Georgia real estate investor to serve 16 months in prison for bid rigging foreclosure auctions.
A real estate investor from Georgia indicted for bid rigging has received a sentence. His name is Douglas L. Purdy and he will serve 16 months in jail. According to the indictment papers, he was a part of a plan to rig foreclosure auctions. These auctions had locations in different parts of Georgia including the cities of Alpharetta, Cumming, and Gainesville.
According to Forsyth County News, the plan involved Purdy and his co-conspirators buying foreclosure properties at auctions for “artificially suppressed” prices. That means that the low prices were being controlled in some way. This is part of “bid rigging”. According to the indictment in 2016, the band of fraudsters made agreements about which items to bid for. They “agreed not to compete, or to stop competing, against each other on the purchase of selected properties.” They then assigned who was going to buy what.
After the schemers made their purchases they often made payoffs between themselves through “secret auctions”. This harmed the financial institutions involved because that was money that should have gone toward debt. The actions of Purdy and his team affected a total of eight financial institutions. For this reason they received orders to repay $100,979.86.
After a two week trial, a federal grand jury convicted Purdy for bank fraud and bid rigging on June 16, 2017. Not only will he pay the restitution charges, but the Honorable Judge Story sentenced him to 16 months in prison. Assistant AG Delrahim hailed the verdict as “another example of the Antitrust Division’s commitment to aggressively prosecute bid rigging schemes.”
Purdy will be in company with other like-minded criminals. There were 22 other real estate investors who also pleaded guilty following his conviction. After serving prison time, he will be required to 36 months of supervised release.