Georgia mystery: How a few people rigged local foreclosure auctions

Another conspirator has pleaded guilty in a DeKalb and Fulton scandal that hasn’t grabbed big headlines: bid-rigging at real estate foreclosure auctions.

Morris Podber pleaded guilty Oct. 8 for his role in the conspiracies. In DeKalb County, from October 2006 to at least August 2011, he and cohorts took part in the scheme that artificially suppressed prices, depriving the homeowners, banks and others from money they might have received, federal prosecutors said.

It worked like this: One or more co-conspirators negotiated payoffs in exchange for agreements not to compete at the public auctions. Then, the group conducted secret, second auctions, open to members only, to bid for title of the properties.

Prosecutors also nailed Podber for mail fraud, saying that he and others in the scheme caused foreclosure deeds and other documents granting titles to the rigged foreclosure properties to be sent or delivered by U.S. mail or interstate carriers.

In Fulton County, Podber took part in a similar scheme that began at least as early as July 2005 and continued until at least August 2010, court documents alleged.

In a news release, Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division said Podber was the ninth real estate investor held accountable for bid rigging at Georgia foreclosure auctions.

How did so few people rig public foreclosure auctions, which often were attended by hundreds of potential buyers? That hasn’t been addressed so far. The auctions are held the first Tuesday of the month on the steps of county courthouses, so the public can bid. The lender’s attorney often conducts the auction.

A crowd attended a 2009 foreclosure auction at the steps of the Fulton courthouse.

A crowd attended a 2009 foreclosure auction at the steps of the Fulton courthouse.

Last month, another conspirator in the scheme, Eric Hulsman, was sentenced to eight months in prison and ordered to pay a $100,000 fine. He typically purchased properties through one of his companies, Jay Holdings or CitiREO Holdings, a sentencing memorandum says.

The others accused so far in the scheme are Seth D. Lynn, Penguin Properties and Amy James. Lynn drew a three-month sentence. James got 12 months of home confinement. Also, David Wedean, Mohamed Hanif Omar, Mohammad Adeel Yoonas and Kevin Shin were accused of rigging bids at Gwinnett foreclosure auctions. Omar was sentenced to four months in prison. Shin and Yoonas are awaiting sentencing in November.
The investigation is ongoing, the FBI said.


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