Antitrust Law Daily Wrap Up, TOP STORY: Another California real estate investor agrees to plead guilty in U.S. foreclosure auction probe, (Nov 7, 2013)

By Jeffrey May, J.D.

California real estate broker Chuokee “Joseph” Bo has agreed to plead guilty to charges that he conspired to rig bids and commit mail fraud at public real estate foreclosure auctions in California’s Alameda County, the Justice Department announced today. The charges were filed in the federal district court in Oakland (U.S. v. Bo, Criminal No. CR13-000730).

The charges against Bo 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. Bo is the 38th individual to plead guilty or agree to plead guilty as a result of this probe.

The most recent actions involving questionable bidding practices at Alameda County auctions were announced in April against Irma Galvez of Pacheco and Stan Kahan of Berkeley. Alameda County is located on the east side of San Francisco Bay.

According to the charges against Bo, the defendant participated in the conspiracy from approximately August 2009 until about October 2010. Bo was charged with agreeing with others not to bid against one another, but instead designating a winning bidder to obtain selected properties at the foreclosure auctions. He also was charged with conspiring to use the mail to carry out a scheme to fraudulently acquire title to selected properties sold at the auctions, to make and receive payoffs, and to divert money to co-conspirators that would have otherwise gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy. The selected properties were awarded to the conspirators who submitted the highest bids in the second, private auctions, it was alleged.

In addition to investigations in California, U.S. probes of bidding practices at foreclosure auctions in Alabama, Georgia, Illinois, and North Carolina have netted charges against real estate brokers and investors over the last two years.

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