A used car auction company accused of rigging bids and fraud agreed to pay a $3.28 million fine through a deferred prosecution agreement with the U.S. Justice Department.
According to the Justice Department, the EBLOCK Corporation acquired an online auction platform based in California in November 2020. From November 2020 to February 2022, the auction allegedly conspired with another company to “suppress and eliminate” competitors for vehicles sold on the online platform. The auction was also reported to have taken part in “shill bidding,” the placement of fake bids to artificially increase the sales prices for used vehicles.
“EBLOCK is charged with entering into and engaging in conspiracy through individuals who became employees of EBLOCK as a result of an asset acquisition, to suppress competition by rigging bids and pooling profits in online used vehicle acquisitions,” said court documents filed in the United States District Court for the Central District of California.
Deputy Assistant Attorney General Omeed Assefi of the Justice Department’s Antitrust Division estimated the scheme tallied nearly $16 million.
The U.S. Postal Inspection Service was involved in the investigation as documents were sent through the U.S. Mail during the alleged scheme.
Along with the fine, EBLOCK has agreed to “undertake remedial measures, including implementing an appropriate compliance program and cooperating with the Justice Department’s ongoing criminal investigation and any resulting prosecutions.”
The Justice Department disclosed a $1 million reward to a whistleblower for reporting the alleged criminal activity to the Justice Department.
