Foreclosure auction juror attributes hung jury to ‘weak chain of evidence’

31 January 2017 9:55am

By Joshua Sisco. First published by MLex 16 November 2016.

There was no shortage of damning evidence against four San Francisco Bay Area real estate investors accused of rigging public auctions of foreclosed homes, but it appears that prosecutors did not adequately explain to the jury, which hung this week, how the pieces fit together to form a conspiracy.

One juror, who spoke with MLex on the condition of anonymity, said that following the trial the jury of eight women and four men still did not fully grasp the concept of bid-rigging.

The two-week criminal trial before US District Judge Phyllis Hamilton, which ended with a hung jury on Monday, featured testimony from several cooperating witnesses who pleaded guilty to the same conduct, thousands of pages of documents written by the defendants and placing them at the scene of the crime, and video footage of defendants discussing how they could suppress prices at the auctions.

The juror who spoke with MLex said he voted for conviction because he felt the jury instructions required it, but “I wanted to acquit. There was a weak chain of evidence.”

The juror said that the final vote was 10-2 in favor of conviction. He described one of those holdouts as steadfastly undecided, rather than favoring acquittal.

Al Florida Jr., Robert Rasheed, John Berry and Refugio Diaz, are accused by the US Department of Justice of agreeing not place competing bids at the public auctions of foreclosed properties.

The government alleged that would-be bidders agreed to stand down from bidding on certain properties at public real estate auctions in order to suppress the price paid by the winner. Then, at private auctions known as “rounds,” the properties were sold again in bidding among the conspirators who originally abstained. The winner of the round would get the property and the others would split the profit — the difference between the public auction price and the round-robin price.

The defendants would allegedly coerce public auction participants into the conspiracy by bidding up the prices until they dropped out.

Testimony was heard from a former executive at a trustee company, agents with the US Federal Bureau of Investigation and five cooperating witnesses who admitted involvement in the scheme.

In closing arguments, Florida’s attorney told the jury there was not a single objective fact witness — everyone had something to gain.

That may have resonated with the jury.

“Where were the criers?” the juror asked, referring to the auctioneers, none of whom took the stand.

The juror said he would have liked to hear their testimony, “if nothing else, then as witnesses. What did they see? They should know when the ice hits,” he said, referring to bidders getting frozen out of the auctions for not participating in the conspiracy.

While the government argued throughout the trial that there would have been no rounds had there been no bid-rigging at the primary auctions, they did not argue that the rounds themselves were illegal.

The jury did see video footage of the rounds, but there was very little evidence of illegal activity in the public auctions, the juror said. There was a great deal of testimony on how agreements not to bid at the public auction were made through winks, nods and shoulder taps, and footage of that would have been helpful, he said.

The jurors spent five hours deliberating. Twice Monday they sent notes to the court to say they were deadlocked.

“We have deliberated to the extent that all twelve jurors state that there are no aspects of the jury instructions that are unclear to them,” stated the first note, sent around 11:00 a.m. “Each juror feels that he or she has reached an informed decision based on the evidence.”

At that point, it is understood that the vote count was 7-5 in favor of conviction.

Hamilton instructed them to keep deliberating. At about 2:00 p.m., the court received a second note describing a deadlock. Several of the jurors had changed their verdicts, the second note said, but the group felt they were never going to reach a consensus.

At that point, Hamilton said that the jury had acted responsibly throughout the entire trial, and she declared a mistrial.

The second jury note said “we examined as many bid logs as we could find and correlated them with round sheets to verify the participation of some defendants.”

The juror told MLex though that all 12 people were unhappy with that task, believing that was “the government’s job.”

Central to the government’s case were “round sheets,” handwritten documents from the participants, many of whom pleaded guilty, tracking the flow of money through the bidding in the secondary auctions. Another group of documents, known as bid logs, were used by the auctioneers to track the bids in the public auction.

Furthermore, some of the bid logs showed prices at the public auctions that more than doubled. The government did not use the bid logs in their case, but Rasheed’s attorney, Steven Gruel, did show them to the jury as evidence of competition.

“It didn’t look like [the defendants] were freezing people out, the juror said.

The trial was initially set to last for four weeks, but prosecutors cut it short after just five days of presenting evidence. At least nine cooperating witnesses were initially expected to testify, though only five ultimately did.

That appears to have left the jury wanting more.

“Everyone was disappointed” that the prosecution stopped its case early, the juror said. The entire jury felt that the case did not come to a natural close, he added.

Prosecutors are expected to retry the case, and Hamilton has set a Nov. 30 court date to discuss a new trial. Dozens of people have pleaded guilty as part of the investigation; dropping charges against these four men, with at least three other trials currently scheduled, would be a difficult proposition.

But prosecutors are not in the dark about what went wrong. Following the trial, two of the jurors, including the foreman, spent close to an hour with the government’s entire trial team, offering a detailed explanation of what the jury thought was lacking in their case. Both declined to meet with the defense team.

Both of those jurors declined comment to MLex, but the foreman said he plans to continue working with prosecutors to provide a more detailed analysis, “because I don’t want to see another hung jury on the retrial.”

Joh Sung-Wook Interview