Darren K. Phillips, Mail Fraud, North Carolina 2012

Real estate investor Darren K. Phillips has pleaded guilty to participating in a mail fraud scheme at public foreclosure auctions in Raleigh, North Carolina, and surrounding areas.

Phillips, a real estate investor from Greenville, North Carolina, conspired with a group of real estate speculators to participate in a scheme to defraud financial institutions, homeowners, and others with a legal interest in select properties.

The primary purpose of the conspiracy was to fraudulently acquire title to rigged foreclosure properties offered through public auctions at artificially suppressed prices, to make and receive payoffs from co-conspirators, and to divert money away from financial institutions, homeowners, and others with a legal interest in the rigged foreclosure properties.

Phillips is charged with participating in the conspiracy beginning at least as early as February 2001 and continuing until at least May 2004. The conspiracy resulted in mortgage holders, some of which were financial institutions, receiving a lower price for the foreclosure property.

“By artificially suppressing auction prices through payoffs and other illegal actions, the conspirators profited at the expense of homeowners and financial institutions,” said Scott D. Hammond, Deputy Assistant Attorney General in charge of the Antitrust Division’s criminal enforcement program.

Phillips is charged with conspiracy to commit mail fraud affecting a financial institution, which carries a maximum sentence of 30 years in prison and a $1 million fine.

Phillips is the second person to be charged in this investigation, following the guilty plea of Christopher Deans, a real estate speculator from Raleigh, in September 2010.

The investigation is being conducted by the Antitrust Division’s Atlanta Field Office and the FBI’s Atlanta Field Office, with assistance from the U.S. Attorney’s Office for the Eastern District of North Carolina.

Phillips has agreed to cooperate with the department’s ongoing investigation.

The case is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force.

Anticompetitive practices in real estate foreclosure auctions in North Carolina and elsewhere will continue to be investigated by the Antitrust Division, in coordination with law enforcement partners.

Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division’s Atlanta Field Office at 404-331-7100, or visit www.justice.gov/atr/contact/newcase.htm.

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