Entries in Bid rigging (8)
Man pleads gulty in bid-rigging foreclosed property sales
Monday, February 5, 2007 at 05:42PM According to Douglas Lemon’s Plea Agreement, Bacil W. Shirley, who was an auctioneer, shared money that he received from a third-party in exchange for unlawfully reducing the price of United States property after it was sold at a public auction. According to the plea agreement, Shirley gave the money to Douglas Lemon in an effort to appease him because Shirley had promised Douglas Lemon that he would be able to obtain the same Yakima property sold on January 10, 2003. Douglas Lemon accepted and kept $1,000 that Shirley gave him after knowing that the third-party had obtained the property at an unlawfully reduced price. Douglas Lemon intentionally failed to report the $1,000 as taxable income on the 2003 federal individual income tax return he submitted to the Internal Revenue Service on or about April 15, 2004. Douglas Lemon admitted that he failed to report the $1,000 as income in an effort to avoid paying tax on it. Filing a Fraudulent Income Tax Return carries a penalty of up to one year in prison and a $100,000 fine.
In related cases, both Bacil W. Shirley and a bidder, Ronald G. Frank, have pleaded guilty to bribery of a government official. Bacil W. Shirley pleaded guilty in July 2006 and is awaiting sentencing, now set for April 2007. On December 7, 2006, Ronald Frank, who attempted to bribe an U.S. Department of Agriculture employee with a $10,000 payment, was sentenced to three years probation and a $90,000 penalty.
Bacil W. Shirley was an employee of Legal Couriers, Inc., a company hired to read foreclosure sales scripts at public auctions. Shirley admitted in his plea that while performing that job, he rolled back the sales price of two USDA foreclosed properties in January 2003, in return for a kickback from the high bidder. The USDA employee in charge of the Rural Housing Service, Single Family Housing Program, became aware of the rolled back prices of the two homes and confronted Shirley about the discrepancy. In order to keep the USDA employee quiet about the scheme, Shirley offered and gave the USDA employee $3,000. The USDA employee was working with the Inspector General’s Office at the time and the conversation was recorded. Shirley offered the USDA employee more money for future foreclosed property sales by either rolling back the auction price or selling them at a reduced price before the auction.
Ronald G. Frank, admitted in his plea that he contacted the same USDA employee in charge of the Rural Housing Service, Single Family Housing Program, and offered him a $10,000 bribe for each foreclosed house he could buy at a reduced price prior to any auction. In April 2004, Frank paid the USDA employee $10,000 cash, representing one-half of the $20,000 he promised to pay for two properties using this scheme.
The IRS Criminal Investigation and the United States Department of Agriculture, Office of Inspector General joined forces to investigate this case. These cases are being prosecuted by Aine Ahmed, Assistant U.S. Attorney for the Eastern District of Washington.
Investigation finds illegal payoffs that deflated public auction prices
Tuesday, June 21, 2005 at 03:23PM NC Attorney General Roy Cooper will refund hundreds of thousands of dollars to unsuspecting homeowners and creditors now that a scheme to keep public auction prices artificially low has been uncovered and stopped.
In the past week, Cooper’s consumer protection team filed 10 lawsuits against 26 people and firms accusing them of making or accepting payments not to bid on properties being auctioned at courthouses in Wake, Durham, Orange and Johnston counties. Already, defendants in nine of the cases have agreed to repay sellers nearly $800,000 for money lost due to unfair bidding and have agreed to stop the illegal bidding.
“People lost money because bidders conspired to cheat,” said Cooper. “We’ve put a stop to several of these bid riggers and we’re putting people on notice that this practice is dishonest and illegal.”
The complaints allege that the violators conspired to fix prices and rig bids for public auctions of real estate located in Raleigh, Cary, Chapel Hill, Durham, Angier, Apex, Hillsborough and other Triangle area communities. The complaints also allege that 2 other defendants engaged in fraud related to the sale of properties. The conspiracy involved properties that were up for routine auction through county Clerks of Superior Court due to foreclosure.
Cooper is pursuing a lawsuit against the remaining defendants who have not agreed to settle the charges, Robert C. Potts, John R. Allen, Thomas F. Howlett, and B.P. Properties, Inc. (formerly known as Synergy Properties, Inc.) of Orange County.
The complaints allege that Potts conspired to rig bids on auctions for two properties in Hillsborough and Chapel Hill, and that Allen, Howlett and B.P. Properties did so for one property in Hillsborough. Cooper is asking the court to permanently bar the defendants from involvement in any type of bid rigging scheme and order them to pay refunds to property owners and to pay civil penalties.
Former New York Bar Association Vice President pleads guilty in foreclosure sale bribery case
Wednesday, March 23, 2005 at 01:42PM US DOJ Press Release – March 21, 2005
ROSLYNN R. MAUSKOPF, United States Attorney for the Eastern District of New York, and PASQUALE J. D’AMURO, Assistant Director-in-Charge, Federal Bureau of Investigation, New York, today announced that EDWARD REICH, a former vice-president of the New York State Bar Association, and a former president of the Brooklyn Bar Association and chairman of its Judicial Screening Committee, pleaded guilty this morning to conspiracy to accept bribes in his capacity as a court-appointed referee of foreclosure sales at the Brooklyn Courthouse of the New York State Supreme Court.
Read the indictment by clicking here
REICH stated during the plea proceedings that in 2002 and 2003, he accepted five separate cash bribes in his capacity as a court-appointed referee at the sales of three foreclosed properties in public auctions that he conducted on the steps of the Brooklyn Courthouse of the New York State Supreme Court. REICH admitted that in exchange for two $2,000 bribes, he lowered the purchase price of two properties by a total of $65,000 from their winning bids at auction. He also admitted that in exchange for the third payment of $500, he called a law firm representing the bank that held the mortgage on one of the properties and requested an adjournment of the winning bidder’s closing. REICH admitted that in exchange for a fourth payment of $1,000, he permitted purchasers to proceed with their purchases even though they did not pay him the required ten percent deposit. Finally, REICH admitted that in exchange for a fifth payment of $5,000, he called the aforementioned law firm, falsely informed them that he had not received any deposit money, and then attempted to persuade the law firm that they should re-auction the property without pursuing the purchasers in civil litigation.
In addition, REICH admitting filing an affidavit with the United States District Court during pre-trial proceedings that contained materially false information and agreed that his sentence should reflect this obstruction of justice.
REICH is a former director of the New York State Trial Lawyers Association, a former member of the American Bar Association’s House of Delegates, and a former member of the New York State Grievance Committee for the Second and Eleventh Judicial Districts.
“Today’s guilty plea established that no one can hold himself above the law, regardless of his position within the bar,” stated United States Attorney MAUSKOPF. “When Edward Reich was a court-appointed referee, he did not merely sell foreclosed properties, he sold out justice itself. We will continue to vigorously investigate and prosecute courthouse corruption.”
FBI Assistant Director-in-Charge D’AMURO stated, “A court-appointed referee entrusted to act impartially in foreclosure auctions was essentially willing to put his integrity on the auction block to line his pockets. For participants in the court system to have faith in its fundamental fairness, we must — and we will — be vigorous in rooting out corruption.”
REICH’S sentencing has been scheduled for June 24, 2005.
Property investor arrested on Grand Theft charge
Friday, February 7, 2003 at 04:33PM Browards County Sheriff’s Office Press Release - February 2, 2003
A property investor was arrested today on a Grand Theft charge after investigators determined that he bribed a Clerk of the Courts employee in order to shortchange a property owner in a real estate transaction.
The unlawful act occurred on April 1, 2002, at the Broward County Courthouse. The suspect, Richard Meyer, who makes his living as a property investor, attended a forfeiture sale run by the Clerk of Courts. During the sale in the courthouse lobby, Meyer successfully bid $90,500 on a foreclosed property in
After learning of the scheme to cheat the property owner out of $15,000, Clerk Howard Forman asked the Broward Sheriff’s Office to thoroughly examine the incident. BSO Strategic Investigations detectives worked with the Clerk’s staff to investigate, ultimately establishing that Meyer had committed Grand Theft. The findings were reviewed by the State Attorney’s Office and a capias was issued for his arrest.
As a result of the investigation, Howard Forman has revised procedures, restricted access to the bid sheets, and requires that a deputy clerk oversee bids and payments. The Clerk’s office continues to cooperate in terms of this investigation and ongoing efforts to improve and maintain integrity within the operation.
Meyer surrendered to BSO detectives this morning at his attorney’s office. He was booked at BSO’s main jail, charged with Grand Theft, held on $1,000 bond.
Former Springfield Attorney Charged with Fraud
Friday, May 3, 2002 at 12:34PM US DOJ Press Release — May 3, 2002
Springfield, IL — Jan Paul Miller, United States Attorney for the Central District of Illinois, announced the indictment today by a federal grand jury of former
The indictment alleges that from 1996 to August 1999, Vincent defrauded clients and Attorney Title Guaranty Fund, Inc., when he converted funds entrusted to him and his title insurance company to complete real estate transactions. The indictment alleges that Vincent used the converted funds to pay for his personal and business expenses. Such expenses included membership in private clubs, a luxury automobile, office parties, liquor, men’s clothing, floral arrangements, jewelry and a $500 monthly payment to a family member.
As part of the scheme, and to conceal it from others, the indictment alleges Vincent repeatedly covered the costs of real estate closings with money that had been entrusted to him and his firm for other purposes and other closings. Further, when his trust accounts were depleted, overdrawn and out of balance, he created false documents and excuses to deceive his employees, clients, Attorney Title Guaranty Fund and others to make them believe the accounts were fully funded.
Further, the indictment alleges that in October 1998, Vincent promised a representative of Attorney Title Guaranty Fund that he would close his title company’s existing trust account and open a new one so that the account could be reconciled and to confirm that funds were used for specific closings as intended. While Vincent opened a new account for his title company, he failed to close the old trust account, and in February 1999, created a false bank statement and submitted it to the treasurer of Attorney Title Guaranty Fund.
The Editor - Ian Shuter
On December 11, 2002 Vincent was convicted on all 8 counts in the indictment. You can read the US DOJ Press Release here
Bid rigger pleads guilty
Monday, October 18, 1999 at 03:46PM This is the 14th individual charged in the Brooklyn County Courthouse bid rigging conspiracy. Thirteen other members of the conspiracy pleaded guilty in June 1999. According to the charges, Wolf participated in a conspiracy to rig bids by secretly agreeing not to bid against other members of the conspiracy at public real estate foreclosure auctions at the Brooklyn County Courthouse at various times between September 1992 and August 1996.
12 Please guilty to foreclosure bid rigging
Monday, June 14, 1999 at 03:34PM US DOJ Press Release — June 14, 1999
WASHINGTON , D.C. — Twelve real estate brokers and speculators pleaded guilty to charges of participating in a conspiracy to rig bids at real estate auctions at the Brooklyn County Courthouse, the Justice Department announced today. JOEL I. KLEIN, Assistant Attorney General in charge of the Antitrust Division, and ZACHARY W. CARTER, United States Attorney for the Eastern District of New York, said that separate one-count felony charges were filed in U.S. District Court in Brooklyn. The individuals included: Guila Feinberg, Mahmood Hussain, Vincent Longobardi, Aron Malik, Shahob Ohabi, Scott Pere, Naziemul Safi, Sol Shapiro, Meyer Unsdorfer, Leonard Wadler, Martin Weinberger and Abraham Weiss.
Additionally, a thirteenth individual, Morris Weinberger, was charged with participating in a conspiracy to rig bids at real estate auctions at the Brooklyn County Courthouse. According to the charges, the individuals participated in a conspiracy to rig bids by secretly agreeing not to bid against each other at public real estate foreclosure auctions at the Brooklyn County Courthouse at various times between October 1990 and November 1996.
The individuals carried out the conspiracy by designating one member of the group to bid the lowest price possible to obtain the property. After the public auction, the conspirators would hold a second auction among themselves where they bid against each other on the foreclosed property at prices higher than the price paid by the designated winning bidder at the public auction. The highest bidder at the private auction would win the property and then make commission payoffs to the other conspirators to compensate them for not bidding at the public auction. The winning bidder at the public auction would then assign his right to purchase the property to the winning bidder at the private auction. The sum of the commission payoffs was the difference between the prices paid at the public and private auctions, and represented money lost to mortgage holders, lienholders, and homeowners.
The conspiracy allowed the individuals to buy auctioned houses at artificially low prices and deprived mortgage holders, lienholders, and homeowners of the full value of the auctioned properties. Over 200 properties, with a combined real estate market value of at least $20 million, were affected by this conspiracy. Last year, 35 individuals were prosecuted and convicted in a similar bid-rigging conspiracy at the Queens County Courthouse. Both the Queens and Brooklyn conspiracies victimized many lower middle-class individuals and families who had lost their homes. These combined prosecutions have resulted in substantial changes to the auction process in Queens and Brooklyn and have restored competition to auctions. Mortgage holders and homeowners are now receiving full and fair value for their properties.
Brooklyn bid rigger pleads guilty
Thursday, October 31, 0099 at 03:43PM This is the 14th individual charged in the Brooklyn County Courthouse bid rigging conspiracy. Thirteen other members of the conspiracy pleaded guilty in June 1999. According to the charges, Wolf participated in a conspiracy to rig bids by secretly agreeing not to bid against other members of the conspiracy at public real estate foreclosure auctions at the Brooklyn County Courthouse at various times between September 1992 and August 1996.