Russell Carlberg is an Assistant U.S. Attorney for the Eastern District. He says, four real estate investors and an auctioneer limited competition while bidding for homes on the courthouse steps. He says they then went across the street to a bagel shop and held a private auction amongst themselves.
CARLBERG: "Typical transaction for instance a house that sold for $100,000 might go for say $150,000 and then they'd divide the $50,000 amongst themselves and then only pay the bank the $100,000."
A grand jury indictment says banks were cheated out of two-and-a-half million dollars and home values and commerce suffered a $100 million loss.
At least ten men have pleaded guilty in California in the past two months to rigging bids.