Tag Archives: housing auction

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.

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.