San Francisco, California - Five real estate investors were sentenced for their role in a conspiracy to rig bids, in violation of the antitrust laws, at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

Joseph Giraudo, Kevin Cullinane, Raymond Grinsell, Daniel Rosenbledt, and Mohammed Rezaian were charged with and convicted of bid rigging at real estate foreclosure auctions in San Mateo County, California. Giraudo, Grinsell, Rosenbledt, and Rezaian were also convicted of bid rigging in San Francisco County.

Giraudo was sentenced to serve 15 months in prison followed by three years of supervised release, and he was ordered to pay a criminal fine of $2 million. Cullinane was sentenced to serve eight months in prison followed by three years of supervised release, and he was ordered to pay a criminal fine of $500,000. Grinsell was sentenced to three years of probation on the condition that he reside at a halfway house or residential re-entry center for 10 months. Grinsell was also ordered to pay a criminal fine of $1,433,045 and $156,146.79 in restitution. Rosenbledt was sentenced to serve six months in prison followed by three years of supervised release, and he was ordered to pay a criminal fine of $1,236,355 and $127,808 in restitution. Rezaian was sentenced to four years of probation on the condition that he reside at a halfway house or residential re-entry center for five months. Rezaian was also ordered to pay a criminal fine of $1,236,355 and $110,155.70 in restitution. The issue of restitution as it relates to Giraudo and Cullinane will be decided at a later date.

“As the sentences imposed yesterday show, bid rigging does not pay,” said Assistant Attorney General Makan Delrahim for the Justice Department’s Antitrust Division. “In addition to facing prison time, defendants can expect to pay substantial criminal fines and restitution for their ill-gotten gains.”

Between 2008 and January 2011, the defendants and other bidders at the auctions conspired not to bid against one another for selected properties, instead designating a winning bidder for the property at the auction and negotiated payoffs among themselves in return for not competing with one another.

When properties are sold at public auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds paid to the homeowner.

The sentence is a result of the Division’s investigation into bid rigging at public real estate foreclosure auctions in California’s San Francisco, San Mateo, Alameda, and Contra Costa counties.

These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office.