Two Baltimore Businessmen Indicted for Conspiring to Rig Bids at Maryland Tax Lien...

Two Baltimore Businessmen Indicted for Conspiring to Rig Bids at Maryland Tax
Lien Auctions

WASHINGTON, June 16 /PRNewswire-USNewswire/ -- Two Baltimore businessmen were
indicted today for conspiring to rig bids at tax lien auctions in Maryland for
more than five years, the Department of Justice announced today.

The one-count felony indictment filed today in the U.S. District Court in
Baltimore alleges that Harvey M. Nusbaum and his business partner, Jack W.
Stollof, participated in a conspiracy to rig bids in tax lien auctions
conducted by the city of Baltimore and various counties in the state of
Maryland beginning in or around the Spring of 2002 and continuing until at
least Aug. 9, 2007. The indictment alleges that Nusbaum, Stollof and their
co-conspirators agreed among themselves which of them would bid on specific
tax liens or groups of tax liens, and agreed upon specific prices to be bid in
certain auctions.

"With so many homeowners struggling these days, it is more important than ever
that all aspects of real estate transactions, including tax lien auctions,
remain competitive and free from collusion," said Scott D. Hammond, Deputy
Assistant Attorney General for Criminal Enforcement of the Department's
Antitrust Division. "The Antitrust Division will vigorously prosecute those
who rig bids and deny Americans a competitive bidding process."

When owners of real property in Maryland fail to pay property taxes, the
county or city in which the property is located may attach a lien. If the
taxes remain unpaid after a waiting period, the lien is sold at auction. The
winner of the auction has the right to collect the amount of the lien from the
delinquent taxpayer, along with interest, and eventually to foreclose on the
property if the lien and interest remain unpaid. Counties and municipalities
in Maryland typically hold tax lien auctions annually.

The indictment alleges that Nusbaum and Stollof carried out the bid-rigging
conspiracy with co-conspirators by:

-- Attending meetings and engaging in discussions regarding bids for tax
liens being auctioned by a municipality and counties in Maryland;
-- Agreeing during those meetings and discussions not to compete at
certain
tax lien auctions by allocating which tax liens, properties, or groups
of properties each group would bid or refrain from bidding on, and by
agreeing on prices that would be bid in certain auctions;
-- Discussing and exchanging prices to be bid at certain tax lien
auctions
so as not to submit higher bids than one another;
-- Submitting bids in accordance with the agreements reached; and

-- Purchasing tax liens under those agreements at collusive and
non-competitive prices.

This case is the result of an ongoing investigation by the Antitrust
Division's National Criminal Enforcement Section and the FBI into
anticompetitive conduct at tax lien auctions. In June of 2008, Steven L.
Berman pleaded guilty to the same conspiracy. He has not yet been sentenced.

Nusbaum and Stollof are each charged with one count of bid rigging in
violation of the Sherman Act, a violation which carries a maximum sentence of
10 years in prison and a fine of $1 million for individuals. Under the
statute, the maximum fine may be increased to twice the gain derived from the
crime or twice the loss suffered by the victims of the crime, if either of
those amounts is greater than the statutory maximum fine.

Anyone with information concerning bid rigging or other anticompetitive
conduct regarding tax lien auctions is urged to call the Antitrust Division's
National Criminal Enforcement Section at 202-305-1878, or the FBI's Baltimore
Office at 410-265-8080.

SOURCE U.S. Department of Justice

U.S. Department of Justice Office of Public Affairs, +1-202-514-2007, TDD,
+1-202-514-1888