California Investigation into Bid Rigging Charges 26th Person

A California real estate investor became the 26th person to plead guilty or agree to plead guilty as a result of antitrust investigations from the Justice Department into bid rigging and fraud.

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The ongoing investigations are focused on real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda counties.

Norman Montalvo of Concord, California was charged with four felonies in San Francisco federal court, the ""Justice Department"":http://www.justice.gov announced Thursday.

Montalvo conspired with others to rig bids by designating a winning bidder and having others not bid for certain properties at foreclosure auctions in San Francisco and San Mateo counties, according to a department release.

Montalvo also conspired to use the mail to carry out a scheme to fraudulently acquire title to selected properties sold at public auctions, to make and receive payoffs, and to divert to co-conspirators money that would have been used to pay mortgage holders.

The department explained the rigged bids were used to obtain certain properties at non-competitive prices, which makes it difficult for mortgage holders to secure enough in proceeds to pay off debt associated with the property.

The department said Montalvo began the schemes with others to rig bids and commit mail fraud as early as June 2008 and continued until about September 2010.

""The real estate investors involved in the conspiracy illegally restrained competition at foreclosure auctions by falsely creating the appearance of unfettered bidding while they were secretly colluding to suppress prices,"" said Scott D. Hammond, deputy assistant attorney general of the antitrust division, in a release. ""The Antitrust Division remains committed to holding accountable those involved in anticompetitive acts that harm lenders and distressed homeowners.""

According to the Justice Department, those found guilty of violating the Sherman Antitrust Act face a maximum penalty of 10 years in prison, and a count of conspiracy to commit mail fraud holds a maximum sentence of 30 years in prison.