Mississippi Real Estate Investors Plead Guilty to Foreclosure Auction Bid Rigging

Mississippi Real Estate Investors Plead Guilty to Foreclosure Auction Bid Rigging

The Department of Justice (DOJ) announced earlier this week that a group of Mississippi real estate investors plead guilty for their roles in a conspiracy to rig bids at public real estate foreclosure auctions.

Foreclosure auction bid rigging is a form of fraud that takes place at a public auction in which a group of conspirators colludes with one another as bidders on properties. The goal is to restrain competition at the auction by rigging bids to obtain selected properties.

According to court documents, Kevin Moore, Chad Nichols, and Terry Tolar conspired to rig bids from approximately January 12, 2012, through at least April 19, 2017. The defendants acted as a winning bidder to obtain selected properties at public real estate foreclosure auctions in the Southern District of Mississippi.

The Department said that the primary purpose of the conspiracy was to suppress and restrain competition in order to obtain selected real estate offered at public foreclosure auctions at non-competitive prices. The defendants made and received payoffs in exchange for their agreement not to bid.

Foreclosure bid rigging is a violation of the Sherman Act which carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine.

Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division had said:

“Today’s guilty pleas send a strong signal that the Division will prosecute and hold accountable those who conspire to corrupt the competitive process and harm the American consumer. We extend our thanks to our law enforcement partners, with whom we will continue to investigate bid-rigging crimes in Mississippi—and throughout the United States.”

“Individuals who harm homeowners and defraud companies by cheating our foreclosure system to enrich themselves will face swift and certain criminal prosecution in Mississippi,” said United States Attorney D. Michael Hurst, Jr. for the Southern District of Mississippi. “I applaud the FBI and the Antitrust Division for their tenacity and perseverance in pursuing these criminal actions and shutting this illegal scheme down.”

“Violations of the Sherman Act not only impact America’s financial institutions and distressed homeowners but also damage our free market society as a whole,” said Special Agent in Charge Christopher Freeze of the FBI in Mississippi. “We hope that others participating in this type of corruption understand that the FBI and Department of Justice will continue to protect Americans from price fixing and bid rigging that harm our economy.”

SOURCE: DOJ

Former Newspaper Publisher, Mortgage Broker, Mortgage Lender and Real Estate Agent Convicted in $20 Million Mortgage Fraud Scheme

Former Newspaper Publisher, Mortgage Broker, Mortgage Lender and Real Estate Agent Convicted in $20 Million Mortgage Fraud Scheme

A federal jury convicted a former Miami newspaper publisher, mortgage broker, mortgage lender and real estate agent after a three-week trial for leading a $20 million mortgage fraud scheme.

Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, and Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement. (more…)

Former New York Mortgage Broker Pleads Guilty In Mortgage Fraud Conspiracy

Former New York Mortgage Broker Pleads Guilty In Mortgage Fraud Conspiracy

A former New York mortgage broker pleaded guilty this past week for his alleged involvement in a mortgage fraud scheme involving several homes in the Bronx area.

According to the United States Department of Justice (USDOJ), Greggor Gibbons, 51, of Pleasantville, N.Y., pleaded guilty to conspiracy to commit wire fraud affecting a financial institution before Chief U.S. District Judge Frank P. Geraci, Jr. The announcement was made by acting U.S. Attorney James P. Kennedy Jr. (more…)

California Man Sentenced to Over 7 Years in Prison for Mortgage Fraud Scheme

California Man Sentenced to Over 7 Years in Prison for Mortgage Fraud Scheme

The United States Department of Justice (USDOJ) announced this past week that a former California loan officer was sentenced to 7 years in prison for his involvement in two mortgage fraud schemes and one tax fraud scheme.

Sergey Shchirskiy, 41, of Sacramento, pleaded guilty to one count of wire fraud in each of the two mortgage fraud cases, as well as one count of conspiracy to defraud the United States and one count of aggravated identity theft in the third tax fraud case. He was sentenced by U.S. District Judge Troy L. Nunley.

Shchirskiy operated the first straw buyer scam between April 2007 and November 2007. He worked with other co-conspirators who committed mortgage fraud by using straw buyers and fake documents to obtain Home Equity Lines of Credit on the properties. Shchirskiy role as the loan processor in the scheme was to create fake documents and statements.

All of the homes ended up in foreclosure, resulting in at least $1.5 million in losses to mortgage lenders.

The second scheme occurred between March 2011 and April 2011 and involved a fraudulent tax fraud scheme (2:14-cr-198). According to the USDOJ, Shchirskiy conspired with others to obtain false tax refunds by submitting fraudulent claims using the identities of various individuals, at least eight of which were stolen.

Shchirskiy claimed Earned Income Tax Credit based on false claims of employment from California’s In-Home Supportive Services program. Shchirskiy and his co-conspirators made approximately 80 attempts to file fraudulent tax returns, attempting to receive $661,286 in fraudulent returns from the Internal Revenue Service. The IRS ultimately issued approximately $88,728 in fraudulent refunds.