Bids Rigged in Lien Auctions
Tangel, Andrew, The Record (Bergen County, NJ)
A federal investigation into bid-rigging at auctions of municipal tax liens has snagged the owner of a Bergen County real estate company.
Robert E. Rothman, owner of the Englewood-based Rothman Realty Corp., admitted his role in the decade-long conspiracy and pleaded guilty in federal court in Newark on Tuesday in an agreement to cooperate with prosecutors.
Municipalities file liens when real estate owners fall behind on their property, water or sewer taxes. Municipalities then sell those liens at auction to investors, who pay the tax liability in full. They make money by collecting tax payments plus interest and possible penalties from the property owners. Lien holders can even foreclose on properties if taxes and other fees remain unpaid.
Bidders compete against each other by offering lower interest rates. But Rothman, an attorney who lives in New York, admitted that from 2000 to 2009 he and his co-conspirators predetermined "which tax liens each would bid on," a practice that could keep interest rates high.
"The Antitrust Division's investigation into municipal tax lien auctions is ongoing and active," Sharis A. Pozen, acting assistant attorney general in charge of the Department of Justice's Antitrust Division, said in a statement. "The division will not tolerate this kind of illegal conduct that harms distressed homeowners."
The Justice Department did not respond to requests for comment. A criminal information filed in the case did not specify which New Jersey municipalities held auctions involved. …