Georgia Real Estate investor, David Wedean pled guilty last week for his role in conspiracy to rig bids and commit mail fraud at purchasing real estate foreclosure property auctions. The felony charges against Wedean were filed in April 2015 in the U.S. District Court of Georgia, in Atlanta.
Wedean, according to court documents “conspired with other real estate investors to profit by defrauding mortgage holders and property owners”. This is the eighth prosecution in Georgia against defendants for rigging public foreclosure auctions.
Wedean and other investors allegedly suppressed and restrained competition and concealed payoffs to obtain selected real estate in Fulton and DeKalb County public foreclosure auctions. The investors would agree not to bid against each other, and would assign a designated winning bidder before the auction. They would then hold a second, private auction - open only to the conspirators.
When a lender forecloses on a borrower, the property is usually put up for auction to sell. After the sale, the proceeds are used to pay off what the borrower owed on the mortgage, and any other debt that may be attached to the property (such as liens). If any monies are left after the mortgage/other debt is paid, that amount would go back to the homeowner.
The investors in Georgia, allegedly rigging the auctions, deprived the homeowner-borrower the money that would have paid off the mortgage/debts and any money that would have gone back to the homeowner-borrower.
This is a violation of the Sherman Anti-Trust Act outlawing monopolistic business practices and carries a maximum penalty of 10 years in prison and a $1 million fine. Wedean also faces a maximum penalty of 20 years in prison and a fine of $250,000 for conspiracy to commit mail fraud.
Eric Hulsman, another conspirator pled guilty May 20th for his role in the conspiracy.
There is no information whether the defrauded foreclosed homeowners will ever see any benefit from the arrests nor is their any information how many other states have had the same problem with foreclosure auctions.
If you are in Colorado and need foreclosure assistance or a foreclosure defense atorney, contact Gantenbein Law Firm at 303-618-2122. Our Denver attorneys also provide legal assistanceon for your best options for your tax law, IRS issues, business law, credit or HOA issues. Visit our website, www.gantenbeinlaw.com, for more information on our practice areas and lawyers.