February 10, 2015

February 10, 2015

Real Estate Investors Plead Guilty to Bid Rigging and Fraud at Public Foreclosure Auctions

Late last month, the DOJ issued a press release announcing guilty please of two Georgia men for bid rigging in real estate auctions.  According to court documents, Mohammad Adeel Yoonas and Kevin Shin and several co-conspirators worked together by not bidding against each other and, instead, designating a winning bidder to get properties cheaper.  They also engaged in schemes to divert money that would have gone to mortgage holders.  As stated in the press release:

The department said 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 Gwinnett County public foreclosure auctions at non-competitive prices.  When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage, and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.  According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.

The full Department of Justice press release can be found here.  These cases are being prosecuted under the Sherman Act by the FBI and the DOJ Antitrust Division, with the help of HUD and the local Federal prosecutor’s office for the Northern District of Georgia.