Nine Real Estate Investors Sentenced for Rigging Bids at Mississippi Public Foreclosure Auctions
Nine real estate investors have been sentenced for their role in a conspiracy to rig bids, in violation of the U.S. antitrust laws, at public real estate foreclosure auctions in Southern Mississippi, the Department of Justice announced.
Today, Christopher Vaughan and Jon Gregg Goodhart Jr. were each sentenced to serve four months in prison, with Vaughan receiving a fine of $20,000. Both defendants were ordered to pay restitution. Separately, but as a result of the same investigation, Jason Boykin, Shannon Boykin, Kimberly Foster, Kevin Moore, Chad Nichols, Ivan Spinner, and Terry Tolar were each sentenced to a term of four months in prison on Jan. 17, 2019, and were ordered to pay fines ranging from $20,000 to $48,000 and restitution to victims of their crimes.
At various times between 2009 and 2017, according to court documents, these defendants and others conspired not to bid against each other for properties sold at public real estate foreclosure auctions. Instead, they designated a winning bidder for the property and made and received payoffs in exchange for their agreement not to bid. When properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with any remaining proceeds paid to the homeowner. These conspirators paid and received money in connection with their agreement to suppress competition, which artificially lowered the price paid at auction for such homes.
“Those who subvert the competitive process will be held accountable and violations of the nation’s antitrust laws will be taken seriously,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “The Division has prosecuted more than 100 individuals across the country for bid rigging at real estate foreclosure auctions, and we will continue our efforts to prosecute and deter this conduct.”
“These types of crimes affect all Americans, because when individuals rig bids at auction, it ultimately damages our economy and hurts individuals,” said Christopher Freeze, Special Agent in Charge of the FBI in Mississippi. “We want to send a clear message to those participating in this type of corruption: the FBI and Department of Justice will investigate and prosecute anyone betraying the trust of our country’s economic foundation.”
“There is a simple lesson from these cases – if you rig bids, you will be caught and you will be punished. These are not victimless crimes, as we all suffer when people violate our antitrust laws. I want to thank the FBI and the Antitrust Division for rooting out this corruption in our foreclosure auctions here in Mississippi. We will remain vigilant against these and other types of crimes as we move forward in protecting the public,” said United States Attorney Mike Hurst for the Southern District of Mississippi.
The sentences announced today resulted from an ongoing investigation being conducted by the Antitrust Division’s Washington Criminal II Section and the FBI’s Gulfport Resident Agency, with the assistance of the U.S. Attorney’s Office for the Southern District of Mississippi. Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division prosecutors in the Washington Criminal II Section at 202-598-4000, or visit https://www.justice.gov/atr/report-violations.