California Man Pleads Guilty In Foreclosure Auction Bid Rigging Scheme

Posted by Patrick Barnard on November 19, 2013 No Comments
Categories : Mortgage Servicing

Chuokee ‘Joseph’ Bo of Pleasanton, Calif., has agreed to plead guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in northern California, the U.S. Department of Justice (DOJ) recently announced.

Bo is the 38th individual to plead guilty as a result of the department's ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in northern California, according to the DOJ.

The DOJ alleges that Bo conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County, Calif. He was also charged with conspiring to use the mail to carry out a scheme to fraudulently acquire title to selected Alameda County properties sold at public auctions, to make and receive payoffs, and to divert money to co-conspirators that would have otherwise gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy.

The DOJ says the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held.

Bo is charged with participating in the conspiracies beginning as early as August 2009 and continuing until about October 2010.

The primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Alameda County public foreclosure auctions at non-competitive prices, federal prosecutors contend. 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 remaining proceeds, if any, paid to the homeowner.Â

According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties and, in some cases, the defaulting homeowner.

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