However, neither Giraudo nor Cullinane have identified a case or treaty supporting the thesis that the damage caused by the manipulation of bids can only be measured on the basis of the amount of payment that was granted in exchange for a commitment not to make an offer. In fact, there is good reason to believe that the price that real estate would have sold in a clean market is higher than the combination of the purchase price and the payment — perhaps much higher. On the one hand, no reasonable bidder – and Giraudo had decades of experience in real estate transactions in general and execution auctions in particular – would choose to make a profit to another bidder equal to the market price, minus the purchase price. If the necessary payment were so large, the bidder would simply purchase the property at market price. There is evidence that this is exactly how the members of the conspiracy watched the auction. See below. 307-7 at 3 a.m. (“Fong was not concerned about payment agreements as long as the total amount of property, including payment, was equal to or less than the amount that Fong was willing to pay for real estate prior to the fiduciary sale”) 3 To date, more than 100 people have been charged. In California cases that focus on auctions in San Francisco, San Mateo, Alameda and Contra Costa counties, more than 50 defendants have pleaded guilty.
The guidelines include, among other things, improvements based on the size of the trade involved, No. 2R1.1 (b) (2), and the defendant`s role in the infringement, item 2R1.1, note 1. They also provide for an improvement of one point, “[i]i. behaviour involving participation in an agreement to bid non-competitive bids.” The accused Joseph Giraudo and Kevin Cullinane violated the criminal offences under the Sherman Antitrust Act, 15 U.S.C. Unlike the other 21 defendants in this case and related cases, Giraudo and Cullinane did not enter into pleas with the government. It is not surprising that they are challenging the government`s calculation of the appropriate level of sanction, in accordance with U.S. criminal guidelines. The level of the sentence determines the length of the recommended sentence of imprisonment in accordance with the guidelines. The Heffernan panel stated that the improvement in bid manipulation in Section 2R1.1 is intended to identify the scenario in which a defendant agrees not to make an offer, “so he has not made a sale, so he has no trading volume.” Id.; See also U.S.S.G. 2R1.1 Note 6.
The panel found that the improvement was not applicable in the circumstances of this case, in which the defendants agreed to make offers to that effect. Heffernan, 43 F.3d at 1147-50. Giraudo`s case is easy to distinguish: He has often agreed not to offer. Heffernan made no difference between cases where the agreement not to offer involves a payment, and cases where this is not the case – and such a distinction would not make sense. In both cases, the part on the other side of the transaction is damaged because the offer of profits is artificially high or low; but the calculation of the volume of trade does not take this fact into account in relation to the party that does not offer. And there are other reasons why agreements on the submission of non-competitive bids tend to be more damaging than bid agreements or bids. See Part II.A.1.b.; see also Heffernan, 43 F.3d to 1149. To the extent that Giraudo argues that the manipulation of the offer was not particularly prejudicial in this case in relation to a manipulation of the offer which does not involve any payment, this argument is therefore not available.