California Real Estate Investors, Bid Rigging, California 2023

California Real Estate Investors Plead Guilty to Bid Rigging

Eight California real estate investors have agreed to plead guilty for their roles in two separate conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, according to the U.S. Attorney's Office for the Northern District of California.

The defendants, who were charged in a superseding indictment filed in U.S. District Court for the Northern District of California in Oakland, California, include Thomas Franciose of San Francisco, William Freeborn of Alamo, California, Robert Kramer of Oakland, California, Thomas Legault of Clayton, California, David Margen of Berkeley, California, Brian McKinzie of Hayward, California, Jaime Wong of Dublin, California, and Jorge Wong of San Leandro, California.

The charges, which include conspiracy to commit mail fraud and bid rigging, were filed on May 1, 2023. The defendants allegedly participated in a conspiracy to rig bids by agreeing to refrain from bidding against one another at public real estate foreclosure auctions in Contra Costa County and Alameda County, California.

According to the indictment, the conspirators would hold a secret, private auction at which each participant would bid the amount above the public auction price he was willing to pay. The highest bidder at the private auction won the property, and the difference between the public auction price and that at the second auction was the group's illicit profit, which was divided among the conspirators, often in cash.

The indictment alleges that the defendants' actions artificially drove down foreclosed home prices and lined the pockets of the colluding real estate investors. The U.S. Attorney's Office for the Northern District of California is seeking a prison sentence of up to 5 years and a fine of up to $250,000 for each defendant.

The case is being prosecuted by the U.S. Attorney's Office for the Northern District of California and the Antitrust Division of the U.S. Department of Justice. The investigation was conducted by the FBI.

The defendants' pleas are the latest development in the ongoing investigation into bid rigging at public foreclosure auctions in Northern California. The case is a reminder that the U.S. Attorney's Office for the Northern District of California will vigorously pursue these kinds of collusive schemes that eliminate competition from the marketplace.

The defendants are scheduled to appear in court on June 15, 2023 to enter their pleas. The case is being heard by U.S. District Judge Thelton E. Henderson.

Source: https://www.justice.gov/archives/opa/pr/california-real-estate-investors-agree-plead-guilty-bid-rigging-public-foreclosure-auctions