California Investor Pleads Guilty to Bid Rigging and Fraud at Foreclosure Auctions

A California real estate investor and three other associate investors recently pleaded guilty to conspiring to rig bids and commit mail fraud at public real estate foreclosure auctions. Anthony B. Joachim of Stockton, California was originally indicted by a federal grand jury on December 7, 2011, but the indictment was superseded in May of 2013 to include an obstruction of justice charge against his investors.

According to court documents, Joachim conspired with others not to bid against one another and to instead designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in San Joaquin County. Joachim was also charged with conspiring to use the mail to carry out a scheme to fraudulently acquire title to selected San Joaquin County 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 others by holding second, private auctions open only to members of the conspiracy.

The U.S. Department of Justice said that the 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. According to Joachim’s plea agreement, he participated in the conspiracies between about April 2009 until about October 2009.

“Today’s plea is the 11th in the Antitrust Division’s ongoing investigation of bid rigging and fraud involving real estate foreclosure auctions in the Eastern District of California,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.

The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at San Joaquin County public foreclosure auctions at non-competitive prices. The guilty plea entered today is the latest in the department’s ongoing federal antitrust investigation of fraud and bidding irregularities in certain real estate auctions in San Joaquin County.

Joachim pleaded guilty to bid rigging, a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine. Joachim also pleaded guilty to conspiracy to commit mail fraud, which carries a maximum sentence of 30 years in prison and a $1 million fine.

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