.”

The department said that the primary purpose of the  conspiracies was to suppress and restrain competition and to conceal payoffs in  order to obtain selected real estate offered at San Mateo and San Francisco county  public foreclosure auctions at non-competitive prices.  When real estate properties are sold at these  auctions, the proceeds are used to pay off the mortgage and other debt attached  to the property, with remaining proceeds, if any, paid to the homeowner. According  to court documents, these conspirators paid and received money that otherwise  would have gone to pay off the mortgage and other holders of debt secured by  the properties, and, in some cases, the defaulting homeowner.

“The FBI continues to join the Antitrust Division in  holding criminals accountable for bid rigging and fraudulent practices at  public real estate foreclosure auctions,” said David J. Johnson, FBI Special  Agent in Charge of the San Francisco Field Office.  “Anticompetitive practices disrupt a fair  marketplace and the FBI will investigate these types of crimes.”

A violation of the Sherman Act carries a maximum penalty of  10 years in prison and a $1 million fine for individuals.  The maximum fine for the Sherman Act charges  may be increased to twice the gain derived from the crime or twice the loss  suffered by the victims if either amount is greater than $1 million.  A count of conspiracy to commit mail fraud  carries a maximum sentence of 30 years in prison and a $1 million fine.  The government can also seek to forfeit the  proceeds earned from participating in the conspiracy to commit mail fraud.

Today’s charges are the latest filed by the department in  its ongoing investigation into bid rigging and fraud at public real estate  foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda counties,  Calif.  These investigations are being  conducted by the Antitrust Division’s San Francisco Office and the FBI’s San  Francisco Office.  Anyone with  information concerning bid rigging or fraud related to public real estate  foreclosure auctions should contact the Antitrust Division’s San Francisco Office  at 415-436-6660, visit www.justice.gov/atr/contact/newcase.html or call the FBI tip line at  415-553-7400.

Today’s charges were brought in connection with the  President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an  aggressive, coordinated and proactive effort to investigate and prosecute  financial crimes.  With more than 20  federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it  is the broadest coalition of law enforcement, investigatory and regulatory  agencies ever assembled to combat fraud.  Since its formation, the task force has made  great strides in facilitating increased investigation and prosecution of  financial crimes; enhancing coordination and cooperation among federal, state  and local authorities; addressing discrimination in the lending and financial  markets and conducting outreach to the public, victims, financial institutions  and other organizations.  Over the past  three fiscal years, the Justice Department has filed nearly 10,000 financial  fraud cases against nearly 15,000 defendants, including more than 2,900  mortgage fraud defendants.  For more  information on the task force, please visit www.StopFraud.gov.

SIX INVESTORS INDICTED FOR THEIR ROLES IN BID RIGGING SCHEME AT MUNICIPAL TAX LIEN AUCTIONS IN NEW JERSEY

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Investigation Has Yielded 20 Charges to Date

WASHINGTON — A federal grand jury in Newark,  N.J., returned an indictment against six investors for their roles in a  conspiracy to rig bids at auctions conducted by New Jersey municipalities for  the sale of tax liens, the Department of Justice announced.

The indictment, filed today in U.S.  District Court for the District of New Jersey in Newark, charges four  individuals, Joseph Wolfson, Gregg Gehring, James Jeffers Jr. and Robert Jeffrey, and two entities, Betty Simon Trustee LLC and Richard Simon Trustee, with participating in a conspiracy to rig bids at tax lien auctions in New  Jersey.  According to the indictment, from at least as early as 1998 and continuing until as late as February 2009,  the investors participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain  bidders which liens each would bid on.  The  indictment alleges that the investors proceeded to submit bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.

Joseph Wolfson, of Margate, N.J., was  a part-owner of two entities that invested in municipal tax liens, Betty Simon  Trustee and Richard Simon Trustee, both of Northfield, N.J.  Gregg Gehring, of Newton, N.J., was employed  by a major tax lien investment company as a vice president.  James Jeffers Jr., of Burlington, N.J., was a  bidder for Crusader Servicing Corp., which pleaded guilty to its role in the  conspiracy in September 2012, and also a bidder for Crusader’s successor  corporation. Robert Jeffrey, of  Bradenton, Fla., was a bidder for both Crusader and its successor corporation.

“The individuals and entities  charged today demonstrated a blatant disregard for the competitive process by  allocating the purchase of certain municipal tax liens by, from time to time,  flipping a coin, drawing numbers out of a hat or drawing from a deck of cards,”  said Leslie C. Overton, Deputy Assistant Attorney General for the Antitrust  Division.  “The Antitrust Division  remains committed to prosecuting those who thwart the competitive bidding  process.”

The department said that the  primary purpose of the conspiracy was to suppress and restrain competition in  order to obtain selected municipal tax liens offered at public auctions at  non-competitive interest rates.  When the  owner of real property fails to pay taxes on that property, the municipality in  which the property is located may attach a lien for the amount of the unpaid  taxes.  If the taxes remain unpaid after  a waiting period, the lien may be sold at auction.  State law requires that investors bid on the interest  rate delinquent property owners will pay upon redemption.  By law, the bid opens at 18 percent interest  and, through a competitive bidding process, can be driven down to zero percent.   If a lien remains unpaid after a certain  period of time, the investor who purchased the lien may begin foreclosure  proceedings against the property to which the lien is attached.  Since the conspiracy permitted the  conspirators to purchase tax liens with limited competition, each conspirator  was able to obtain liens which earned a higher interest rate.  Property owners were therefore made to pay  higher interest on their tax debts than they would have paid had their liens  been purchased in open and honest competition, the department said.

The indictment alleges, among other  things, that from at least as early as 1998 and continuing until as late as  February 2009, prior to the commencement of certain tax lien auctions in New  Jersey, the investors and their co-conspirators agreed not to compete for the  purchase of certain municipal tax liens.

A violation of the Sherman Act  carries a maximum penalty of 10 years in prison and a $1 million fine for  individuals.  The maximum fine for a  Sherman Act violation may be increased to twice the gain derived from the crime  or twice the loss suffered by the victim if either amount is greater than the  $1 million statutory maximum.

Including today’s charges, 20  individuals and entities have been charged as part of an ongoing investigation  into bid rigging or fraud related to municipal tax lien auctions in New Jersey.   To date, 11 individuals – Isadore H.  May, Richard J. Pisciotta Jr., William A. Collins, Robert W. Stein, David M.  Farber, Robert E. Rothman, Stephen E. Hruby, David Butler, Norman T. Remick,  Robert U. Del Vecchio Sr., and Michael Mastellone – and three companies, DSBD  LLC, Crusader Servicing Corp., and Mercer S.M.E. Inc., have pleaded guilty aspart of this investigation.

Today’s charge is part of efforts  underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF)  which was created in November  2009 to wage an aggressive, coordinated and proactive effort to investigate and  prosecute financial crimes.  With more  than 20 federal agencies, 94 U.S. attorneys’ offices and state and local  partners, it’s the broadest coalition of law enforcement, investigatory and  regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made  great strides in facilitating increased investigation and prosecution of  financial crimes; enhancing coordination and cooperation among federal, state  and local authorities; addressing discrimination in the lending and financial  markets; and conducting outreach to the public, victims, financial institutions  and other organizations.  Over the past  three fiscal years, the Justice Department has filed more than 10,000 financial  fraud cases against nearly 15,000 defendants, including more than 2,700  mortgage fraud defendants.  For more information on the task force, visit www.stopfraud.gov.

This ongoing investigation is being conducted by the Antitrust  Division’s New York Field Office and the FBI’s Atlantic City, N.J., office.  Anyone with information concerning bid rigging  or fraud related to municipal tax lien auctions should contact the  Antitrust Division’s New York Field Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm  or contact the Atlantic City Resident Agency of the FBI at 609-677-6400.