Real Estate Investor Admits Rigging Foreclosure Bids

Allison Tussey —  November 10, 2014 — Leave a comment

Chad E. Foster, Theodore, Alabama, a real estate investor, pleaded guilty to his role in a conspiracy to commit mail fraud related to public real estate foreclosure auctions held in southern Alabama.

To date, 10 individuals and two companies have pleaded guilty in connection with an ongoing investigation into bid rigging and fraudulent schemes in the Alabama real estate foreclosure auction industry.

The defendant pleaded guilty to an indictment filed in the U.S. District Court for the Southern District of Alabama, charging him with one count of conspiracy to commit mail fraud affecting a financial institution. According to court documents, Foster knowingly joined a conspiracy with others to, among other things, fraudulently acquire title to selected properties at artificially suppressed prices, to conduct secret, second auctions open only to members of the conspiracy, to make payoffs to and receive payoffs from co-conspirators, and to divert money away from financial institutions, homeowners and others with a legal interest in selected properties.

The Department of Justice announced the guilty plea.

“This guilty plea demonstrates the Antitrust Division’s resolve to pursue those who conspire to defraud distressed homeowners and financial institutions,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “The division will continue to hold accountable individuals who subvert the competitive process for their own gains.”

“We are committed to partnering with the Antitrust Division,” said FBI Special Agent in Charge Robert F. Lasky of the Mobile Field Office. “And we will hold accountable those individuals who profited illegally at the expense of financial institutions and struggling homeowners.”

The charge of conspiracy to commit mail fraud affecting a financial institution carries a maximum penalty of 30 years in prison and a $1 million fine.

The charge stems from an ongoing investigation being conducted by the Antitrust Division’s Washington Criminal II Section and the FBI’s Mobile Field Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama.

Allison Tussey

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