Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Two California real estate investors plead guilty in bid rigging, mail fraud investigation, (Jul 9, 2015)

By Jeffrey May, J.D.

Two Northern California real estate investors charged in November 2014 with participating in bid rigging conspiracies at public real estate foreclosure auctions have pleaded guilty to three counts of bid rigging and three counts of mail fraud outlined in the ten-count indictment. Real estate investors John Shiells and Miguel de Sanz appeared in the Oakland Federal Courthouse yesterday afternoon to enter their pleas (U.S. v. Shiells, Criminal No. 4:14-cr-00581-JST).

On November 19, 2014, a federal grand jury returned three multi-count indictments against 11 real estate investors for their roles in bid rigging and fraud schemes at foreclosure auctions in Northern California, according to a Department of Justice announcement. In addition to the indictment against Shiells and de Sanz, the other two indictments named Michael Marr, Javier Sanchez, Gregory Casorso, Victor Marr, Alvin Florida Jr., Robert A. Rasheed, John L. Berry III, Refugio Diaz, and Stephan A. Florida with participating in conspiracies to rig bids and schemes to defraud mortgage holders and others. Charges remain pending against these nine other individuals.

The indictments handed down in November alleged that the defendants agreed not to compete at public auctions in return for payoffs and diverted money to themselves and others. All of the defendants were charged with bid rigging and fraud involving foreclosure auctions in California's Alameda County. Marr, Sanchez, Shiells, and de Sanz also were charged with bid rigging and fraud in nearby Contra Costa County. Additionally, Shiells and de Sanz were charged with bid rigging and fraud in San Francisco County. The challenged conduct took place between June 2007 and January 2011.

“These defendants took turns paying others or being paid by others to not bid at foreclosure auctions, all so that the conspirators could buy properties at reduced prices,” said William Baer, Assistant Attorney General in charge of the Justice Department Antitrust Division, in announcing the pleas from Shiells and de Sanz. “The defendants and their co-conspirators corrupted these auctions and deprived lenders and homeowners of auction proceeds that were rightfully theirs.”

The Justice Department's investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda counties is ongoing. Fifty-six individuals have pleaded guilty to criminal charges and charges remain pending against 19 real estate investors as a result of the Northern California foreclosure auction investigations, according to the Justice Department.

News: Antitrust AntitrustDivisionNews