13 Dec Deceit, rigged bids and extortion: How HOA foreclosures can open the door to predators – Charlotte Observer
By Ames Alexander
A federal lawsuit focused on an intricate bid-rigging and extortion scheme has helped illuminate another pitfall of HOA foreclosures: They can leave homeowners vulnerable to profiteers. The four plaintiffs in the lawsuit, all North Carolina homeowners who fell behind on their homeowners association dues, were victimized by a network of people who “were unjustly enriched by their illegal conduct,” U.S. District Judge Catherine Eagles concluded last year, after a federal jury ruled in favor of the homeowners.
A Cary-based limited liability company known as The Estates engaged in bid-rigging in order to limit competition and buy foreclosed houses at lower prices, jurors found.
But before the sales closed, high bidders sometimes approached homeowners with an offer: They would not take their homes if the homeowners paid them tens of thousands of dollars.
“This was an elaborate scheme to take advantage of people who were in a horrible period of their lives,” said Chapel Hill attorney Jim White, who represented the plaintiffs.
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