NJ Homeowner Files Suit Seeking Class Action Tagging Investor, Others With Allegations Of Bid Rigging At Tax Lien Auctions

In Camden, New Jersey, Bloomberg reports:

• M.D. Sass Investors Services Inc., a closely held manager of more than $5 billion, and a unit of U.S. Bancorp (USB) were sued in a racketeering lawsuit claiming they helped to rig New Jersey municipal tax lien auctions for a decade.



• The complaint by homeowner Raymond V. Contarino Jr. was filed March 30 against New York-based M.D. Sass, U.S. Bank, and four of six individuals who pleaded guilty in a U.S. antitrust investigation of rigged lien sales in New Jersey. It claims they engaged in a “cynical conspiracy” to eliminate competition at auctions.



• Contarino seeks to proceed in a group, or class-action, lawsuit for those “subjected to artificially inflated rates of interest on their tax liens, and, in some instances, a loss of their real property through tax lien foreclosure,” according to the complaint filed in federal court in Camden, New Jersey.



• Six people admitted in guilty pleas that they colluded at auctions where bidding for liens began at 18 percent and failed to move downward. Bidders won the right to charge 18 percent interest to property owners, and additional penalties. Three who pleaded guilty had bid at a March 2007 auction in Newfield, New Jersey, where an M.D. Sass representative also won liens.

For more, see M.D. Sass, U.S. Bancorp Sued Over Lien Sales Probed by U.S.