Atlanta Man Admits to Bid Rigging, Mail Fraud in Foreclosure Auctions

A local real estate investor pleaded guilty Tuesday to conspiring to rig bids and commit mail fraud at local home foreclosure auctions during the recent recession, according to the U.S. Justice Department.

Trent Gaines, 45, of Atlanta, admitted in the U.S. Court for the Northern District of Georgia that he and others conspired not to bid against one another at public foreclosure auctions from October 2008 to November 2010 in Fulton County, and from September 2006 to February 2011 in DeKalb County, the Justice Department said Tuesday in a statement.

Gaines also admitted “to conspiring with others to use the mail to carry out a scheme to fraudulently acquire title to selected Fulton and DeKalb properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that should have gone to mortgage holders and others,” the DOJ said.

The foreclosed homes then went to conspirators who submitted the highest bids “in private side auctions open only to Gaines and his co-conspirators,” the department said.

The DOJ said the purpose of the conspiracies was “to suppress and restrain competition and divert money to the conspirators that otherwise would have gone to pay off the mortgage,” and other holders of debt secured by the properties, “and, in some cases, the defaulting homeowner.”

Gaines pleaded guilty to violating the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine, according to Mark Abueg, a Justice Department spokesman.

He also pleaded guilty to conspiracy to commit mail fraud; each count carries a maximum penalty of 20 years in prison and a fine of up to $250,000.

Gaines is scheduled to be sentenced Jan. 26 in the Atlanta federal court by U.S. District Judge William S. Duffey Jr.

Including the case against Gaines, 10 federal cases have been filed against defendants in Georgia for bid rigging at public foreclosure auctions, the DOJ said. The cases stem from an investigation conducted by the DOJ’s Antitrust Division, the FBI’s Atlanta Division and the U.S. Attorney’s Office of the Northern District of Georgia.

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force, which involves more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, the DOJ said.

Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s Washington Criminal II Section at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit the DOJ website.