A judgement has been made in the case of a Forsyth County real estate investor who was indicted in 2016 for a bid rigging conspiracy at foreclosure auctions during the housing crisis.
Douglas L. Purdy was recently sentenced to 16 months in jail by U.S. District Judge Richard W. Story for bid rigging conspiracy and two counts of conspiracy to commit bank fraud, according to court documents from Dec. 21.
An indictment from February 2016 alleges that between July 2008 and December 2011, Purdy and alleged co-conspirators entered into a plan to rig foreclosure auctions in Alpharetta, Cumming and Gainesville, to “suppress and restrain competition” and purchase foreclosure properties at artificially suppressed prices.
The indictment said that Purdy and alleged co-conspirators: “agreed not to compete, or to stop competing, against each other on the purchase of selected properties,” that they “designated which conspirator would bid for selected properties,” and “purchased selected properties at public foreclosure auctions at prices they artificially suppressed.”
In court documents filed June 16, 2017, a jury found Purdy guilty of entering into a conspiracy to commit bid rigging as was alleged in the indictment.
Purdy was also accused of six counts of bank fraud in the indictment for his alleged part in the sale of five properties in Alpharetta, Cumming and Gainesville.
The indictment said that Purdy and others “did knowingly execute and attempt to execute a scheme and artifice to defraud financial institutions ... to obtain moneys, funds, credits, assets, securities, and other property owned by, and under the custody and control of such financial institutions, by means of materially false or fraudulent pretenses, representations and promises.”
The indictment also alleges that during the conspiracy Purdy and others made payoffs to and from each other, “diverting money that otherwise would have gone to the foreclosing financial institutions, other lienholders and homeowners.”
Purdy was found guilty in two of those charges, for the auction of properties in Cumming and Gainesville in 2009 and 2010.
In addition to his jail sentence, Purdy and his alleged co-conspirators will also pay $100,979.86 to the eight financial institutions affected from 2008 to 2011.
Purdy will also serve 36 months of supervised release at the end of his sentence and will pay a $1,000 fine.
Attempts to reach the attorney for Purdy were unsuccessful as of press time.