11 Jan, 2015 @ 09:00
1 min read

Fiddling the bids


AUCTION rigging is a form of illegal collusion in which property speculators manipulate the bidding process to their advantage.

Taking place most often at public foreclosure real estate auctions, it is a practice that is all too frequent here.

In some countries, it can incur jail penalties up to 10 years and fines as high as €1 million. The US Department of Justice claims that over the past three fiscal years, it has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, almost a third of them involving real estate.

Spain’s courts have also been known to deal sternly with the problem; we can recall one famous bid rigging case in Valencia where 42 individuals received lengthy sentences. On appeal 27 were later acquitted, but two of the fraudsters got 10 years each.

But the last high profile case took place as long ago as 1995. Since then, the government has done little to curb it.

You can witness the fraudsters in action by going to more or less any busy auction where a desired property is due to come under the hammer.

Let’s take Marbella for example. Here, a selected group of subasteros – a term that describes a combination of speculator, opportunist, fraudster and liar – operate with alarming impunity.

These guys are familiar faces who turn up day in day out to hijack the process. They chase away legitimate bidders – occasionally with threats – demand money from serious contenders in exchange for their non-participation, or alternatively offer them money to refrain from bidding themselves, or escalate the bids to force out a newcomer.

The erstwhile boss of this Mafia-style syndicate was a bold (not to mention bald), overweight individual whose name we shall withhold. He had experience, money and contacts in the courts, but he now appears to have taken a step back. Perhaps his prominence was beginning to mirror his physique; perhaps he started to feel, quite sensibly, that it was time to retire. But his cohorts remain, as so do hundreds of others operating throughout Spanish courts.

There is a simple and obvious solution: ‘first price’ auctions in which the potential buyers place their bids in sealed envelopes and simultaneously hand them to the auctioneer. Sadly, our lawmakers have so far failed to bring this in, or to tackle any of the flaws that are glaringly obvious in the current system.

Antonio Flores (Columnist)

Lawyer Antonio Flores is the legal columnist for the Olive Press. Antonio has been practising law since 1997, year in which he began working for a large law firm in Marbella as a Property Lawyer. In 1998 he left the company he had joined a few months earlier, and used his knowledge and the experience gained to build his own practice. He is known throughout the community as independent, reputable and trustworthy. Through a combination of strong work ethics, determination and international exposure, his competence of Spanish Law is unparalleled and demonstrated through his fluency in English and Spanish.

1 Comment

  1. As usual Antonio comes up with a sensible solution to an intractable problem. Unfortunately it would not suit the auction house which would lose the “bidding frenzy” aspect that drives up prices and so their commissions. It would take an actual change in the law to force auctions of this type to be standard.
    Perhaps there is scope for another type of auction house to be run which is satisfied with modest profits but high turnover due to it’s honest ethics?

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Previous Story

Malaga is second top city in the world to visit in 2015

beckett list D Book
Next Story

Olive Press columnist Belinda Beckett releases online trip planner

Latest from Antonio Flores: Legal Problems

Go toTop

More From The Olive Press