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

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

Investigation Has Resulted in 11 Guilty Pleas to Date

WASHINGTON — An Eastern California real estate  investor pleaded guilty today to conspiring to rig bids and commit mail fraud  at public real estate foreclosure auctions in Eastern California, the  Department of Justice announced.

Anthony B. Joachim of Stockton,  Calif., entered his guilty plea in U.S. District Court for the Eastern District  of California in Sacramento.  Joachim was originally indicted by a federal  grand jury in Sacramento on Dec. 7, 2011, along with three other investors –  Andrew B. Katakis, Donald M. Parker and Wiley C. Chandler – and one auctioneer  – W. Theodore Longley. All five individuals were charged with conspiring with  other unnamed co-conspirators to rig bids and commit mail fraud when purchasing  selected properties at public real estate foreclosure auctions in San Joaquin  County, Calif.  The indictment was superseded on May 8, 2013, to include  an obstruction of justice charge against Katakis.  Chandler pleaded guilty  on Feb. 24, 2012, and trial is scheduled to begin against the remaining  individuals on Jan. 28, 2014.

According  to court documents, Joachim conspired with others not to bid against one  another and to instead designate a winning bidder to obtain selected properties  at public real estate foreclosure auctions in San Joaquin County.  Joachim  was also charged with conspiring to use the mail to carry out a scheme to  fraudulently acquire title to selected San Joaquin County properties sold at  public auctions, to make and receive payoffs and to divert money to  co-conspirators that would have otherwise 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.  According to  Joachim’s plea agreement, he participated in the conspiracies between about  April 2009 until about October 2009.

“Today’s  plea is the 11th in the Antitrust Division’s ongoing investigation  of bid rigging and fraud involving real estate foreclosure auctions in the  Eastern District of California,” said Bill Baer, Assistant Attorney General in  charge of the Department of Justice’s Antitrust Division.  “The division  has uncovered similar schemes across the country and continues to prosecute  those who profit by undermining competition at real estate foreclosure  auctions.”

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 Joaquin 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.

“My office will continue to fight  real estate fraud in all its forms, including bringing to justice those who  would subvert public foreclosure auctions for their own personal gain,” said United States Attorney Benjamin B.  Wagner of the Eastern District of California.

Joachim pleaded guilty to bid  rigging, a violation of the Sherman Act, which carries a maximum penalty of 10  years in prison and a $1 million fine.  The maximum fine may be increased  to twice the gain derived from the crime or twice the loss suffered by the  victims of the crime if either of those amounts is greater than the statutory  maximum fine.  Joachim also pleaded guilty to conspiracy to commit mail  fraud, which carries a maximum sentence of 30 years in prison and a $1 million  fine.                 The guilty plea entered today is  the latest in the department’s ongoing federal antitrust investigation of fraud  and bidding irregularities in certain real estate auctions in San Joaquin  County.  The investigation is being conducted by the Antitrust Division’s  San Francisco office, the U.S. Attorney’s Office for the Eastern District of  California, the FBI’s Sacramento Division and the San Joaquin County District  Attorney’s Office.  Anyone with information concerning bid rigging or  fraud related to real estate foreclosure auctions should contact the Antitrust  Division’s San Francisco office at 415-436-6660, visit,  contact the U.S. Attorney’s Office for the Eastern District of California at  916-554-2700 or contact the FBI’s Sacramento Division at 916-481-9110.

Today’s  action was 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.