Let me illustrate a picture for you: Let’s say you are a real estate investor. You show up for a foreclosure sale. There are several people present to bid on a specific piece of property. One of those guys winks at you, motions you to come over (in a clandestine sort of way).
The guy whispers to you “I will pay you $500 to walk away not bid on this property.”
Red Flags should be going off to you by now. Unfortunately, the same red flags either did not go off or where intentionally ignored for the 63 or so individuals who were targeted for bid rigging at foreclosure sales by the Department of Justice.
“The Antitrust Division has prosecuted scores of real estate investors who, for their own benefit and profit, conspired to corrupt the bidding process at foreclosure auctions.” – Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division
In today’s market, good deals for real estate investors are getting harder to come by. With distressed property becoming a scarce resource and competition ever increasing, some real estate investors have resorted to less than legal acts to boost their profit.
Investors should know that the Department of Justice as well as State Agencies are cracking down on unfair real estate practices.
Spartan Stadium. This photo has nothing to do with the post, and is only motivated by Spartan Nation’s victory on Saturday (I took this photo at a different game a few weeks ago)
On Friday, the DOJ announced that Jim
Appenrodt pleaded guilty to two counts of bid rigging in U.S. District Court for the Northern District of California in San Francisco.
Investigations Have Yielded 63 Plea Agreements to Date.
In Michigan the record numbers of foreclosed properties since 2008 has provided a market (albeit one that is slowing down) for flipping residential real estate. With this opportunity to profit has also created an opportunity for abuse and fraud. The real estate legal landscape is complex enough, do yourselves a favor – follow the rules.
Questions? Comments?
E-mail: Jeshua@dwlawpc.com
Twitter: @JeshuaTLauka
Purpose Driven General Counsel 