Real estate investor Christopher Graeve pleaded guilty this week to rigging online foreclosure auctions for homes with a total value of $8 million, the U.S. Department of Justice said.
Graeve is the second real estate investor to plead guilty in this investigation. Stuart Hankin in June admitted to violating antitrust law.
A violation of the Sherman Act carries a penalty of up to 10 years in prison and a fine of up to $1 million.
Federal prosecutors said they will recommend Graeve pay restitution of $160,000, a sum equal to 2 percent of the $8 million in rigged auctions he participated in. Graeve’s sentencing is scheduled for January.
Prosecutors in November charged Graeve, Hankin and Avi Stern with conspiring to keep bids low for online foreclosure auctions in Palm Beach County.
From January 2012 until June 2015, prosecutors say, Hankin, Graeve and Stern engaged in a “conspiracy to suppress and eliminate competition by rigging bids and allocating the market for properties sold during online property foreclosure auctions in Palm Beach County.”
According to the 2017 indictment, the three investors agreed not to bid against each other on certain properties or in certain neighborhoods. Their actions “artificially lowered” the prices paid for foreclosures in Palm Beach County.
“Real estate investors who deal in foreclosed properties should be on notice that the division will not tolerate the subversion of competition in foreclosure auctions,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division.