California investors plead guilty to foreclosure auction scheme
The Department of Justice cracked down on another group of investors in California, who allegedly rigged bids at foreclosure auctions in the Golden State. The eight participants pleaded guilty to their roles in two separate auction conspiracies and agreed not to bid against each other at foreclosure auctions in Contra Costa County and Alameda County, Calif. The idea behind the scheme was to keep real competition out of the bidding process when the participants wanted to nab certain properties at attractive prices. The conspiracy extended from May 2008 to May 2011. The DOJ filed charges Thursday in the U.S. District Court for the Northern District of California in Oakland against Thomas Franciose of San Francisco; William Freeborn of Alamo, Calif.; Robert Kramer of Oakland; Thomas Legault of Clayton; David Margen of Berkeley; Brian McKinzie of Hayward; Jaime Wong of Dublin; and Jorge Wong of San Leandro. The DOJ said the eight participants pleaded guilty to rigging bids and mail fraud. "While the country faces unprecedented home foreclosure rates, the collusion taking place at these auctions is artificially driving down foreclosed home prices and is lining the pockets of the colluding real estate investors," said Christine Varney, assistant attorney general in charge of the Department of Justice’s Antitrust Division. In March, a group of investors pleaded guilty to a foreclosure auction conspiracy in which they agreed not to bid against each other for desirable assets. That case involved six conspirators who carried out their scheme in San Joaquin, Calif., outside Fresno. Write to: Kerri Panchuk.