Help us make a difference! Since mid-1988, we have seen questionable sales/purchases on the courthouse steps in Marin, Sonoma and Napa Counties. Now, the FBI is asking anyone with any information about activities that seem shady to call its 24-hour line, 415-553-7400, or the agency’s anti-trust division at 415-436-6660.

Please read the following excerpts from articles in The San Francisco Chronicle and MarinScope.

Charter Properties, Triple Investments, and Lecale Investments in Sausalito, California are noted in the Marinscope article. Members of these companies have purchased houses of MFA homeowners on the courthouse steps. As the result of one questionable transaction, a family fighting foreclosure visited Charter Properties in 2009 and wrote about it on their website Faces of Foreclosure. Nothing came of that at the time, but now, perhaps it will. Truth will out.

Bid-rigging, which is suspected in some deals, according to The Chronicle article, violates the federal Sherman Antitrust Act and can carry a maximum penalty of 10 years in prison and a $1 million fine.

Excerpted from Marinscope Newspapers
(Anna McCarthy, Wednesday, January 19, 2011)

The FBI has recently issued search warrants and conducted interviews of businesses throughout the Bay Area suspected of involvement in illegal anti-competitive practices at trustee sales of foreclosed homes.

2300 Bridgeway, Sausalito Photographer: D.A. Levy, 11/2009

A source who preferred to remain anonymous said roughly 20 agents were at an office at 2300 Bridgeway in Sausalito for more than 13 hours on January 11 . . . Agents were carrying boxes and sitting around a conference table.

The Sausalito police confirmed that FBI agents were in the area that day.

Official real estate and other documents list at least three companies headquartered at the Bridgeway office, including Charter Properties, Triple Investments and Lecale Investments.

A representative for Lecale said Lecale was not investigated.

Joseph Giraudo, who is listed as the licensee for Charter Properties with the state, did not return calls. A representative for Triple Investments also did not return calls. A woman who answered the phone at the Bridgeway office said, “We have no comment,” and then hung up.

The FBI said that it could not go into any more details about exactly what it’s investigating. In general, anti-competitive business practices are those that prevent or reduce competition in a market.

Ward Hanigan, a foreclosure specialist based in San Diego County, said the most common anti-competitive business practice that occurs at any type of auction, not just foreclosure sales, is called “bid chilling.” Hanigan explained that bid chilling is an agreement between two or more people to keep the bid as low as possible. Hanigan offered as an example that bidders might agree to stop at a certain price, then negotiate behind closed doors after the sale was complete and split the difference in the sales price and the price negotiated in private. Other types of illegal anti-competitive business practices could include underhanded deals with auctioneers or other bribing activities . . .

A family fighting foreclosure was facing a sale date in Sonoma County even while negotiating with the lender. The foreclosure was to have been delayed by court order, but we have seen properties sold even though a court order to stay the sale was presented. In order to be sure the home was not on the block, a group of volunteers drove up from Southern Marin. Photographs: D.A. Levy, October 2010

Excerpted from The San Francisco Chronicle (Carolyn Said, January 21, 2011)

Foreclosure auctions take place every weekday on the steps of courthouses throughout California. Now the FBI is investigating whether some real estate speculators are illegally rigging bids for these sales. . .

Rules of the Game

Bids are all cash; properties are sold as is, subject to existing liens and with no guarantees as to condition, so only deep-pocketed, experienced investors generally make bids, seeking properties that still have some equity that they can fix and flip, or hold onto for the long term.

A real estate agent who attended some San Francisco auctions in hopes of buying investment property described what he witnessed.

"If you start to bid, there are about five guys who work together and who box you in," said the man, who asked not to be named for fear of retribution. "One guy came up to bid who clearly was not part of that crew. The guys were bidding. At some point, (their ringleader) turned to (the outsider) and said, ‘You must really like this property. It must be really important to you.’ He had a piece of paper in his hand; he showed it to the guy. The guy nodded OK and then disappeared into the building."

The man said he was positive that the outsider was being paid off not to bid, although he did not witness money changing hands.

At Alameda County’s auction Wednesday, most investors declined to discuss the issue, but some said they welcomed the FBI’s interest.

"This has been going on for many years," said one man who declined to give his name. "It’s a closed group that doesn’t always allow the properties to go up to their true value."

. . . Anthony B. Ghio admitted “that he conspired with a group of real estate speculators who agreed not to bid against each other at certain public real estate foreclosure auctions in San Joaquin County,” according to a news release from the U.S. Department of Justice. “The primary purpose of the conspiracy was to suppress and restrain competition and obtain selected real estate … at non-competitive prices.”

The FBI is asking anyone with any information to call its 24-hour line, 415-553-7400, or the agency’s anti-trust division at 415-436-6660.