The Department of Justice’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions has led to yet another guilty plea.
Kuo Hsuan “Chuck” Chang, of San Francisco, is a real estate investor who admitted to violating the Sherman Act, which prohibits anticompetitive activities. Chang becomes the 37th individual to plead guilty to this kind of violation.
Chang was involved in a conspiracy to not bid against his conspirators during a real estate foreclosure auction, but designate one winning bidder to obtain selected properties in San Francisco County, court documents revealed.
When real estate properties are sold at foreclosure auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining funds, if any, paid to the homeowner. Chang was also charged with conspiring to use the mail to carry out schemes to fraudulently acquire title to selected properties sold at public auctions, to make and receive payoffs, and to divert co-conspirators’ money that would have gone to mortgage holders.
These conspiracies started in October 2009 and continued until November 2010, the Justice Department says.
“Collusion at foreclosure auctions harmed both lenders and distressed homeowners in an already struggling real estate market, and the conspirators must be held accountable,” says Bill Baer, assistant attorney general in charge of the Department of Justice’s Antitrust Division.
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine. A count of conspiracy to commit mail fraud could result in 30 years in prison and a $1 million fine.
