A federal grand jury in San Francisco has indicted 11 real estate investors on multiple charges of bid-rigging and fraud schemes at foreclosure auctions in Northern California, U.S. Department of Justice officials said today.
The three indictments, filed late Wednesday in U.S. District Court in Oakland, charge investors Michael Marr, Javier Sanchez, Gregory Casorso, Victor Marr, John Shiells, Miguel De Sanz, Alvin Florida Jr., Robert Rasheed, John Berry, Refugio Diaz, and Stephan Florida with participating in conspiracies to rig bids and defraud mortgage holders and others.
"Collusion at the foreclosure auctions created an unfair playing field where conspirators pocketed illegal payoffs at the expense of lenders and distressed homeowners," said Deputy Assistant Attorney Brent Snyder. "The division will continue to investigate and prosecute local cartels that harm the competitive process."
In one indictment, Michael Marr, Sanchez, Casorso, and Victor Marr are accused of colluding to suppress public auction prices for foreclosed homes beginning as early as June 2008 and continuing until January 2011 in Alameda and Contra Costa counties, according to the complaint.
Representatives from the office would not say whether Michael Marr and Victor Marr are related.
According to the complaint, the men agreed not to compete to purchase selected properties at public auctions, designated who among them would win selected properties and then refrained from bidding on those properties.
Those who refrained from bidding received a payoff, and then the men held second, private auctions, known as "rounds," to determine the payoff amounts and who would walk away with the selected properties, according to the complaint.
Another indictment charged Alvin Florida Jr., Rasheed, Berry, Diaz and Stephan Florida in a similar bid-rigging scheme, which allegedly took place beginning in May 2008 and continued through December 2010 in Alameda County.
The third indictment charged Shiells and De Sanz in the same scheme beginning in June 2007 and continuing until January 2011 in Alameda, Contra Costa and San Francisco counties.
Each bid-rigging charge carries a maximum penalty of 10 years in prison and a $1 million fine. Each count of mail fraud carries a maximum sentence of 20 years in prison and a $1 million fine, according to representatives at the Department of Justice.
The government can also seek to forfeit the proceeds earned from participating in the mail fraud schemes. Officials said the maximum fine for the bid-rigging charges could 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.
To date, prosecutors in the U.S. Attorney's Office have reached plea deals with 47 people who pleaded guilty to criminal charges as a result of the office's ongoing investigations into bid rigging and fraud at public foreclosure auctions in Northern California, federal prosecutors said.
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