As the foreclosure crisis hit the metro Atlanta area, Eric Hulsman and cohorts figured a way to make money from the misery.
The real estate investor and co-conspirators rigged bids at public foreclosure auctions in Fulton and DeKalb counties. Then, the group held members-only secret, second auctions to decide who would get title to the rigged foreclosure properties.
This week, Hulsman pleaded guilty for his role in the scheme, which went on for about five years, from early 2007 through at least December 2011.
“The defendant conspired with others to keep for themselves money that should have gone to…homeowners and lenders,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division in a news release.
Hulsman’s attorney could not be reached for comment Thursday.
Hulsman is to be sentenced July 30. The maximum sentence for the four charges to which he plead is 10 years in prison, but a plea deal may reduce the sentence to 21 to 27 months.
His is the latest case in an ongoing investigation by federal authorities into rigged foreclosure auctions here, the Justice Department said.
Court records identify his co-conspirators as Seth Lynn, Penguin Properties LLC and Amy James.
In 2013, Lynn and his company, Penguin Properties, pleaded guilty to bid rigging and mail fraud conspiracy at foreclosure auctions in Fulton and DeKalb counties. He also faced up to 10 years in prison. The three-month sentence he drew may be the result of the information he has provided prosecutors. In recent court documents, his attorney notes that "Lynn continues to be available to answer questions the government has had about other individuals. In other words, his prosecution and incarceration has played a significant part in the general deterrence within the real estate foreclosure business." Lynn has been on home confinement, which is due to expire in August.
James pleaded guilty in February 2014 for her role in the foreclosure auction conspiracy in DeKalb County. The conspirators wanted to restrain competition and conceal payoffs to obtain real estate at non-competitive prices, the Department of Justice has said. She was placed on 48-months probation, with the first 12 in home confinement.
Gwinnett foreclosure auctions also have been targeted in bid-rigging schemes.
In April 2014, Mohamed Hanif Omar pleaded guilty to his role. He drew a sentence of four-months in prison. This past January, Mohammad Adeel Yoonas and Kevin Shin also pleaded guilty to bid-rigging at public foreclosure auctions in Gwinnett County. They are scheduled to be sentenced in August.
Those convicted also were fined and ordered to pay restitution.
It’s unclear how many properties may have been involved in the schemes in the three counties. Department of Justice officials did not respond to an interview request on Thursday.
Federal officials have investigated similar schemes in other states. In four states — Georgia, Alabama, North Carolina and California — the Justice Department has charged more than 100 people for conspiring at local real estate auctions, Baer told a congressional committee last week.
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