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Bid Rigging Scandal Rocks Alabama Real Estate
An Alabama real estate investor has pleaded guilty to conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in southern Alabama, in a case that has sent shockwaves through the state’s real estate community.
David R. Bradley, the defendant, was charged with one count of bid rigging and one count of conspiracy to commit mail fraud in U.S. District Court for the Southern District of Alabama in Mobile, Ala. on June 25, 2012. According to the plea agreement, Bradley has agreed to cooperate with the ongoing investigation.
Bradley is accused of conspiring with others not to bid against one another at public real estate foreclosure auctions in southern Alabama. After a designated bidder bought a property at the public auctions, which typically take place at the county courthouse, the conspirators would generally hold a secret, second auction, at which each participant would bid the amount above the public auction price he or she was willing to pay. The highest bidder at the secret, second auction won the property.
Bradley was also charged with conspiring to use the U.S. mail to carry out a scheme to acquire title to rigged foreclosure properties sold at public auctions at artificially suppressed prices, to make and receive payoffs to co-conspirators and to cause financial institutions, homeowners and others with a legal interest in rigged foreclosure properties to receive less than the competitive price for the properties. Bradley participated in the bid-rigging and mail fraud conspiracies from as early as June 2003 until at least September 2008.
“By first rigging the public auctions, then bidding amongst themselves in secret afterwards, the conspirators illegally profited at the expense of distressed homeowners,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s Criminal Enforcement Program. “This ongoing investigation into real estate foreclosure auctions underscores the division’s commitment to protecting competition in real estate markets around the country.”
FBI Special Agent in Charge of the Mobile FBI Office Stephen E. Richardson reaffirmed his commitment to pursuing these complex economic investigations, stating, “This investigation has sent a strong message to the community at large, and the real estate community specifically, that abuses within the real estate industry will not be tolerated. Fraud related to home mortgage investments can have financial implications both locally and nationally, and the integrity of the system must be vigilantly maintained.”
Bradley’s guilty plea brings the total number of individuals and companies to have pleaded guilty in connection with the investigation to seven. The maximum penalty for a Sherman Act violation is 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine. Each count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.”
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Key Facts
- State: Alabama
- Category: White Collar Crime
- Source: DOJ Press Release ↗
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