Northern California Real Estate Investor Indicted for Bid-Rigging and Fraud Conspiracies at Public Foreclosure Auctions
A federal grand jury in San Francisco returned an indictment against a Northern California real estate investor for his role in bid-rigging and fraud conspiracies at public foreclosure auctions in Northern California, the Department of Justice announced today.
A two-count indictment has been filed in the U.S. District Court of the Northern District of California in Oakland, charging Ramin Rad “Ray” Yeganeh of San Mateo, California, with participating in conspiracies to rig bids and defraud mortgage holders and others in Alameda County.
“This defendant conspired to rig bids at home mortgage foreclosure auctions in Alameda County,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “Lenders and those who lost their homes to foreclosure are entitled to the proceeds of a competitive auction, and they did not get that here. Whether a conspiracy is local, national or international in scope, the division will investigate and prosecute those who conspire rather than compete.”
To date, 54 individuals have pleaded guilty to criminal charges as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public foreclosure auctions in Northern California. In addition, 21 real estate investors have been charged in six multi-count indictments for their roles in bid-rigging and fraud schemes at foreclosure auctions in Alameda, Contra Costa, San Mateo and San Francisco counties in California.
The indictment alleges, among other things, that as early as September 2008 and continuing until about January 2011, Yeganeh conspired with others not to bid against one another and instead designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County. Yeganeh was also charged with conspiring to use the mail to carry out a scheme to fraudulently acquire title to selected Alameda County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have otherwise gone to mortgage holders and other beneficiaries by holding second, private auctions open only to members of the conspiracy. Selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held.
“This is another example of justice being served in preserving the fairness of public real estate foreclosure auctions as well as the FBI’s commitment in investigating those who take advantage of a competitive marketplace,” said Special Agent in Charge David J. Johnson of the FBI’s San Francisco Field Office. “The FBI will continue to aggressively investigate real estate-related frauds and other violations of federal law which victimize distressed homeowners and financial institutions through the exploitation of the housing crisis.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 20 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from the scheme.
Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300 or call the FBI tip line at 415-553-7400.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.