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Four Northern California real estate investors have been convicted in federal court for reportedly rigging bids at public foreclosure auctions during the recession.
Following a two-week trial, a federal grand jury in Alameda County convicted Alvin Florida Jr., Robert Alhashash Rasheed, John Lee Berry III, and Refugio Diaz of one count each of conspiring to rig bids at foreclosure auctions between 2008 and 2010.
According to the Department of Justice, evidence at trial showed that the men had conspired with others to rig bids to obtain hundreds of properties sold at foreclosure auctions in Alameda County. The conspirators reportedly designated winning bidders to obtain selected properties at the public auctions and negotiated payoffs amongst themselves in return for not competing. In subsequent private auctions amongst themselves, at or near the courthouse steps where the public auctions were held‒‒a practice the DOJ called “rounds”‒‒ the men awarded the properties to fellow conspirators who submitted the highest bids, the department stated.
According to the indictment filed in November 2014, the men were also accused of “refraining from and stopping bidding for selected properties at public auctions [and] purchasing selected properties at public auctions at artificially suppressed prices.”
The indictment also claimed that “substantial proceeds from the sale of properties purchased by the conspirators pursuant to the bid-rigging conspiracy were transmitted from locations in one state to certain beneficiaries located in other states” and that paperwork related to these deals was “sent by trustees located in one state to certain beneficiaries located in other states, notifying them of the sale of properties in which the beneficiaries held an interest.”
Beneficiaries, the DOJ said, also included companies that operated in interstate commerce. Indictments are pending against several other real estate investors who participated in the conspiracy.
The convictions are the latest charges filed by the DOJ regarding bid rigging at public real estate foreclosure auctions in northern California. Cases in San Francisco, San Mateo, Contra Costa, and Alameda counties are in the works as well. Most recently, two northern California investors pleaded guilty to conspiring to rig foreclosure bids in the Oakland area between 2008 and 2011.
