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August 22, 2014

Investor Admits to Rigging Bids at Foreclosure Auctions

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Investor Admits to Rigging Bids at Foreclosure Auctions

A real estate investor pleaded guilty last week to rigging bids at public foreclosure auctions in San Mateo and San Francisco counties. Investor Norman Montalvo admits he conspired with others at auction to rig the bids and keep them low, according to court documents. 

Montalvo and others would designate a winning bidder for certain properties and would agree not to compete against one another, federal prosecutors say. The bid rigging allegedly took place from June 2008 through September 2010. 

The investors “illegally restrained competition ... by falsely creating the appearance of unfettered bidding while they were secretly colluding to suppress prices,” said Scott D. Hammond, deputy assistant attorney general of the antitrust division.

Montalvo could face up to 10 years in federal prison and $1 million fine. He also faces charges of mail fraud that could amount to up to 30 years in prison for that charge alone.

Montalvo is the latest of 25 others who have agreed to plead guilty in the Department of Justice’s ongoing investigation of public real estate auctions in Northern California. 

Source: “Investor Pleads Guilty of Bid Rigging at Foreclosure Auctions,” San Mateo County’s Daily Journal (Nov. 2, 2012)