Alabama Real Estate Investor Pleads Guilty To Conspiracies To Rig Bids

(Newsroom America) -- An Alabama real estate investor has pleaded guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in southern Alabama.

Charges were filed on June 25, 2012, in the U.S. District Court for the Southern District of Alabama in Mobile, Alabama, against David R. Bradley. Bradley was charged with one count of bid rigging and one count of conspiracy to commit mail fraud. According to the plea agreement, Bradley has agreed to cooperate with the department’s ongoing investigation.

According to court documents, Bradley conspired with others not to bid against one another at public real estate foreclosure auctions in southern Alabama. After a designated bidder bought a property at the public auctions, which typically take place at the county courthouse, the conspirators would generally hold a secret, second auction, at which each participant would bid the amount above the public auction price he or she was willing to pay. The highest bidder at the secret, second auction won the property.

Bradley was also charged with conspiring to use the U.S. mail to carry out a scheme to acquire title to rigged foreclosure properties sold at public auctions at artificially suppressed prices; to make and receive payoffs to co-conspirators; and to cause financial institutions, homeowners, and others with a legal interest in rigged foreclosure properties to receive less than the competitive price for the properties.

Bradley participated in the bid rigging and mail fraud conspiracies from as early as June 2003 until at least September 2008.

“By first rigging the public auctions, then bidding amongst themselves in secret afterwards, the conspirators illegally profited at the expense of distressed homeowners,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s Criminal Enforcement Program. “This ongoing investigation into real estate foreclosure auctions underscores the division’s commitment to protecting competition in real estate markets around the country.”

Six individuals—Harold H. Buchman; Allen K. French; Bobby Threlkeld, Jr.; Steven J. Cox; Lawrence B. Stacy; and Bradley—and one company—M & B Builders LLC— have so far pleaded guilty in the U.S. District Court for the Southern District of Alabama in connection with the investigation.

Additionally, on June 28, 2012, real estate investors Robert M. Brannon and Jason R. Brannon, and their company, J & R Properties LLC, were indicted with participating in bid rigging and conspiracy to commit mail fraud at public real estate auctions in southern Alabama.

Each violation of the Sherman Act 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.

Each count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.