Wednesday, September 09, 2015

Antitrust Feds Reel In Another Real Estate Operator For Role In Foreclosure Sale Bid-Rigging Racket; Count At 11 Convictions In Ongoing Probe Into Corruption At Public Auctions In Alabama

From the U.S. Department of Justice (Washington, D.C.):
  • A southern Alabama business man has pleaded guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in southern Alabama.

    Michael P. Barbour admitted to conspiring to fraudulently acquire title to foreclosed properties at artificially low prices by agreeing with others not to bid against each other at public foreclosure auctions in southern Alabama.

    “Including this defendant, 11 individuals have been convicted for conspiring to corrupt the public foreclosure auction process in Alabama,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “Together with our partners at the FBI, we will continue to obtain justice for the homeowners and banks victimized by these crimes.”

    ***

    According to documents filed with the court, from 2003 until 2010, Barbour conspired with other potential bidders for foreclosed properties to designate one person to bid at certain public foreclosure auctions. Once the designated bidder won the property at the public auction, the conspirators held a secret, second auction open only to members of the conspiracy where they paid each other off. As a result of these crimes, homeowners and banks received less than competitive prices for the properties.

    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 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 in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.

    The investigation into fraud and bid rigging in the Alabama real estate foreclosure industry is being conducted by the Washington Criminal II Section of the Antitrust Division and the FBI’s Mobile Field Office, with the assistance of the U.S. Attorney’s Office of the Southern District of Alabama. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.htm.

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