FOR IMMEDIATE RELEASE AT
THURSDAY, SEPTEMBER 12, 1996 (202) 616-2771
TDD (202) 514-1888
TWO NORTHERN VIRGINIANS INDICTED IN REAL ESTATE BID
RIGGING SCAM
WASHINGTON, D.C. -- Two northern Virginia real estate
speculators were indicted today for participating in criminal bid
rigging schemes to hold down prices at residential real estate
auctions in northern Virginia, said the Department of Justice's
Antitrust Division.
The two conspired with a group of other real estate
speculators who agreed not to bid against each other at real
estate foreclosure auctions, the Department said. Their
agreement allowed them to buy real estate for low, noncompetitive
prices, and deprived homeowners facing foreclosure of the equity
in their homes.
The charges against Mija S. Romer of Arlington, Virginia,
and Khem C. Batra of Burke, Virginia, were filed in U.S. District
Court in Alexandria, Virginia, as a result of the Department's
ongoing antitrust investigation into foreclosure auction bid
rigging in northern Virginia. Three others, Alexander Giap, Leo
Gulley and Donald M. Kotowicz, have already pleaded guilty as
part of the same bid rigging scheme.
Twelve individuals and one corporation were convicted
from 1989 to 1991 after the Department's previous investigation
of real estate auction bid rigging in Washington, D.C.
Anne K. Bingaman, Assistant Attorney General in charge
of the Department's Antitrust Division, said, "This bid-
rigging scam is a first class rip-off. It kicks people who are
already down--homeowners facing foreclosure. It cheats them out
of whatever equity they have in their homes."
The Department's Antitrust Division and U.S. Attorney
Helen F. Fahey, of the Eastern District of Virginia, worked
jointly to bring about today's charges.
Romer and Batra were charged with bid rigging, mail
fraud, and obstructing tax enforcement. Their involvement in the
bid rigging conspiracies began as early as May 1993 and continued
through April 1995, the Department said.
The grand jury charged that the conspirators suppressed
bidding at public auctions. After their designated bidder bought
a property at an auction, they would meet secretly to hold a
second auction. There, each conspirator bid an amount above the
public auction price. The conspirator who bid the highest amount
won the property. That amount was the group's illicit profit,
and it was divided among the conspirators in payoffs made later.
Both Romer and Batra were charged with mail fraud in
connection with mailing payoffs of their bid rigging scheme.
Romer and Batra also were charged with conspiring to
obstruct tax enforcement by agreeing to conceal their bid rigging
payoffs by making them in cash.
In addition, Romer was charged with bank fraud for
submitting a false income tax return to obtain a loan.
Bingaman said the northern Virginia antitrust
investigation is being conducted by the Division's Litigation I
Section with the assistance of the Federal Bureau of
Investigation and the Internal Revenue Service.
Romer faces imprisonment of up to 43 years and fines of
up to $1.6 million or more depending on losses created by the
crime.
Batra faces imprisonment of up to 13 years and fines of
up to $850,000 or more depending on losses created by the crime.
The maximum penalty for a person convicted of a Sherman
Act bid rigging violation committed after November 16, 1990, is
three years imprisonment and a fine of the greatest of $350,000,
twice the pecuniary gain the person derived from the crime, or
twice the pecuniary loss suffered by the victims of the crime.
The maximum penalty for a person convicted of mail
fraud is five years imprisonment and a fine of the greatest of
$250,000, twice the pecuniary gain the person derived from the
crime, or twice the pecuniary loss suffered by the victims of the
crime.
The maximum penalty for a person convicted of the tax
enforcement obstruction charge faced by Romer and Batra is five
years imprisonment and a fine of the greatest of $350,000, twice
the pecuniary gain the person derived from the crime, or twice
the pecuniary loss caused by the crime.
The maximum penalty for a person convicted of bank
fraud is 30 years imprisonment and a fine of $1 million.
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