On most TV shows where there are auctions involved, at the start of the bidding the auctioneer will state that they have an advance bid for whatever sum has been lodged for it and they will start the bidding at that price. It is, after all, a properly tendered bid so they aren't going to start at a lower price are they?
I suspect the same thing has happened here - it's not fraud, it's perfectly legal and it's the way auctions work.