Real estate investor Avi Stern pleaded guilty today in West Palm Beach, in connection with an ongoing investigation into bid rigging at online public foreclosure auctions in Florida, the Department of Justice announced. Stern is the third real estate investor to plead guilty in this investigation.
Felony charges of bid rigging were filed against Stern on November 2, 2017, in the U.S. District Court for the Southern District of Florida. According to court documents, from around January 2012 through around June 2015, Stern conspired with others to rig bids during online foreclosure auctions in Palm Beach County, Florida.
“Bid rigging at foreclosure auctions has produced enormous harm to many vulnerable communities around the country and directly affronts the values of a market economy,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “The Division will continue to prosecute similar antitrust violations, and will hold individuals who engage in such types of conduct accountable.”
“Real estate investors who think they can swindle the system to line their pockets with ill-gotten gains beware,” said George L. Piro, Special Agent in Charge, FBI Miami. “The FBI and our law enforcement partners will vigorously investigate such schemes.”
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 online foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with any remaining proceeds available to the homeowner. According to court documents, the conspiracy artificially lowered the price paid at auction for such homes. In the past several years, the Division and its law enforcement partners have secured convictions of more than 100 individuals for rigging public mortgage foreclosure auctions in six different states, including Florida.
The investigation is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Miami Division – West Palm Beach Resident Agency. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Washington Criminal I Section of the Antitrust Division at 202-307-6694, call the Antitrust Division’s Citizen Complaint Center at 888-647-3258, or visit http://www.justice.gov/atr/report-violations.