A Northern California real estate investor last week agreed to plead guilty for her role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Danli Liu of Fremont, Calif, became the 25th person to agree to plead guilty in bid rigging schemes in San Francisco, San Mateo, Contra Costa and Alameda counties. Liu participated in the scheme in Alameda County.
Liu conspired with other participants in public foreclosure auctions not to bid against one another. Instead, a designated conspirator would bid for each targeted property. The properties were then awarded to the highest bidder in a private auction held among the conspirators. The private auctions often took place at or near the courthouse steps where the public auctions were held. By paying less than competitive prices, mortgage holders and/or the defaulted homeowner were deprived of funds that were rightfully theirs.
Liu participated in the conspiracy beginning as early as April 2009 and continuing until about March 2010, according to prosecutors.
"Liu and her fellow conspirators secretly conspired to purchase foreclosed real estate at suppressed prices, thereby restraining competition at these foreclosure auctions in Northern California," said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division's criminal enforcement program. "The conspirators' actions harmed lenders and distressed homeowners in an already struggling real estate market, and the division is committed to holding investors accountable for such behavior."
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.