Charge added in alleged San Joaquin County bid rigging

local@modbee.comMay 8, 2013 

— A Modesto businessman already facing federal charges related to an alleged property bid-rigging scheme had another one added Wednesday.

A federal grand jury in Sacramento indicted Andrew Katakis with obstruction of justice related to an investigation into conspiracies to rig bids and to commit mail fraud at foreclosure auctions held in San Joaquin County, the U.S. Department of Justice announced.

Katakis was president of California Equity Management, which had an office in downtown Modesto until his arrest in December 2011. He and three other men face trial in November. Ten others have pleaded guilty.

The new charge alleges that after Katakis received a letter notifying him that a federal grand jury had subpoenaed his bank account, he deleted and told others to delete electronic records and documents related to the charges.

The indictment claims that Katakis installed and directed others to install a software program that overwrote deleted electronic records and documents so that they could not be viewed or recovered.

"We will prosecute those who subvert the competitive process, as well as those who attempt to conceal their illegal actions by destroying evidence," said Bill Baer, assistant attorney general in charge of the Department of Justice's antitrust division.

According to the new indictment, Katakis, Donald Parker, Anthony Joachim, W. Theodore Longley and others suppressed competition by rigging property bids at foreclosure auctions. They bought dozens of foreclosed homes on the cheap, resold them at higher prices and split profits that should have gone to initial lenders, federal antitrust authorities say.

Katakis acknowledges doing business with the others but says he wasn't in on the game, according to legal paper filed by his attorney earlier this year.

The indictment alleges that the conspiracy lasted from at least September 2008 until at least October 2009.

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