Current Status of the Antitrust Division’s Real Estate Foreclosure Auction Bid Rigging Cases and Some Suggestions Moving Forward
Earlier this year, the Division had its first trial in its ongoing real estate foreclosure auction bid rigging investigation. Three defendants, two real estate investors and an auctioneer, were indicted for bid rigging and mail fraud. The trial lasted four weeks. The auctioneer was acquitted. The other two defendants were acquitted of the fraud charges, but convicted of the Sherman Act violation. The jury also convicted one defendant, Andrew Katakis, of obstruction of justice. Katakis was charged with destroying electronic records (emails) related to the conspiracy. The trial judge, however, overturned the obstruction conviction for lack of evidence.
On June 6, 2014, the government filed a notice of appeal from the court’s acquittal order regarding the obstruction count. In view of that appeal, the court ordered, “all proceedings in this action are hereby stayed pending receipt of an order of remand from the Court of Appeals.” The government asked the trial court to lift the stay explaining: “If all proceedings in this Court remain stayed pending resolution of the government’s appeal, Katakis and Parker face a long wait for a ruling on their new trial motions and, depending on those rulings, for a new trial or sentencing Lifting the stay also avoids unnecessary delays in the sentencings of the other defendants in this case, none of whom were charged with obstruction. Some of them pleaded guilty long before trial and have cooperated with the government for years.” Individuals who have pleaded guilty so far, beginning in 2011, are cooperating in the ongoing investigation and the Division has requested successfully that their sentencing be delayed until after their cooperation has been substantially complete. Accordingly, there have been no sentencings yet, and with this recent development, it appears sentencing could be delayed into at least 2015.
The Division to date has charged approximately 60 individuals in its California real estate foreclosure auction cases. (A similar far-reaching real estate auction collusion investigation is taking place in the Atlanta region) …* * * *