Eric Hulsman, a Georgia real estate investor, pleaded guilty to his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia.
Felony charges against the defendant were filed on March 27, 2015, in the U.S. District Court of the Northern District of Georgia in Atlanta. According to court documents, from at least as early March 6, 2007, and continuing at least until Dec. 6, 2011, in Fulton County, Georgia, and from at least as early as Jan. 2, 2007, and continuing at least until Jan. 1, 2008, in DeKalb County, Georgia, Hulsman conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions.
Hulsman was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected Fulton and DeKalb properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy. The selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.
The primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Fulton and DeKalb county public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and in some cases, the defaulting homeowner.
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine. A count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.
The Department of Justice announced the guilty plea.
Including Hulsman, eight cases have been filed as a result of the ongoing investigation being conducted by Antitrust Division’s Washington Criminal II Section and the FBI’s Atlanta Division, and the U.S. Attorney’s Office of the Northern District of Georgia.
“Homeowners and lenders in Fulton and DeKalb counties deserved free and fair public real estate foreclosure auctions,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “The defendant conspired with others to keep for themselves money that should have gone to those homeowners and lenders. The division remains committed to rooting out this kind of anticompetitive conduct at foreclosure auctions.”
“Today’s guilty plea of another real estate investor engaged in unfair bidding practices is further evidence of the FBI’s support for the U.S. Department of Justice’s Antitrust Division in ensuring that public foreclosure auctions remain a level playing field for all,” said Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Field Office. “Anyone with information regarding such criminal activities as seen in this case should promptly call their nearest FBI field office.”