Danville Real Estate Investor One of Two to Plead Guilty to Rigging Foreclosure Auctions

Two real estate investors pleaded guilty in Oakland today to rigging foreclosure auctions throughout the Bay Area between 2007 and 2011, U.S. Department of Justice officials said. John Shiells of Danville and Miguel De Sanz of San Francisco pleaded guilty to three counts each of bid rigging and mail fraud in federal court.

They were indicted last November for conspiring with other investors to limit competition at foreclosure auctions in San Francisco, Alameda and Contra Costa counties. Hundreds of foreclosed properties were purchased this way, according to the Justice Department. Recent federal investigations into bid rigging and fraud at Northern California foreclosure auctions have led to 56 guilty pleas.

There are still charges pending against 19 other investors indicted on similar charges, according to the Justice Department.

“These defendants took turns paying others or being paid by others to not bid at foreclosure auctions, all so that the conspirators could buy properties at reduced prices,” Assistant Attorney General Bill Baer said in a statement. “The defendants and their co-conspirators corrupted these auctions and deprived lenders and homeowners of auction proceeds that were rightfully theirs.”

The collusion lasted for years. According to the Justice Department, Shiells and De Sanz started conspiring to rig auctions in Alameda County in June 2007, in Contra Costa County in July 2008 and in San Francisco in November 2008. They continued this way until early 2011. They each could face a maximum sentence of 90 years in prison.

Anyone with information about bid rigging or fraud at foreclosure auctions has been asked to contact the Justice Department Antitrust Division’s San Francisco Office at (415) 934-5300 or the FBI tip line at (415) 553-7400.

By Bay City News

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