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Two men to plead guilty in bid-rigging scam of foreclosed homes
Foreclosed home sign (file)
OAKLAND, Calif. —
Two Bay Area real estate investors have agreed to plead guilty to conspiracies to rig bids and commit mail fraud at public real estate foreclosure actions.
U.S. Attorneys filed charges at the federal courthouse in Oakland Thursday against Douglas Ditmer of San Ramon and Keith Slipper of Oakland.
The case may also involve dozens more, possibly homeowners and lenders, according to an FBI investigation.
Federal attorneys said the men committed fraud at auctions in Alameda and Contra Costa Counties between June 2007 and January 2011.
Foreclosure auctions have been frequent since the housing bust.
Officials said the conspirators secretly agreed to withhold bids, hold private payoffs to avoid competition, and cheated lenders and homeowners out of fair market prices.
The two men are among 24 people who've agreed to plead guilty in the FBI investigation that covered auctions in San Francisco, San Mateo, Alameda and Contra Costa Counties.
"There are people who are taking advantage of the homeowners and now lenders," said Aly Ebrahimzadeh, of the Prometheus Social Justice Law Firm.
Oakland real estate attorney Aly Ebrahimzadeh says one problem with the foreclosure boom is that the auctions are not well-regulated.
"Where's the oversight to determine who these bidders are and what their relationship is," asked Ebrahimzadeh. "I wouldn't be surprised if it's happening far more often. It's just that these people probably did it so aggressively and ruthlessly that they got caught."
The San Francisco FBI investigation is part of President Obama's Financial Fraud Enforcement Task Force.
Federal officials said anyone who believes they might have been a victim should contact the FBI.