MODESTO -- Five people, including a Modesto-based real estate investor, have been indicted on charges they rigged bids at foreclosure auctions in San Joa-quin County.
Sharis A. Pozen, acting assistant attorney general of the Department of Justice's Antitrust Division, and Benjamin B. Wagner, U.S. attorney for the Eastern District of California, announced the indictment Tuesday against Andrew B. Katakis, 47, of Danville; Wiley C. Chandler, 47, of Lodi; Donald M. Parker, 48, of Valley Springs; Anthony B. Joachim, 44, of Stockton; and W. Theodore Longley, 62, of Roseville.
All are accused of conspiring to rig bids and commit mail fraud when buying certain properties at public real estate foreclosure auctions. The indictment also charges Longley, the auction crier, with aiding and abetting.
Tuesday, authorities arrested Katakis at his office in Modesto, Chandler at his home in Lodi and Longley at his home in Roseville. Parker surrendered to the U.S. marshal, and an arrest warrant has been issued for Joachim.
Katakis is president of California Equity Management, which owns the 13th Street building where it is housed and has its headquarters there along with several other businesses. In September, FBI agents searched the building. Officials at that time would say nothing other than that they were serving a search warrant.
According to the indictment, Katakis, Chandler, Parker, Joachim, Longley and unidentified co-conspirators rigged bids to obtain selected properties offered at public auction from September 2008 to October 2009.
Claim of diverted money
The men also are accused of implementing a scheme to fraudulently acquire title to selected properties sold at the public auctions and to divert money to co-conspirators that would have gone to the beneficiaries.
"The indictment unsealed today alleges that the defendants engaged in conspiracy, deceit, and heavy-handed tactics to take advantage of a depressed housing market," Wagner said in a news release Tuesday. "This indictment follows a lengthy investigation and a series of guilty pleas by other participants in this activity."
According to court documents, after the conspirators' designated bidder bought a property at a public auction, they would hold a second, private auction, at which each participating conspirator would bid the amount above the public auction price he or she was willing to pay. The conspirator who bid the highest amount at the end of the private auction won the property. The difference between the price at the public auction and that at the second auction was the group's illicit profit, and it was divided among the conspirators.
To date, eight people have pleaded guilty in connection with the investigation: Anthony B. Ghio, John R. Vanzetti, Theodore B. Hutz, Richard W. Northcutt, Yama Marifat, Gregory L. Jackson, Walter Daniel Olmstead and Robert Rose.
Last month, Kenneth A. Swanger was charged with participating in bid-rigging conspiracies at public real estate foreclosure auctions.
Katakis, Chandler, Parker, Joachim, and Longley could face up to 40 years in prison and fines in the millions of dollars if convicted, the U.S. attorney's office said.
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