Wednesday, November 30, 2016

Two More Real Estate Investors Agree To Plead Guilty In Ongoing Antitrust Probe Into Northern California Foreclosure Sale Bid-Rigging Rackets; Count Now Up To 59 Guilty Pleas, With Indictments Pending On Another 16

From the U.S. Department of Justice (Washington, D.C.):
  • Two Northern California real estate investors have agreed to plead guilty [] for their role in a conspiracy to rig bids at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

    California real estate investors John Michael Galloway and Nicholas Diaz each pleaded guilty to one count of bid rigging in U.S. District Court for the Northern District of California in Oakland [].
    ***
    According to court documents, between June 2008 and January 2011, John Michael Galloway and Nicholas Diaz conspired with others not to bid against one another, instead designating a winning bidder to obtain selected properties at public real estate foreclosure auctions in Contra Costa County. 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.

    The department said that the primary purpose of the conspiracies was to suppress and eliminate competition in order to obtain selected real estate offered at Contra Costa County public foreclosure auctions at noncompetitive 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.

    The guilty pleas entered [] were the result of the department in its ongoing investigation into bid rigging at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, California. To date, 59 individuals have agreed to plead or have pleaded guilty. In addition, indictments are pending against 16 real estate investors. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office, in connection with the president’s Financial Fraud Enforcement Task Force.
    ***
    For more information about the task force, please visit www.StopFraud.gov. 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 415-934-5300 or call the FBI tip line at 415-553-7400.

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