5 Real Estate Investors Indicted For Fraud, Bid Rigging At East Bay Foreclosure Auctions
SAN FRANCISCO (CBS SF) -- Five real estate investors were indicted Wednesday on nine counts of fraud and illegally rigging bids at foreclosure auctions in Contra Costa County, officials at the Department of Justice said.
The indictment charges real estate investors John Michael Galloway, Nicholas Diaz, Glenn Guillory, Thomas Joyce, and Charles Rock with participating in a conspiracy to defraud mortgage holders and others by rigging bids at foreclosure auctions.
The indictment alleges that from as early as June 2008 through January 2011, the defendants conspired to not compete at public foreclosure auctions in Contra Costa County and then gave each other payouts for refraining from bidding on certain properties.
They held second, private auctions known as "rounds," and concealed those rounds and payoffs, defrauding mortgage holders and other beneficiaries, the indictment alleges.
Each violation of bid-rigging carries a maximum penalty of 10 years in prison and a $1 million fine for the individuals. Each count of mail fraud carries a maximum penalty of 20 years in prison and a $1 million fine, according to the U.S. Attorney's Office.
To date, 50 people have pleaded guilty or agreed to plead guilty to criminal charges of bid rigging and fraud at public foreclosure auctions in Northern California, officials from the U.S. Attorney's Office said.
An additional 21 real estate investors have been charged in five multi-count indictments for their roles in bid rigging and fraud schemes at foreclosure auctions in Alameda, Contra Costa and San Francisco counties.
Deputy Assistant Attorney General Brent Snyder said the Antitrust Division's criminal enforcement program would continue to cooperate with law enforcement to convict people who "undermine the competitive market for foreclosed properties."
"Public auctions are meant for the public, not for an elite group conspiring together for their own profit," Snyder said in a statement.
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