Real Estate Investors Plead Guilty In Bay Area Bid-Rigging Scheme
OAKLAND (CBS / AP) — Eight real estate investors have agreed to plead guilty in a bid-rigging scheme to buy foreclosed real estate at public auctions in two San Francisco Bay Area counties, the U.S. Department of Justice said Thursday.
The men were charged with bid-rigging and conspiracy to commit mail fraud as part of a joint investigation by the FBI and the antitrust division of the Justice Department.
Investigators say the men conspired or made payoffs from 2008 through 2011 so they would not bid against each other for properties sold at foreclosure auctions in Alameda and Contra Costa counties. After one bought a property at an artificially low price, they would hold a private auction among themselves to resell it and split the extra money paid by the winning bidder.
“While the country faces unprecedented home foreclosure rates, the collusion taking place at these auctions is artificially driving down foreclosed home prices and is lining the pockets of the colluding real estate investors,” said Christine Varney, assistant attorney general in charge of the antitrust division, in a prepared statement.
The felony charges were filed in U.S. District Court for the Northern District of California, in Oakland. Court records did not list attorneys for the defendants or indicate whether they were in custody; court personnel said the cases were newly filed and they could not provide any information about them.
The men charged were:
— Thomas Franciose, of San Francisco
— William Freeborn, of Alamo
— Robert Kramer, of Oakland
— Thomas Legault, of Clayton
— David Margen, of Berkeley
— Brian McKinzie, of Hayward
— Jaime Wong, of Dublin
— Jorge Wong, of San Leandro
No Justice Department spokesperson could be reached to clarify whether the men were in custody, when they might enter a plea, their ages or other details. An FBI spokeswoman referred questions to the Justice Department.
Investigators said in a prepared statement that the charges were part of an ongoing investigation into collusion by real estate investors in foreclosure sales, both in Northern California and elsewhere.
In March, federal prosecutors said Yama Marifat of Pleasanton had pleaded guilty to conspiring to rig bids at foreclosure auctions in San Joaquin County, one of the areas hardest hit by the housing bust. The scheme described was similar to that cited in the charges filed Thursday.
At the time, investigators said Marifat was the fifth person to plead guilty in connection with the probe, and he faced up to 10 years in prison for bid rigging and 30 years for conspiracy to commit mail fraud, plus fines of as much as $2 million.
It was unclear whether the new case was related to the earlier investigation.
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