Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Northern California real estate investor indicted for fraud at public foreclosure auctions, (Jun 29, 2015)

By Linda O’Brien, J.D., LL.M.

A real estate investor has been indicted by a federal grand jury in San Francisco for his role in bid-rigging and fraud conspiracies as part of a scheme related to public real estate foreclosure auctions in Northern California, the Department of Justice Antitrust Division (DOJ) announced on June 26. The two-count felony charge, naming Ramin Rad Yeganeh of San Mateo, was filed in the U.S. District Court for Northern District of California in Oakland.

The indictment charges Yeganeh with participating in conspiracies to rig bids and defraud mortgage holders and others in Alameda County. To date, 54 individuals have pleaded guilty to criminal charges as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public foreclosure auctions in Northern California. In addition, 21 real estate investors have been charged in six multi-count indictments for their roles in bid-rigging and fraud schemes at foreclosure auctions in Alameda, Contra Costa, San Mateo, and San Francisco counties in California.

The indictment alleges that, as early as September 2008 and continuing until about January 2011, Yeganeh conspired with others not to bid against one another and instead designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County. Yeganeh was also charged with conspiring to use the mail to carry out a scheme to fraudulently acquire title to selected Alameda County properties sold at public auctions, to make and receive payoffs, and to divert money to co-conspirators that would have otherwise gone to mortgage holders and other beneficiaries by holding second, private auctions open only to members of the conspiracy. 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.

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. A count of conspiracy to commit mail fraud carries a maximum sentence of 20 years in prison and a $1 million fine.

“This defendant conspired to rig bids at home mortgage foreclosure auctions in Alameda County,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “Lenders and those who lost their homes to foreclosure are entitled to the proceeds of a competitive auction, and they did not get that here. Whether a conspiracy is local, national or international in scope, the division will investigate and prosecute those who conspire rather than compete.”

The charges are the latest filed by the Justice 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.

News: Antitrust AntitrustDivisionNews