Three real estate investors in Palm Beach County are in the hot seat for allegedly conspiring to rig bids submitted through online foreclosure auctions, according to the Palm Beach Post.
Federal prosecutors are investigating Avi Stern and Prodigy Capital’s Christopher Graeve and Stuart Hanki, according to an indictment returned by a federal grand jury in West Palm Beach.
From January 2012 through June 2015 the three real estate investors allegedly colluded together to push down prices in Palm Beach County foreclosure auctions, according to the Palm Beach Post.
The number of alleged collusions remains unclear, as well as how much they paid or how much their actions might have pushed down prices.
Each investor now faces one count of conspiracy to restrain trade. If convicted, each could face a penalty of up to 10 years in prison and a fine of up to $1 million.
Prodigy Capital specializes in acquiring discounted properties through foreclosure courthouse auctions, according to its website.
Palm Beach County moved its foreclosure auctions online seven years ago, three months after Miami-Dade and Broward counties switched.
Online tools and digital currencies are being used more frequently by real estate investors. Just this week, a New Jersey-based investor bought a Boca Raton office building using the online auction tool Ten-X, formerly known as Auction.com. [Palm Beach Post] – Amanda Rabines