Feds Target Bid-Rigging Scams at Foreclosure Auctions
June 4, 2013
Federal investigators are cracking down on foreclosure auction scams, where real estate speculators illegally try to fix the bidding process on properties. The cases mostly center in northern and central California, but bid-rigging schemes have also been discovered in Raleigh, N.C., and Mobile, Ala.
Federal prosecutors have charged 54 people in the past three years for bid-rigging during courthouse auctions for foreclosed properties.
Scammers would appoint one person to bid on a property during an auction so that the person could get the property at a lower price. After the official auction was over, they would conduct a separate auction.
“The conspirators would then divvy up the difference paid at the official auction and the private one,” the Associated Press reports. “The scammers took money that otherwise would have gone to banks selling the foreclosed properties or beleaguered home owners who should have been compensated.”
The U.S. Justice Department has established a special task force to investigate bid-rigging at foreclosure auctions and to "stop those who engage in illegal conduct that thwarts the competitive process, and take advantage of American consumers when they are most vulnerable," says Bill Baer, assistant attorney general and head of the DOJ's antitrust division in Washington, D.C.
Source: “Feds Crack Down on Foreclosure Auction Scams,” the Associated Press (June 1, 2013)
Updated: June 21, 2018