Palm Beach County Foreclosure Investor Pleads Guilty to Bid Rigging Charge
By:Jeff Ostrowski - June 25, 2018
Palm Beach County real estate investor accused of rigging bids on public foreclosure auctions has pleaded guilty, federal prosecutors said.
Stuart Hankin admitted to violating antitrust law, the U.S. Department of Justice announced. 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 in November charged Hankin and two others with conspiring to keep bids low for online foreclosure auctions in Palm Beach County. Also indicted were Christopher Graeve and Avi Stern.
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 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.
Related: Feds produce millions of pages of documents in bid-rigging bust
“Their greed left victims – including homeowners and other valid stakeholders – shortchanged,” Robert F. Lasky, the FBI’s special agent in charge in Miami, said in a statement.
Hankin initially disputed the charges.
“Stu is innocent,” his attorney, David Oscar Markus, said in November. “He bought properties through an online auction like eBay in which anyone in the country could bid. No one controlled the market, nor could they. These properties were sold at fair prices.”
The three men appeared in federal court in West Palm Beach in mid-November to surrender their passports and promise to post bond. Their trial was scheduled for early January.
However, attorneys for the three defendants asked for more time to prepare for trial after the feds released as evidence millions of documents.
Because the U.S. Attorney’s Office wins convictions in more than 90 percent of the cases it brings, defendants often plead guilty before going to trial.
The indictment offers no details about the number of homes the three bought, how much they paid or how much their actions might have pushed down prices.