Antitrust Law Daily Wrap Up, ANTITRUST NEWS: California real estate investor pleads guilty to bid rigging, mail fraud, (Dec 29, 2014)

By Jeffrey May, J.D.

One of five real estate investors indicted earlier this month for engaging in bid rigging and mail fraud related to foreclosure auctions in Northern California has pleaded guilty to the charges. On December 3, a nine-count indictment was filed in the federal district court in Oakland, California, naming Charles Rock, John Michael Galloway, Nicholas Diaz, Glenn Guillory, and Thomas Joyce as participants in the bid rigging and mail fraud schemes. Rock pleaded guilty to the three charges against him on December 24 (U.S. v. Galloway, Case No. 4:14-cr-00607-PJH).

According to the indictment, the five real estate investors agreed not to compete at public foreclosure auctions in California's Contra Costa County and diverted money to themselves and others that should have gone to mortgage holders and other beneficiaries. The alleged conduct took place between June 2008 and January 2011. With respect to Rock, the indictment charged him with one count of conspiracy to rig bids and two counts of mail fraud. Rock was not alleged to have participated in mail fraud conduct outlined in the six other counts of the indictment.

Under the plea agreement, Rock has agreed to cooperate with the government in its ongoing investigation. The government will recommend a downward departure for Rock's sentence. According to the plea agreement, Rock would likely face a jail term of 15 to 21 months and a fine of $4,000 to $40,000 under the U.S. Sentencing Guidelines. The government will recommend that Rock pay restitution of approximately $12,000. The sentence will be determined by the court.

Attorneys: Kelsey C. Linnett for U.S. Department of Justice. Deborah Levine for Charles Rock.

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