Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Real estate investor indicted for conspiracy to commit fraud at public foreclosure auctions, (Mar 20, 2015)

By Linda O’Brien, J.D., LL.M.

A real estate investor has been indicted for his role in a conspiracy to commit mail fraud as part of a scheme related to public real estate foreclosure auctions, the Department of Justice Antitrust Division (DOJ) announced today. The one-count felony charge against Rodney S. Daw of Raleigh, North Carolina was filed on March 18 in the U.S. District Court for Eastern District of North Carolina.

The indictment charges real estate investor Daw with conspiracy to commit mail fraud affecting a financial institution. The department alleged that the scheme defrauded homeowners, financial institutions and others with a legal interest in selected foreclosure properties, for the unlawful purpose of obtaining money and property through fraudulent pretenses, representations or promises.

Daw was charged with conspiring with others to make and receive payoffs from co-conspirators in exchange for agreements not to compete in public auctions and to divert money away from homeowners, financial institutions, and others with a legal interest in selected properties. Several financial institutions allegedly suffered actual monetary losses as a result of the conspiracy. According to the indictment, Daw participated in the mail fraud conspiracy beginning at least as early as December 2002 and continuing until at least April 2005.

To date, two individuals have pleaded guilty in connection with the department’s ongoing investigation into bid rigging and fraudulent schemes in the North Carolina real estate foreclosure auction industry.

The charge of conspiracy to commit mail fraud affecting a financial institution carries a maximum penalty of 30 years in prison and a $1 million fine.

“This action marks the fourth state in which a defendant has been indicted in our ongoing investigation into illegal conduct at public real estate foreclosure auctions,” said Bill Baer, Assistant Attorney General in charge of the department’s Antitrust Division. “We will continue to vigorously pursue those individuals who sought to capitalize on this nation’s financial crisis by seeking personal gain at the expense of homeowners and financial institutions.”

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