Bobby Threlkeld Jr., Bid Rigging, Alabama 2006

Grimy Times Exclusive: Real Estate Investor's Bid Rigging Scheme Exposed

A Mobile, Ala., real estate investor has agreed to plead guilty for his role in a conspiracy to rig bids and commit mail fraud at public real estate foreclosure auctions in southern Alabama, the government announced.

Bobby Threlkeld Jr. was charged with one count of bid rigging to obtain selected real estate at foreclosure auctions and one count of conspiracy to commit mail fraud in U.S. District Court for the Southern District of Alabama in Mobile.

According to the government, Threlkeld participated in a conspiracy to rig bids by agreeing to refrain from bidding against other investors at public real estate foreclosure auctions in Mobile County and its surrounding areas.

The primary purpose of the conspiracy was to suppress and restrain competition and to make and receive payoffs in order to obtain selected real estate offered at public foreclosure auctions at noncompetitive 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.

“Today’s charges demonstrate that we vigorously pursue and prosecute those who take part in conspiracies to rig bids at real estate foreclosure auctions,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Antitrust Division.

According to the court documents, between May 2001 and December 2006, Threlkeld conspired with others not to bid against one another at public real estate foreclosure auctions in southern Alabama.

After the conspirators’ designated bidder bought a property at the public auctions, the conspirators would generally hold a secret, second auction at which each participant would bid the amount above the public auction price he was willing to pay. The highest bidder at the secret, second auction won the property.

Threlkeld was also charged with conspiring to commit mail fraud by using the U.S. mail in carrying out the conspiracy to defraud financial institutions by paying potential competitors not to bid competitively in the public auctions for foreclosed properties.

Threlkeld was charged with violating the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the statutory maximum.

Threlkeld was also charged with conspiracy to commit mail fraud, which carries a maximum penalty of 20 years in prison and a fine in the 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.

Today’s charges are the latest filed by the government in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in southern Alabama.

Source: https://www.justice.gov/archives/opa/pr/alabama-real-estate-investor-agrees-plead-guilty-conspiracy-rig-bids-purchase-real-estate