Three Northern California Real Estate Investors Sentenced for Rigging Bids at Public Foreclosure Auctions
After being convicted at trial, three Northern California real estate investors were sentenced today for their role in a conspiracy to rig bids at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Robert Alhashash Rasheed, John Lee Berry III and Refugio Diaz were charged on Nov. 19, 2014, in an indictment returned by a federal grand jury in the Northern District of California. They were convicted of one count each of conspiring to rig bids on Dec. 15, 2016. Today, Rasheed was sentenced to serve fourteen months in prison and serve 1260 hours of community service in lieu of paying a criminal fine, Berry was sentenced to serve ten months in prison and ordered to serve 974 hours of community service in lieu of paying a criminal fine and Diaz was sentenced to serve eight months in prison and ordered to serve 579 hours of community service in lieu of paying a criminal fine.
Between May 2008 and December 2010, the defendants conspired with others not to bid against one another, instead designating a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County. The members of the conspiracy then held second, private auctions to award the properties to members of the conspiracy and determine payoffs for other conspirators who had agreed not to bid against each other at the public auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held. The primary purpose of the conspiracies was to suppress and eliminate competition in order to obtain selected real estate offered at Alameda County public foreclosure auctions at noncompetitive prices. When real estate properties are sold at public auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with the remaining proceeds, if any, paid to the homeowner.
The sentence announced today is a result of the department’s ongoing investigation into bid rigging at public real estate foreclosure auctions in California’s Alameda, Contra Costa, San Francisco and San Mateo counties. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office.
Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300 or call the FBI tip line at 415-553-7400.