This is the second installment in our coverage of the DOJ's recent criminal cartel enforcement actions. Over the last six months, more than fifty individuals have pleaded guilty as a result of the DOJ's antitrust investigations into real estate bid rigging. The DOJ has pursued these investigations in the Northern District of California, the Northern District of Georgia, and the Eastern District of North Carolina.
The Northern District of California
The bulk of the DOJ's investigation has taken place in the Northern District of California. To date, 55 real investors have pleaded guilty and five investors have been indicted in connection with charges related to bid rigging and fraud at public real estate auctions. The DOJ generally alleged that the individuals that participated in these schemes rigged bids at public foreclosure auctions, negotiated payments not to compete, and then held second, private auctions.
The post-November 2014 charging instruments are available here:
● Marr
● Florida
● Shiells
● Wan
● Lippman
● Yeganeh
● Rock
The Northern District of Georgia
In January 2015, two real estate investors pleaded guilty in the Northern District of Georgia for conspiring to rig bids and commit mail fraud at public real estate auctions. The DOJ alleged that the defendants conspired with others to award properties at public real estate foreclosure auctions to designated winning bidders. The property was later re-sold at private auctions. According to the DOJ, by rigging the bids, the defendants received money that could have otherwise paid off the mortgage and debt holders, possibly including the defaulting homeowner.
The charging instruments are available here:
● Yoonas
● Shin
The Eastern District of North Carolina
In March 2015, a federal grand jury in the Eastern District of North Carolina indicted a real estate investor for conspiring to commit mail fraud. This defendant was the second to plead guilty to bid rigging and fraudulent schemes in North Carolina.
The indictment is available here: Daw.
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