Wednesday, December 19, 2012

Antitrust Feds Score Two More Guilty Pleas In Probe Into Foreclosure Sale Bid Rigging Rackets

From the U.S. Department of Justice (Washington, D.C.):

  • Two Alabama real estate investors and their company pleaded guilty [] for their roles in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in southern Alabama, the Department of Justice announced.

    Robert M. Brannon, of Laurel, Miss.; his son, Jason R. Brannon, of Mobile, Ala.; and their Mobile-based company, J & R Properties LLC, pleaded guilty [] to an indictment originally returned on June 28, 2012 in the U.S. District Court for the Southern District of Alabama charging each of them with one count of bid rigging and one count of conspiracy to commit mail fraud.

    According to court documents, the Brannons and their company conspired with others not to bid against one another at public real estate foreclosure auctions in southern Alabama. After a designated bidder bought a property at a public auction, which typically takes place at the county courthouse, the conspirators would generally hold a secret, second auction, at which each participant would bid the amount above the public auction price he or she was willing to pay. The highest bidder at the secret, second auction won the property.

    The Brannons and their company were also charged with conspiring to use the U.S. mail to carry out a fraudulent scheme to acquire title to rigged foreclosure properties sold at public auctions at artificially suppressed prices, to make and receive payoffs to co-conspirators, and to cause financial institutions, homeowners and others with a legal interest in rigged foreclosure properties to receive less than the competitive price for the properties. The Brannons and their company are charged with participating in the bid-rigging and mail fraud conspiracies from as early as October 2004 until at least August 2007.

    “The conspirators subverted the competitive bidding process by engaging in a collusive scheme to artificially depress prices at real estate foreclosure auctions and to defraud financial institutions and homeowners out of money and property,” said Renata B. Hesse, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.(1)
For the Justice Department press release, see Two Alabama Real Estate Investors and Their Company Plead Guilty to Conspiracies to Rig Bids and Commit Mail Fraud for the Purchase of Real Estate at Public Foreclosure Auctions (Investigation Has Yielded 10 Guilty Pleas to Date).

(1) Real estate operators and others who have gotten themselves pinched on charges alleging participation in an illegal bid rigging scam at a public auction may wish to consider whether to mount a defense before deciding to 'race to the prosecutor's office' and spill their guts about the racket (and, in the process, throwing their co-conspirators under the bus in an attempt to beat the rap, or at least reduce any anticipated prison sentence). For more, see:

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