A thirty-seventh individual pleaded guilty to participating in a conspiracy to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California.  The guilty plea, entered on Monday, November 4, is yet another victory for the Department of Justice (DOJ) Antitrust Division in its ongoing investigations into a bid rigging and mail fraud conspiracy that took place from 2007 to 2011.

According to the DOJ, the conspirators arranged winning bidders for specific public real estate foreclosure auctions in several California counties.  After acquiring the properties at sub-competitive prices, the conspirators then conducted a second, private auction only open to members of the bid rigging ring.  The difference in the private auction price and public auction price could then be used for payoffs to the conspiracy members.  Had the public auctions been competitive and free from bid rigging, however, that same money taken by the conspiracy would have been used to pay off the mortgage, the debt holders of, and sometimes even the owners of the properties being foreclosed.

This investigation highlights the government’s increased focus on rooting out financial crimes as part of its larger economic recovery plan.  In particular, the interagency Financial Fraud Enforcement Task Force, established by President Obama in 2009, has used the “broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud” in financial markets and those hit hardest by the recession.

Karl Herrmann also contributed to this article.