Mississippi real estate investors plead guilty to scheme to rig public foreclosure auctions
More Gulf Coast real estate investors have pleaded guilty to a scheme to rig bids at foreclosure auctions.
Kevin Moore, Chad Nichols and Terry Tolar pleaded guilty Tuesday in federal court in Gulfport for their roles in a conspiracy to rig bids at public real estate foreclosure auctions in Mississippi, the U.S.Department of Justice has announced.
The guilty pleas by the three bring the number of real estate investors who have pleaded guilty to five in the last two months.
In February, brothers Jason Boykin and Shannon Boykin also pleaded guilty for their role in conspiring with others to rig bids, designating a winning bidder to obtain selected properties at public real estate foreclosure auctions. Co-conspirators made and received payoffs in exchange for their agreement not to bid, the Justice Department said.
“Today’s guilty pleas send a strong signal that the Division will prosecute and hold accountable those who conspire to corrupt the competitive process and harm the American consumer,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “We extend our thanks to our law enforcement partners, with whom we will continue to investigate bid-rigging crimes in Mississippi — and throughout the United States.”
“Individuals who harm homeowners and defraud companies by cheating our foreclosure system to enrich themselves will face swift and certain criminal prosecution in Mississippi,” said U.S. Attorney Mike Hurst for the Southern District of Mississippi.
According to court documents, from at least as early as Jan. 12, 2012, through at least as late as April 19, 2017, Moore conspired with others to rig bids, designating a winning bidder to obtain selected properties at public real estate foreclosure auctions in the Southern District of Mississippi. Nichols participated in the conspiracy from as early as April 14, 2010, through as late as Feb. 25, 2015, and Tolar’s participation began as early as Jan. 12, 2012, through as late as March 31, 2017. Co-conspirators made and received payoffs in exchange for their agreement not to bid.
Moore and Tolar’s attorneys couldn’t be reached for comment. Nichols’ attorney refused to comment when reached.
The department said that the primary purpose of the conspiracy was to suppress and restrain competition to obtain selected real estate offered at public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with any remaining proceeds paid to the homeowner. According to court documents, these conspirators paid and received money in connection with their agreement to suppress competition, which artificially lowered the price paid at auction for such homes.
The Boykin brothers will be sentenced May 16. Moore, Nichols and Tolar will be sentenced July 5.
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 a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine.
The investigation is being conducted by the Antitrust Division’s Washington Criminal II Section and the FBI’s Gulfport Resident Agency, with the assistance of the U.S. attorney’s office.