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From Antitrust Law Daily, August 10, 2018

Second guilty plea in investigation into Florida online auction bid rigging

By Matt Pavich, J.D.

The second of three Florida real estate investors charged in November 2017 with conspiring to rig bids submitted through the online property foreclosure auction process in Palm Beach County, Florida, has pleaded guilty for his role in the conspiracy, the Department of Justice announced today. Christopher Graeve entered a guilty plea in the federal district court in West Palm Beach. This is the second guilty plea involving foreclosure auctions in Florida, according to the Justice Department; Stuart Hankin entered a guilty plea in June (U.S. v. Graeve, Case No. 17-cr-80204-KAM).

"Real estate investors who deal in foreclosed properties should be on notice that the Division will not tolerate the subversion of competition in foreclosure auctions," said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. "The Division will continue to prosecute antitrust violations that occur at these auctions, and will hold individuals who engage in this conduct accountable."

In November 2017, the Department of Justice announced the charges against investors Avi Stern, Christopher Graeve, and Stuart Hankin. They were charged with conspiring to rig bids during online auctions in Palm Beach County from January 2012 until June 2015. Proceeds from real estate auctions are used to pay off mortgages and other debt attached to the property, with any remaining proceeds available to the homeowner. The alleged conspiracy artificially lowered the price paid at auction.

The one-count indictment in this case was the first charge filed in Florida as a result of an ongoing investigation by the Antitrust Division and the FBI’s Miami Division. The Antitrust Division has prosecuted similar bid rigging claims in Alabama, California, Georgia, and North Carolina, resulting in more than 100 guilty pleas and convictions.

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