A Danville resident and two other Contra Costa County real estate investors have accepted plea deals for conspiring to commit mail fraud and rig bids at public foreclosure auctions, according to federal authorities.
The U.S. Department of Justice announced the agreements Thursday the same day felony charges were filed in federal court in Oakland against Leslie Gee of Danville, Thomas Bishop of Pleasant Hill and Rudolph Silva of Concord.
Court documents show the trio worked together and sometimes with others to illegally manipulate Contra Costa County public foreclosure auctions between January 2008 and January 2011 in order to turn around and hold closed, private auctions for the properties, authorities said. Gee was also charged with carrying out similar activities in Alameda County in 2009.
"(Thursday's) plea agreements are the latest step in the Antitrust Division's efforts to hold accountable investors for their fraudulent and collusive activities at real estate foreclosure auctions," said U.S. assistant attorney general Bill Baer. "The division will continue to prosecute individuals who participated in illegal conspiracies and harmed distressed homeowners and lenders."
According to authorities, Gee, Bishop and Silva circumvented the public auctions by agreeing not to bid against each other and designating a winner beforehand. The properties would ultimately be sold to the conspirator who bid the highest at a subsequent private auction often held at or near the courthouse steps.
Prosecutors also said the three men conspired to use U.S. mail to carry out their scheme aimed at fraudulently obtaining properties sold at public auctions, to make and receive payoffs, and to divert funds to co-conspirators.
The primary purpose the scheme, according to authorities, was to inhibit competition and hide payoffs in order to acquire foreclosed real estate at non-competitive prices. Additionally, the culprits ended up taking home money that would have otherwise gone to lenders, other debt-holders and sometimes even the defaulting homeowners, prosecutors said.
The trio could receive up to 40 years in prison and multimillion-dollar fines, according to federal officials.
To date, 43 people including Gee, Silva and Bishop have pleaded guilty or agreed to plead guilty as a result of ongoing federal antitrust investigations into fraudulent activities at Northern California public real estate foreclosure auctions, authorities added.