Indictment Returned for Foreclosure Auction Rigging

Recently, a federal grand jury in West Palm Beach indicted three investors for conspiring to rig bids on foreclosures submitted through an online auction portal, according to the Department of Justice (DOJ).

The charges were filed by DOJ’s Antitrust division against Avi Stern, Christopher Grave, and Stuart Hankin, with the conduct alleged to have taken place during January 2012 through June 2015.

“These charges demonstrate that the Antitrust Division will uncover and prosecute collusion by real estate investors, regardless of whether their conduct is carried out in person, or in texts, online chats or through other electronic means,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division.  “The Division will continue to work closely with our law enforcement colleagues to prosecute those responsible for taking money that would otherwise have gone to mortgage holders, Palm Beach County, and in some cases, to the owners of foreclosed homes.”

According to RealtyTrac, as of September 2017, one out of every 1,544 home in Florida is a foreclosure, with the top five counties being Santa Rosa, Hardee, Pasco, Clay, and Marion. In the state Auctions are down 8.4 percent from the month prior and 29.5 percent from the year prior.

“Real estate investors who think they can swindle the system to line their pockets with ill-gotten gains beware,” said Assistant Special Agent in Charge Paul Keenan of the FBI Miami’s Field Office. “The FBI and our law enforcement partners will vigorously investigate such schemes.”

According to the DOJ, the Antitrust Division has prosecuted similar bid rigging in Alabama, Georgia, and North Carolina, resulting in more than 100 guilty please and convictions.

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