I saw one foreclosure that failed to close because it was a shill bidder. He started bidding at about 375K and kept raising and then dropping out until his last bid was not advanced and he won the auction at 825K. Then he failed to close the deal and the property had to be resold. The price dropped from 800K plus to just over 400K on the resale. We knew what had happened and the second and third highest bidders both refused to take it at their last bid and both refused to bid at the resale.
Not only that but the second highest bidder, who buys and sells a lot of property in the area, explained to the auctioneer that a repeat of that shill bidding might be a very bad idea. Lawyers are cheap and the charge of rigged auctions will damage a auctioneers reputation beyond repair in small towns.
About 15 years ago I represented the county Sheriff in a case where a guy alleged his 1st Amendment rights had been violated because the Sheriff threw him out of sheriffs sales of foreclosed properties. Turned out the guy had been making hand signals to other bidders that they were to pay him $500 dollars or he would run the bidding up to where investors buying the foreclosed property was impractical, then walk out before the hammer came down. Since he had done it a couple times, everyone knew he was serious. I wanted to have him charged with extortion but the prosecutor wouldn't take the case. The clown's stated (in his deposition) objective was that he wanted to monopolize the foreclosure sales in that county. He had been a law student until he spent 3 years in the can on a Graves Act sentence for aggravated assault and had it in for the legal profession. This included having one of the county's attorneys as his girlfriend. We wound up getting his case dismissed but then the girlfriend-attorney managed to persuade the Sheriff to let the clown back into the auctions. He just got more subtle, but didn't change his overall game.
Crooked auctions happen. And collusion is just one of the things that go on. I think the OP has pointed out a clear case of collusion. (In fact, I wouldn't be surprised if that seller and buyer pair are relatives or married to each other.) You can bid on that guy's stuff but I won't. As I was saying the other day to someone, "thrift is an expression of self-respect. By work, you turn your time and effort into money. You only have so much time and effort while here, so if you waste it by profligacy or on junk, that just shows how little you value and respect your time and effort." The same applies for being a pigeon in a crooked auction.
