Photo: Flickr/Paul Sableman
Over the past ten years, the Bay Area’s rollercoaster housing market has made house auctions a potential hotbed for corruption. One of Oakland’s largest landlords, Michael Marr, is currently on trial for rigging foreclosure auctions during 2008 and 2011. His real estate company, Community Realty, presently owns 280 houses and apartment buildings in Alameda County, 90 percent of which are located in Oakland.
Beginning in 2008, Marr took advantage of the economic downturn and purchased hundreds of foreclosed homes over a four-year period. These public auction sales were often priced at less than half their market value. Rather than flipping his properties, Marr held onto the vast majority of them and saw impressive returns on his investments — largely thanks to the Bay Area tech boom. By last year, only the City of Oakland, the State of California, and the Oakland Housing Authority owned more property than Community Realty.
Last week, Douglas Ditmer, a Bay Area real estate investor, testified that those public auctions were rigged and negotiated in private amongst a group of select landlords, sometimes even with added kickbacks. Since he has already pleaded guilty and is cooperating with the government, Ditmer named other Bay Area landlords, including Gregory Casorso and Javier Sanchez, as active participants in the scheme. He says the group would agree to not bid on each other in order to cut the price tags on properties and shorten the auctions. Then they would go to a nearby secret location to continue negotiating amongst themselves.
FBI Special Agent David Lewis also testified and said that he was able to participate in three of the illegal rounds while undercover.
The trial with Marr, Casorso, and Sanchez is still ongoing. Stay tuned to BuzzBuzzNews for updates as the story develops.