Attorney General stops scheme to rig bids on foreclosure auctions

Attorney General stops scheme to rig bids on foreclosure auctions

Company sought to illegally manipulate sales of Durham, Mecklenburg properties

Raleigh, NC – December 28, 2010 – (RealEstateRama) — A Virginia man and his company are barred from rigging bids on public auctions and must pay civil penalties and consumer refunds for trying to fix foreclosure sales of properties in Durham and Mecklenburg counties, Attorney General Roy Cooper announced today.

“Trying to fix public auctions isn’t the fair, legal way to do business,” Cooper said. “Bid rigging squelches honest competition and keeps buyers and sellers from getting a truly fair price.”

The Attorney General alleges that Bruce Olvin McBarnette of Sterling, Virginia and his company, Summit Connection LLC, entered into agreements to rig bids on four foreclosed properties being auctioned in Durham County in 2009 and 2010:

  • McBarnette told a local pastor that he would continue bidding against her for property her church wanted to purchase unless she paid him $1,200.
  • A man trying to purchase a home for his mother paid McBarnette $800 after McBarnette told him he would lose the auction unless he paid the money.
  • A pastor who wanted to help revitalize his church’s neighborhood paid McBarnette a total of $2,900 so that his company wouldn’t keep bidding on two properties.

In seven other property auctions, Cooper contends that McBarnette attempted to get competing bidders to pay him not to bid against them but the bidders turned him down.  Four of those auctions involved Durham County properties, and three involved Mecklenburg County properties.

Wake County Superior Court Judge Donald Stephens today approved Cooper’s request for a consent judgment against McBarnette and Summit Connection. Under the judgment, McBarnette and Summit Connection must pay $47,400.

Of that total, McBarnette and Summit Connection have paid $4,900 in restitution, the amount of money they made for agreeing not to bid on certain properties. The money will go to sellers of the properties who would have made more money at auction had McBarnette not rigged the bids. Restitution will be paid through the Durham County Clerk of Superior Court, which alerted the Attorney General’s Consumer Protection Division to some of McBarnette’s activities.

In addition, McBarnette and his company are barred permanently from entering into any agreement not to bid on public sales of property in North Carolina. They are also prohibited from asking anyone not to bid and from offering or accepting anything of value in exchange for not bidding.

Contact:  Noelle Talley (919) 716-6413

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