A federal grand jury returned a superseding indictment Wednesday, charging a Danville resident with obstruction of justice related to an investigation into conspiracies to rig bids and commit mail fraud at public real estate auctions.
The original indictment, returned by a federal grand jury on Dec. 7, 2011, charged Andrew Katakis with conspiring to rig bids and commit mail fraud when purchasing selected properties at public real estate foreclosure auctions in San Joaquin County. The indictment also names Donald Parker, Anthony Joachim and W. Theodore Longley and mentions other unnamed co-conspirators. Wiley Chandler, another real estate investor who was also charged in the original indictment, pleaded guilty on Feb. 24, 2012.
Katakis, Parker, Joachim, Longley and co-conspirators agreed to suppress and restrain competition by rigging bids to obtain selected properties offered at public auctions. The conspirators also devised a scheme to fraudulently acquire titles to selected properties sold at the public auctions and to divert money to co-conspirators that would have gone to the beneficiaries. The indictment alleges that the conspiracy lasted from at least September 2008 until at least October 2009.
"This superseding indictment includes allegations that, in addition to the charges previously alleged, this defendant obstructed justice,"said Benjamin B. Wagner, U.S. attorney for the eastern district of California. "The new charge arises out of a long-running investigation that has already resulted in guilty pleas by numerous other defendants who participated in the scheme charged in this case."
The added charge alleges that after Katakis received a letter notifying him that a federal grand jury had subpoenaed his bank account, he deleted and caused others to delete electronic records and documents related to the conspiracies. The document also alleges that Katakis installed and encouraged others to use a software program that overwrote deleted electronic records and documents so that they could not be viewed or recovered.
"Obstruction of a grand jury investigation is a crime the Antitrust Division takes seriously," said Bill Baer, assistant attorney general in charge of the Department of Justice's Antitrust Division. "We will prosecute those who subvert the competitive process, as well as those who attempt to conceal their illegal actions by destroying evidence."
Katakis, Parker, Joachim and Longley are charged with bid rigging, a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine ;the government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud. The newly added obstruction of justice charge against Katakis carries a maximum sentence of 20 years and a $250,000 fine.
The additional charge today is the latest filed by the department in its ongoing federal antitrust investigation of fraud and bidding irregularities in certain real estate auctions in San Joaquin County. The investigation is being conducted by the Antitrust Division's San Francisco office, the U.S. Attorney's Office for the Eastern District of California, the FBI's Sacramento Division and the San Joaquin County District Attorney's Office.
To date, 10 individuals have pleaded guilty in connection with the investigation: Anthony B. Ghio, John R. Vanzetti, Theodore B. Hutz, Richard W. Northcutt, Yama Marifat, Gregory L. Jackson, Walter Daniel Olmstead, Robert Rose, Kenneth Swanger and Chandler.
Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division's San Francisco office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm, contact the U.S. Attorney's Office for the Eastern District of California at 916-554-2700 or contact the FBI's Sacramento Division at 916-481-9110.