Chung is the 27th individual to agree to plead guilty for this crime as a result of the Department of Justice’s ongoing antitrust investigations into bid rigging and fraud at public foreclosure auctions in Northern California.
According to court documents, Chung conspired with others to not bid against one another but instead to designate a winning bidder to obtain certain properties that are up for auction in San Francisco and San Mateo counties. The department said the primary purpose of the conspiracy was to suppress and restrain competition to acquire the distressed assets.
When real estate properties are sold at these types of auctions, the proceeds are used to pay off the mortgage and other debt associated to the property, with remaining proceeds, if any, paid to the homeowner.
Additionally, Chung was charged with conspiring to use the mail to carry out schemes to fraudulently acquire title to these housing units, to make and receive payoffs, and to divert the money to his co-conspirators that would have gone to mortgage holders.
The DOJ said this scam began in January 2010 and continued for approximately the entire year.
“The conspirators went to great lengths to suppress competition and prices at these foreclosure auctions,” said Bill Baer, assistant attorney general in charge of the Department of Justice’s Antitrust Division. “The division will continue to vigorously enforce the antitrust laws and to prosecute those who violate them at the expense of distressed homeowners.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine. Furthermore, a count of conspiracy to commit mail fraud could result in 30 years in jail plus a fine of $1 million.