North Carolina real estate investor Darren K. Phillips is facing a maximum sentence of 30 years in prison and a $1 million fine after pleading guilty to his role in committing mail fraud related to bid rigging at real estate auctions.
Phillips is the second person to be charged in an ongoing federal antitrust investigation of fraud and bidding irregularities in certain real estate foreclosure auctions since 2010.
Phillips united with a group of real estate speculators to participate in a scheme to defraud institutions, homeowners and other select properties, according to authorities. They would then acquire money and property from financials through false and fraudulent pretenses or representations.
The goal of the conspiracy was the fraudulently acquire titles to foreclosure properties offered through public auctions at suppressed prices in order to make and receive payoffs from co-conspirators and to avert the money away from financial institutions, homeowners and other foreclosure properties.
As a result, mortgage holders received a lower price for the foreclosure property.
“By artificially suppressing auction prices through payoffs and other illegal actions, the conspirators profited at the expense of homeowners and financial institutions,” said Scott D. Hammond, deputy assistant attorney general in charge of the antitrust division’s criminal enforcement program at the Department of Justice.
“The division will continue to work with our law enforcement partners to investigate anti-competitive practices in real estate foreclosure auctions in North Carolina and elsewhere,” he said.
