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From Antitrust Law Daily, November 16, 2016

California real estate investors plead guilty to bid rigging

By Jeffrey May, J.D.

Two real estate investors charged in 2014 for their roles in bid rigging and fraud at foreclosure auctions in Northern California each pleaded guilty today to one count of bid rigging. John Michael Galloway and Nicholas Diaz were named along with three other investors in a nine-count indictment filed in the federal district court in Oakland. Details of the plea agreements were not announced by the Department of Justice Antitrust Division (U.S. v. Galloway, Case No. 4:14-cr-00607-PJH).

The five real estate investors were charged with agreeing not to compete at public foreclosure auctions in California’s Contra Costa County and diverting money to themselves and others that should have gone to mortgage holders and other beneficiaries. The alleged conduct took place between June 2008 and January 2011. Charles Rock, Glenn Guillory, and Thomas Joyce were also identified as participants in the scheme.

Rock pleaded guilty to the three charges against him shortly after the indictment was filed. With respect to Rock, the indictment charged him with one count of conspiracy to rig bids and two counts of mail fraud. Rock was not alleged to have participated in mail fraud conduct outlined in the six other counts of the indictment.

Ongoing investigation. In announcing the latest development in the ongoing investigation into bid rigging at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, the Justice Department said that the probe has yielded 59 plea agreements to date. In addition, indictments are pending against 16 real estate investors.

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