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Real estate investor sentenced for rigging bids on foreclosed properties

A Forsyth County real estate investor convicted in June of rigging foreclosure auctions during the housing crisis was recently sentenced to 16 months in jail.

Douglas L. Purdy was sentenced 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 dated Dec. 21.

Between July 2008 and December 2011, Purdy and alleged co-conspirators entered into a plan to rig foreclosure auctions in Gainesville, Cumming and Alpharetta to “suppress and restrain competition,” according to Purdy’s February 2016 indictment.

Attempts to reach Purdy’s attorney were unsuccessful as of press time.

The indictment stated Purdy and 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.”  

A jury found Purdy guilty of entering into a conspiracy to commit bid rigging, according to court documents filed June 16, 2017.  

Purdy also was accused of six counts of bank fraud in the indictment for his alleged part in the sale of five properties in Gainesville, Cumming and Alpharetta.

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,” according to the indictment.

Purdy was found guilty on two of those charges, for the auction of properties in Gainesville and Cumming in 2009 and 2010.

In addition to his jail sentence, Purdy and his co-conspirators were ordered to 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.  

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