Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Real Estate Investors Charged with Conspiring to Rig Bids, Commit Mail Fraud, (Mar 8, 2013)

By Jeffrey May, J.D.

Two California real estate investors were charged yesterday in the federal district court in Oakland, California, with conspiring to rig bids and commit mail fraud at public real estate foreclosure auctions. Peter McDonough and Michael Renquist agreed to plead guilty to the March 7 charges (U.S. v. Renquist, Case No. 4:13-cr-00143-CW; U.S. v. McDonough, Case No. 4:13-cr-00144-JSW).

The charges against McDonough and Renquist are the latest actions filed by the Department of Justice in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in California's San Francisco, San Mateo, Contra Costa, and Alameda counties. A total of 29 individuals have pleaded guilty or agreed to plead guilty as a result of the investigation.

According to these latest charges, McDonough and Renquist conspired with others not to bid against one another at public real estate foreclosure auctions in Alameda County. After designating a winner bidder for the public auction, the conspirators awardedselected properties to the conspirators who submitted the highest bidsat second private auctions open only to members of the conspiracy.

McDonough and Renquist also were charged with conspiring to use the mail to carry out a scheme to fraudulently acquire title to selected Alameda County properties sold at the public auctions, to make and receive payoffs, and to divert money to co-conspirators that would have gone to mortgage holders and others. In addition, Renquist was charged with two additional counts for his involvement in similar conduct in Contra Costa County.

McDonough was charged with participating in the conspiracy between May 2009 and January 2011. The charges against Renquist detail his role in the conspiracy lasting from November 2008 and January 2011.

“The conspirators suppressed competition and lined their pockets through fraudulent and collusive conduct at the expense of lenders and distressed homeowners,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice Antitrust Division, in a statement announcing the charges. “The Antitrust Division and its law enforcement partners at the FBI will continue to hold accountable individuals who subvert the competitive process at foreclosure auctions around the country.”

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