Download the WordPerfect version
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - -X
UNITED STATES OF AMERICA
I N F O R M A T I O N
Cr. No. 98-799
ALEX YASRABI, also known as (T. 15, U.S.C., § 1;
"Akbar Yasrabi," T. 26, U.S.C., § 7201;
and T. 18, U.S.C., § 3551 et
- - - - - - - - - - - - - - -X Filed: 09/23/98
THE UNITED STATES CHARGES:
At all times relevant to this Information, unless otherwise indicated:
1. The defendant ALEX YASRABI, also known as "Akbar Yasrabi," resided in
Queens, New York. The defendant ALEX YASRABI was a real estate speculator doing
business in Queens, New York. At various times the defendant ALEX YASRABI was an owner
of Spectrum Realty and Borderline Properties. These businesses were located in Queens, New
2. In Queens County, New York, foreclosure proceedings were initiated by
the mortgage holder (generally a bank) suing the property owner for defaulting on the mortgage
loan and seeking to foreclose on the property that secured the loan. When a judgment was
rendered for a mortgage holder, the amount generally included, among other things, the
remaining balance on the loan secured by the mortgage, interest and penalties.
3. Once a mortgage holder obtained a judgment, the judge presiding over the
foreclosure proceeding would appoint a Referee to conduct a sale of the property by public
auction. The Referee was responsible for providing the notice required by New York state law
that there would be a foreclosure auction on the date and time specified in the notice. The
Referee then held the public foreclosure auction. The foreclosure auctions were usually held at
the Queens County Courthouse, located on Sutphin Boulevard in Jamaica, New York.
4. The bidding at a public foreclosure auction typically opened at the
mortgage holder's "upset price." The upset price was sometimes the amount of the judgment
obtained by the mortgage holder against the property owner, but was often less, depending on
market conditions or the condition of the property. The Referee sought the highest price
possible at the public foreclosure auction by soliciting open and competitive bidding from
potential purchasers and selecting the highest bid as the price at which to sell the property.
5. Immediately after the auction, the highest bidder paid a 10% deposit to the
Referee by cashier's or certified check. The Referee and the highest bidder then completed the
"Terms of Sale." The Terms of Sale included, among other things, the property's address, the
date of the auction, the name of the highest bidder, the amount of the winning bid, and the
amount of the deposit paid. The highest bidder needed the Terms of Sale to complete the
settlement of the property transaction (also called "closing"), which usually occurred within 30
days of the auction. Once the closing was completed, the highest bidder took title to the
6. At the closing on a property purchased at a public foreclosure auction, the
Referee was responsible for obtaining the balance due on the property from the successful bidder
or his assignee. The Referee was also then responsible for distributing the proceeds to the
mortgage holder in total or partial satisfaction of the judgment. Any money paid for the
property above the amount owed to the mortgage holder represented a "surplus," which the
Referee would then deposit with the Queens County Clerk. Other lienholders and the foreclosed
property owner could then make a claim on that surplus money.
The Conspiracy's Effect on Interstate Commerce
7. The defendant ALEX YASRABI and his co-conspirators regularly bought
residential properties at foreclosure auctions held at the Queens County Courthouse.
8. Many mortgage holders involved in the foreclosure auctions in Queens
County were either out-of-state lenders or New York lenders with out-of-state mortgage
processing operations. Consequently, in connection with many properties purchased at public
foreclosure auctions by the defendant or his co-conspirators pursuant to the conspiracy charged
in Count One below, money and documents moved across state lines as part of those
transactions. Those business activities were within the flow of, and substantially affected,
interstate trade and commerce.
COUNT ONE - SHERMAN ACT CONSPIRACY
9. Paragraphs one through eight are realleged and incorporated by reference
as though fully set forth herein.
10. In or about and between July 1993 and December 1996, both dates being
approximate and inclusive, the defendant ALEX YASRABI, also known as "Akbar Yasrabi,"
and others entered into and engaged in a combination and conspiracy that illegally restrained
interstate trade and commerce in violation of Section 1 of the Sherman Act. The charged
combination and conspiracy consisted of a continuing agreement, understanding, and concert of
action among the defendant and co-conspirators, the substantial term of which was to suppress
competition by refraining from full competitive bidding at certain public foreclosure auctions
held in Queens County, in the Eastern District of New York.
11. It was part of the conspiracy that the defendant ALEX YASRABI and his
co-conspirators agreed not to bid against each other at public foreclosure auctions at the Queens
County Courthouse. As a result, the conspirators purchased auctioned property at prices lower
than would have resulted from a fully competitive auction, thereby depriving mortgage holders,
lienholders and property owners of the full value of the auctioned property.
12. It was further part of the conspiracy that after the public foreclosure
auction, the defendant ALEX YASRABI and his co-conspirators would hold a second, private
auction, open only to the conspirators and generally conducted by written bid, in which the
conspirators would bid to acquire the foreclosed property at a price higher than the price paid by
the conspirators' designated bidder at the public foreclosure auction.
13. It was further part of the conspiracy that the defendant ALEX YASRABI
and his co-conspirators would award the property to the conspirator with the highest bid at the
private auction. The conspirators would then divide among themselves the difference between
the prices paid at the public foreclosure auction and the private auction.
14. It was further part of the conspiracy that following the private auction,
the conspirator who was the highest bidder at the public foreclosure auction would assign his
right to purchase the property to the conspirator who was the highest bidder at the private
15. It was further part of the conspiracy that the conspirator who submitted
the highest bid during the private auction could thereafter: (1) proceed to close on the property
with the Referee at the price set during the rigged, public auction, or (2) sell his right to close on
the property at the price set during the rigged auction to a third party.
(Title 15, United States Code, Section 1; Title 18 United States Code, Section
3551 et seq.)
COUNT TWO - TAX EVASION
16. On or about April 15, 1994, within the Eastern District of New York,
the defendant ALEX YASRABI, also known as "Akbar Yasrabi," did knowingly and willfully
attempt to evade and defeat a substantial income tax due and owing by him to the United States
of America by preparing and filing with the Director, Internal Revenue Service Center at
Holtsville, New York, a false and fraudulent 1993 U.S. Individual Income Tax Return (Form
1040) on behalf of himself, wherein it was stated that his taxable income was $1,078 whereas, as
ALEX YASRABI then and there well knew and believed, his taxable income for calendar year
1993 was substantially in excess of that amount and upon such additional taxable income a
substantial tax was due and owing to the United States of America.
(Title 26, United States Code, Section 7201; Title 18, United States Code, Section
3551 et seq.)
ZACHARY W. CARTER JOEL I. KLEIN
United States Attorney Assistant Attorney General
RALPH T. GIORDANO
Chief, New York Office
U.S. Department of Justice