Investors Made Millions from People Facing Eviction

By Fred Schulte
Huffington Post Investigative Fund

Created 2010-05-18 08:00

‘Crime of Greed’ Deprived Local Governments of Revenue, Prosecutors Allege

A six-year conspiracy by veteran real estate investors to rig bids and stifle competition at tax sale auctions made two chief organizers at least $10 million, largely from fees homeowners paid to keep from losing their properties, according to federal prosecutors.

Though many details remain under seal in U.S. District Court in Baltimore, prosecutors allege that from 2002 through 2007 the pair acted to corrupt nearly two dozen municipal tax sales in Baltimore and five other Maryland jurisdictions, including Montgomery and Prince George’s counties in the Washington, D.C. suburbs.

Every year, local governments in Maryland sell investors the right to collect unpaid taxes and municipal fees, often for a few hundred dollars or less. Lien holders can sue to take the property of those who fail to pay them.