Another conspirator recently pleaded guilty in a scandal that hasn’t grabbed big headlines: bid-rigging at real estate foreclosure auctions in DeKalb and Fulton counties.
Morris Podber pleaded guilty Oct. 8 for his role in the conspiracies. In DeKalb, from October 2006 to at least August 2011, he and cohorts took part in the scheme that artificially suppressed prices, depriving the homeowners, banks and others from money they might have received, federal prosecutors said.
It worked like this: One or more co-conspirators negotiated payoffs in exchange for agreements not to compete at the public auctions. Then, the group conducted secret, second auctions, open to members only, to bid for title of the properties. They then divided among themselves the difference in the first and second sale prices.
Podber was the ninth real estate investor held accountable for bid rigging at Georgia foreclosure auctions, according to a news release from the Justice Department’s antitrust division.
The cases follow the wave of foreclosures that washed over the state, and metro Atlanta in particular, after the housing bust of 2007-2009. The numbers have since subsided to pre-bust levels.
Prosecutors also nailed Podber for mail fraud, saying that he and others in the scheme caused foreclosure deeds and other documents granting titles to the rigged foreclosure properties to be sent or delivered by U.S. mail or interstate carriers.
In Fulton County, Podber took part in a similar scheme that began at least as early as July 2005 and continued until at least August 2010, court documents alleged.
How a few people were able to rig public foreclosure auctions, which often were attended by hundreds of potential buyers, hasn’t been addressed. The auctions are held the first Tuesday of the month on the steps of county courthouses, so the public can bid. The lender’s attorney often conducts the auction.
Last month, another conspirator in the scheme, Eric Hulsman, was sentenced to eight months in prison and ordered to pay a $100,000 fine. He typically purchased properties through one of his companies, Jay Holdings or CitiREO Holdings, a sentencing memorandum says.
Others accused so far in the scheme are Seth D. Lynn, Penguin Properties and Amy James. Lynn drew a three-month sentence. James got 12 months of home confinement. Also, David Wedean, Mohamed Hanif Omar, Mohammad Adeel Yoonas and Kevin Shin were accused of rigging bids at Gwinnett foreclosure auctions. Omar was sentenced to four months in prison. Shin and Yoonas are awaiting sentencing in November.
The investigation is ongoing, the FBI said.
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