Ramin Rad “Ray” Yeganeh, real estate investor, San Mateo, California was indicted by a grand jury in the U.S. District Court of the Northern District of California in Oakland and charged with bid rigging and conspiracy to commit mail fraud in connection with public foreclosure auctions.
The indictment alleges, among other things, that as early as September 2008 and continuing until about January 2011, Yeganeh conspired with others not to bid against one another and instead designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County, California. Yeganeh was also charged with conspiring to use the mail to carry out a scheme to fraudulently acquire title to selected Alameda County, California properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have otherwise gone to mortgage holders and other beneficiaries by holding second, private auctions open only to members of the conspiracy. Selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held.
“This defendant conspired to rig bids at home mortgage foreclosure auctions in Alameda County,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “Lenders and those who lost their homes to foreclosure are entitled to the proceeds of a competitive auction, and they did not get that here. Whether a conspiracy is local, national or international in scope, the division will investigate and prosecute those who conspire rather than compete.”
To date, 54 individuals have pleaded guilty to criminal charges as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public foreclosure auctions in Northern California. In addition, 21 real estate investors have been charged in six multi-count indictments for their roles in bid-rigging and fraud schemes at foreclosure auctions in Alameda, Contra Costa, San Mateo and San Francisco counties in California.
“This is another example of justice being served in preserving the fairness of public real estate foreclosure auctions as well as the FBI’s commitment in investigating those who take advantage of a competitive marketplace,” said Special Agent in Charge David J. Johnson of the FBI’s San Francisco Field Office. “The FBI will continue to aggressively investigate real estate-related frauds and other violations of federal law which victimize distressed homeowners and financial institutions through the exploitation of the housing crisis.”
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 the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 20 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from the scheme.
I had no idea that the penalties were so severe! Ten Million dollars is nothing to shrug at these days. It’s just a little extra incentive to not do something that is already a little questionable. Thanks for this great list of info!