Antitrust Law Daily Wrap Up, TOP STORY—Four more California real estate investors nabbed in U.S. bid rigging probe, (Jun 27, 2013)

By Jeffrey May, J.D.

Felony charges were filed today in the federal district court in Oakland, California against four real estate investors for conspiring to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California. The four individuals have agreed to plead guilty to the charges set out in the separate two-count felony informations (U.S. v. Stan Kahan, CR13-00412; U.S. v. Wesley Barta, CR13-00413; U.S. v. Irma Galvez, CR 13-00414; U.S. v. Joseph Vesce, CR13-00415).

To date, as a result of the Justice Department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California, 35 individuals, including the latest defendants—Wesley Barta, Joseph Vesce, Irma Galvez, and Stan Kahan—have agreed to plead or have pleaded guilty.

Two of the defendants, Barta of Oakland and Vesce of San Francisco, were charged with conspiring to rig bids at public real estate foreclosure auctions in California's Contra Costa County. They also were charged with conspiring to use the mail to carry out a scheme to fraudulently acquire title to selected Contra Costa County properties sold at public auctions, to make and receive payoffs, and to divert money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy. The challenged conduct took place between June 2008 and January 2011.

The other two defendants, Galvez of Pacheco and Kahan of Berkeley, have agreed to plead guilty to conspiring to rig bids at Alameda County real estate auctions from November 2008 through May 2010. During that same period, these individuals also were involved in a conspiracy to commit mail fraud, according to the charges.

The Department of Justice Antitrust Division alleges that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Alameda and Contra Costa County public foreclosure auctions at non-competitive prices.

“These conspirators manipulated and suppressed the competitive process through their fraudulent and collusive conduct to the detriment of lenders and distressed homeowners,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice Antitrust Division. “The Antitrust Division will continue to pursue those responsible for these illegal activities.”

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