Thursday, July 07, 2016

Thousands Of S. Illinois Property Owners Seek Class Action Status In Civil Suit Alleging Bid-Rigging Conspiracy Involving Sales Of County Tax Liens; Victims Claim Racket Resulted In Inflated Costs To Redeem Their Real Estate & Avoid Foreclosure

In St. Clair County, Illinois, the Madison-St. Clair Record reports:
  • Thousands of property owners lost money due to bid rigging at St. Clair County courthouse, according to a class certification motion in a suit against county treasurer Charles Suarez and bidders he allegedly favored.

    Nelson Mitten of Clayton, Mo., filed the motion for Kevin Dvorak and Kathleen Dvorak in U.S. district court on June 15.

    They claim Suarez and buyers of delinquent property taxes conspired to award as many bids as possible at the maximum interest of 18 percent.

    Mitten wrote that for a property in O’Fallon, the Dvoraks paid $1,725.03 in interest on a $1,597.25 tax bill for 2007. For a property in Lebanon, they paid $2,018.22 in interest on a $1,868.72 tax bill for 2007.

    The class certification motion states that the histories of the properties were typical of the process and how it affected owners. All owners of parcels the county sold for unpaid taxes for tax years 2006 and 2007 are included in the proposed class.

    Mitten and associates previously obtained a class certification order in a Madison County circuit court action involving similar allegations.

    The Madison County order remains under advisement at the Fifth District appellate court in Mount Vernon, where a panel heard oral argument on June 21.

    Former Madison County treasurer Fred Bathon pleaded guilty of criminal antitrust violations in federal court in 2013.(1) He served time, as did tax buyers Barrett Rochman, John Vassen and Scott McLean.

    Rochman, Vassen and McLean stand as defendants in both civil suits, as do Kenneth Rochman, Dennis Ballinger Sr., Dennis Ballinger Jr., and Scott Sieron.

    The Dvoraks moved for class certification after District Judge Staci Yandle denied motions to dismiss their claims.

    Mitten wrote that the agreement of the defendants inflated the amounts owners paid to redeem their properties.
For more, see Property owners who lost money in St. Clair County delinquent property tax sales seek class certification.
(1) See U.S. Attorney press release: Former Madison County Treasurer Guilty of Structuring Property Tax Sales to Reward Campaign Contributors:
  • [B]athon structured the tax sales in a way that eliminated competitive bidding and allowed the tax buyers to engage in price fixing by only bidding the statutory maximum interest rate of 18 percent. In addition to awarding properties at non-competitive interest rates, Bathon also used a seating chart to ensure that his largest campaign contributors were recognized by the auctioneer as the winning bidder.

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