“Collusive Conduct” on the Courthouse Steps can land you 10 years in jail

You go to the Courthouse steps to see if you can snag a sweet deal on a foreclosure property – then you see your buddy there who wants to do the same – snag a sweet real estate deal.  As you wait around for the auctions start, you and your buddy compare notes on the properties you want to bid on.  Imagine this scenario:

“Hey dude, I’ve got my eye on XYZ street”.

“Oh, I wanted that one too”.

“OK – well, I won’t bid on that one if you won’t bid on the one on ABC street”.

“OK, deal”.

That little conversation can land you a $1,000,000 fine and up to 10 years in jail, according the the Sherman Antitrust Act of 1890, and the heavily funded presidential task force on Financial Fraud.

According to a recent press release, 2 more people were found guilty in northern California’s foreclosure auction process. “The conspirators suppressed competition and lined their pockets through fraudulent and collusive conduct at the expense of lenders and distressed homeowners,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The Antitrust Division and its law enforcement partners at the FBI will continue to hold accountable individuals who subvert the competitive process at foreclosure auctions around the country.”

As I mentioned in a previous post “On Bid-Rigging at the Courthouse Steps“, something as innocent as two bidders who’s eye’s connect, showing a meeting of the minds…and a deal was made as the upwards bidding stopped.  Yes, that violates the Sherman Trust Act.

This surprised me as being so severe – what about you?