A Hillsborough real estate investor pleaded guilty to mail fraud and bid rigging at public auctions of foreclosed properties outside the San Mateo County courthouse in Redwood City, according to the Department of Justice.
Daniel Rosenbledt also committed the fraud at auctions in San Francisco County.
His plea makes Rosenbledt the 36th person to plead guilty or agree to plead guilty as part of the department’s ongoing investigation into fraud and bid rigging at foreclosure auctions throughout Northern California.
Federal prosecutors say, between April 2008 and January 2011, Rosenbledt conspired with others in San Mateo County not to bid against one another but instead designated a winner to obtain chosen properties, according to court documents. His similar crimes in San Francisco County reportedly happened between November 2009 and January 2011.
Doing so kept the winning bid low which in turn, federal prosecutors contend, damaged the real estate market and defrauded those who expected all investors to have a level playing field. Rosenbledt was also charged with using the U.S. Postal Service to fraudulently acquire the title to selected properties sold at auction, to make and receive payoffs and to divert co-conspirators’ money.
The collusion thwarted the competitive process and profited at the expense of lenders and distressed homeowners, Bill Baer, the assistant attorney general in charge of the DOJ’s antitrust division, said in a prepared statement.
“A competitive process benefits those homeowners who are looking for the best possible outcome during a difficult situation,” Baer said.
When property is auctioned, the proceeds pay off the mortgage and debt with any remaining money going to the home owner. Squelching competitive bids limits how much money is available for both.
The DOJ also used the announcement of Rosenbledt’s settlement to warn other investors also acting illegally at foreclosure auctions.
“[W]e will hold you accountable for your actions and bring you to justice,” FBI Special Agent David J. Johnson said in a statement.
Rosenbledt faces up to a decade in federal prison and a $1 million fine for violating the antitrust law known as the Sherman Act and up to 30 years and a similar fine for each count of conspiring to commit mail fraud.
Anyone with information about bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at (415) 436-6660 or visit www.justice.gov/atr/contact/newcase.htm or call the FBI tip line at (415) 553-7400.
(650) 344-5200 ext. 102