Real Estate Fraud: Investor Gregory Guzman Convicted for Bribing Sheriff’s Office Official for Auction Benefits
Real estate fraud is being uncovered at a rapid clip in the commercial real estate world. Market trends fluctuate much like the ebb and flow of ocean tides. And just as the receding tide reveals who’s been swimming naked, declining CRE values have a way of unearthing the fraudsters lurking beneath the surface.
“Everyone is Doing It”
House-flipper Gregory Guzman failed to evade justice using the “everyone is doing it” defense. Guzman, a prominent investor in Philadelphia’s real estate market, received a federal prison sentence of a year and a day. He was convicted for his illicit practice of bribing an official from the Sheriff’s Office to gain undue advantages during competitive auctions of confiscated and foreclosed properties, as stated by the Philadelphia Inquirer.
As the co-founder of Enterprise Properties, Guzman confessed to the distribution of over $9,000 worth of bribes, including free rent, cash payments, and dinners. This illegal activity benefited a former deputy under ex-Sheriff Jewell Williams between 2011 to 2013, per the media reports.
Result of a Decade Long Investigation into Guzman’s Fraud
Guzman’s legal counsel tried to influence U.S. District Judge Wendy Beetlestone by presenting a soft view of the alleged misconduct, asserting that it was a common practice among many people.
Contrary to the defense’s claim, the judge sternly stated, “Everybody does not — does not — do it,” further emphasizing the severity of Guzman’s real estate fraud and questioning his comprehension of the magnitude of his offense.
Guzman’s conviction marks the culmination of a ten-year investigation targeting corruption in the sheriff sale procedures. He is the final of three property speculators to face punishment for corrupting the same ex-deputy, Michael Riverso.
Riverso was given a prison sentence in 2019 after admitting to receiving over $40,000 in bribes from Guzman and other speculators. By offering preferential treatment to his select bidders through early access to property listings and expedited transaction processing, Riverso facilitated these investors to flip and profit from properties before making the due payment.
Key Factor in Sheriff’s Office Corruption
Assistant U.S. Attorney Sarah L. Grieb framed Guzman and Riverso’s real estate fraud as a key factor in fostering corruption within the Sheriff’s Office.
While acknowledging Guzman’s role in exposing the corrupt scheme, Grieb emphasized the significant damage the city of Philadelphia and the Sheriff’s Office had endured due to these crimes.
In his defense, Guzman’s attorney pointed out his client’s efforts towards restitution, including surrendering his real estate license, undergoing treatment for alcohol dependency, and paying a large amount of back taxes and restitution.
Judge Beetlestone, however, showed concern over the defense’s claim that the crimes had no intended victims. Despite clarifying his statement, Guzman’s attorney was interrupted by the judge who decided to bring the court proceedings to an end.