Monday, March 13, 2017

3 PEOPLE INJURED AFTER MASSIVE FIRE DESTROYS 3-STORY HOUSE IN NORTH PHILADELPHIA







MARCH 13, 2017

NORTH PHILADELPHIA (WPVI) -- Officials tell Action News two people were injured in a house fire in North Philadelphia.

The blaze was reported at 8:20 a.m. Monday at a home in the 3500 block of North 23rd Street.

Video from Chopper 6 HD showed heavy flames breaking through the roof of the home and multiple firefighting units on the scene battling the blaze.

Action News is told firefighters rescued three people, and police officers pulled two others from the burning home.

Two of those rescued were taken to area hospitals in stable condition.

There was no immediate word on the victims' ages or the extent of injuries they suffered.


Fire investigators are working to determine what sparked the blaze. 

The homeowner believes a heater was placed too close to a mattress, and may have caused the blaze.


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PHILADELPHIA (CBS) — It was just after 8 a.m. when emergency responders were called to a three-story house fire, along North 23rd Street in North Philadelphia. The home had several apartments inside.

Firefighters had to rescue at least one person from an apartment inside.

A total of three people were injured and taken to the hospital.

At one point during the intense fire, firefighters were forced to evacuate the home.

Authorities say the roof started to collapse.

The fire burned for about an hour-and-a-half and was put under control around 9:30 a.m.

The homeowner describe the damage to the home as a total loss.

“Another cold morning, another busy morning for the Philadelphia Fire Department and another incredible job by our firefighters and medics rescuing some folks,” said Philadelphia Fire Commissioner Adam Thiel.

The cause of the house fire is still being investigated. The homeowner believes a heater was placed too close to a mattress, and may have caused the blaze.

The homeowner says she has insurance.

Tenants who rented apartments are being helped by the Red Cross and Salvation Army.

The three people injured in the fire are said to be doing OK.

CORRUPTION IN NEW JERSEY'S JUDICIARY AND LEGAL SYSTEM: Passaic County prosecutor and Judge collude and throw innocent man in jail after he discovered conspiracy against him by Passaic County sheriffs




Dr. Basilis N. Stephanatos, Ph.D., P.E., J.D., Q.E.D.


THE SERIOUSLY UNCONSTITUTIONAL CASE OF STATE V. BASILIS STEPHANATOS


Tax foreclosure companies in New Jersey (American Tax Funding, LLC, and others see for example this link: https://www.justice.gov/opa/pr/two-new-jersey-investors-plead-guilty-their-roles-bid-rigging-schemes-municipal-tax-lien) failed to follow the Anti-eviction laws and the Summary Dispossess Act and obtained a writ for removal without a hearing before a law-division judge - they basically used a self-certification and fooled the Office of Foreclosure in Trenton that had no jurisdiction over his real estate property as he had objected to the legal proceedings and no issues were ever adjudicated.


American Tax Funding, LLC, Robert Del Vecchio, Esq. and others also lied to the sheriff that he had threatened them with violence if they try to evict him from his home that he fully owned (no mortgage on the home). The sheriff then lied to the grand jurors that he displayed a gun at them and lied that they were injured.


In any event, five years ago, the grand jury indicts Dr. Stephanatos based on the fraudulent grand jury presentation and the willful failure to disclose to the Grand Jury clearly exculpatory evidence. In 2011, Dr. Stephanatos asked for speedy trial, but that never happened.


In early 2016, Dr. Stephanatos had been publishing in a blog the proceedings of the meritless criminal case against him. Based on the publishing, a good Samaritan came forward who provided evidence that Dr. Stephanatos was framed by Passaic County sheriff officers Lucas and d'Agostino. In his blog, Dr. Stephanatos has been complaining about the violation of hisspeedy trial rights: the delay of the case is now at 5.5 years and running!


In March 2016, and in order to prevent the spreading of the truth, the Passaic county prosecutor, Peter Roby, then claimed that Dr. Stephanatos was crazy and that he must be submitted for psychiatric evaluation. He also claimed that the State’s witnesses could be threatened by Dr. Stephanatos.



Dr. Stephanatos' lawyer, Mr. Miles Feinstein, Esq of Clifton, NJ vehemently opposed the incarceration as violative of his first amendment rights, etc. In any event, they locked him up at the Bergen county jail from March 21, 2016 through May 25, 2016. During the last two weeks of his jail time, a state physiologist came and evaluated him. He found him intelligent, sane and competent. When Dr. Stephanatos asked him why it took them two months to show-up at the jail to evaluate him, he said he only got the assignment during the last week of April 2016.



Dr. Stephanatos then filed a complaint against judge de la Carrera (the judge who ordered his incarceration) with the presiding judge Ernest Capossela. Judge Capossela immediately dismissed Judge de la Carrera from the case and started presiding over the case on his own. He said that what de la Carrera and Passaic county prosecutor, Peter Roby, did was illegal and unconstitutional, as no threats were ever made by Dr. Stephanatos against anyone. All this stuff is in on the record. He made these statements and much more in open court on May 26, 2016 when he ordered Dr. Stephanatos' release.


After more than five years on bail, the accuser, Ronald A. Lucas (a sheriff employee) is convicted for insurance fraud for faking his injury. The judge in Dr. Stephanatos' case is fired by the assignment judge, who then proceeds to dismiss the case for a number of reasons: violation of speedy trial rights, perjured testimony, failure to provide discovery, misleading the grand jury, prosecutorial misconduct.


Dr. Stephanatos suffered significant economic and non-economic losses. Many millions in damages.

In addition to the loss of his freedom and the loss of his dignity, he also lost income, family time, etc. You can understand.



The criminal case against Dr. Stephanatos is meritless, that is why it has been delayed for 5.5 years and counting. They have not even provided discovery!



Here are some links regarding Dr. Stephanatos' criminal case:

http://metroforensics.blogspot.com/2016/03/explosive-bombshell-ronald-lucas.html

https://metroforensics.blogspot.com/2016/03/proofs-that-ron-lucas-was-not-at-scene_17.html

http://metroforensics.blogspot.com/2015/12/perjured-employees-and-prosecutorial.html

http://metroforensics.blogspot.com/2016/03/is-passaic-county-sheriff-richard_13.html

http://metroforensics.blogspot.com/2016/03/the-corrupt-andor-incompetent-chancery.html

http://metroforensics.blogspot.com/2016/01/walter-dewey-jr-of-passaic-county_14.html

https://sites.google.com/site/metropolitanenvironmental/explosive-bombshell-ronald-a-lucas-defrauded-new-jersey-s-police-and-firemen-system-by-claiming-that-he-suffered-on-the-job-injury




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FORMER PASSAIC COUNTY SHERIFF OFFICER RONALD A. LUCAS LIED DURING HIS GRAND JURY TESTIMONY WHEN HE CLAIMED THAT HE INJURED HIS LEFT SHOULDER DURING A FALL AT A WAYNE TOWNSHIP, NEW JERSEY PROPERTY. HE IN FACT HAD PRIOR INJURIES BY PLAYING FOOTBALL FOR MANY YEARS AND LIFTING WEIGHTS

As part of an investigation we have been performing, we discovered that Ronald A. Lucas, a former Passaic County sheriff officer with the Civil Division lied about his on-the-job shoulder injury. Lucas claimed that he fell on the job on June 28, 2011 at 687 Indian Road, Wayne, NJ and that he injured his left shoulder requiring several pins. He then filed a disability claim with the New Jersey Division of Pensions and Benefits (Police and Firemen Retirement System). He was granted disability for one year with subsequent review. After he retired with claimed disability, he obtained a job as part-time security guard at the Pequannock High School.

We discovered that Mr. Lucas suffered shoulder injuries while playing football and lifting heavy weights over his lifetime. He was a linebacker with the Pompton Lakes Cardinals, using his shoulder to hit and tackle his opponents during practice and during football games. We are attaching a picture showing that he was #41 in the Cardinal’s Pompton Lake football team. Lucas has fallen on his shoulder probably thousand times during his athletic and training career.

Everybody knows that linebackers hit and tackle their opponents using their shoulders. These athletes also lift heavy weights and they end-up injuries their shoulders. He even made the All County Team in 1980, showing how hard he was working out. Based on our investigation, we found that weight lifting athletes do suffer shoulder injuries of the type claimed by Lucas.

He also trained his two sons (Dean Lucas and Ronnie Lucas) into playing TE and DE positions also with the Cardinals football team. In fact, linebackers suffer at least 13.5 percent of all football injuries and at least 65 percent of the linebackers end up undergoing surgery.

We have obtained photos showing Mr. Lucas lifting weights, after his alleged job-ending disability. See for example the attached image that is dated December 2013.

It is obvious to a reasonable and objective person that Lucas (in his mid-50s) took this incident on June 28, 2011 to claim on-the job-injury to be able to repair his previously injured shoulder at taxpayers’ expense and to retire and then blame Basilis Stephanatos for his injuries. After he retired, he started the double dipping. The finest of New Jersey at "work". But he was caught and he will face the consequences.



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FOR IMMEDIATE RELEASE
Monday, September 30, 2013
Two New Jersey Investors Plead Guilty for Their Roles in Bid-rigging Schemes at Municipal Tax Lien Auctions
Investigation Has Yielded 14 Guilty Pleas


Two financial investors who purchased municipal tax liens pleaded guilty today for their roles in a conspiracy to rig bids at auctions conducted by New Jersey municipalities for the sale of those tax liens, the Department of Justice announced.

A felony charge was filed today in U.S. District Court for the District of New Jersey in Newark, against Robert U. Del Vecchio Sr., of Hawthorne, N.J. According to the charge, from in or about 2000 until approximately December 2008, Del Vecchio Sr. participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on. Additionally, a felony charge was filed today in the U.S. District Court for the District of New Jersey in Newark, against Michael Mastellone, of Cedar Knolls, N.J. for participating in a similar conspiracy from in or about 2000 until approximately February 2009. The department said that Del Vecchio Sr. and Mastellone proceeded to submit bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.

“By conspiring to rig the bids of municipal tax liens, the conspirators profited at the expense of those already struggling financially,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “Protecting Americans from these types of bid-rigging schemes remains a high priority for the division.”

The department said the primary purpose of the conspiracy was to suppress and restrain competition in order to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. State law requires that investors bid on the interest rate delinquent property owners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.

According to the court documents, Del Vecchio Sr. and Mastellone were involved in the conspiracy with others not to bid against one another at municipal tax lien auctions in New Jersey. Since the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition, the department said.

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than the $1 million statutory maximum.

Today’s pleas are the 13th and 14th guilty pleas resulting from an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions. Nine individuals – Isadore H. May, Richard J. Pisciotta Jr., William A. Collins, Robert W. Stein, David M. Farber, Robert E. Rothman, Stephen E. Hruby, David Butler and Norman T. Remick – and three companies – DSBD LLC, Crusader Servicing Corp. and Mercer S.M.E. Inc. – have previously pleaded guilty as part of this investigation.

Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.

This ongoing investigation is being conducted by the Antitrust Division’s New York Office and the FBI’s Atlantic City, N.J., office. Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the Atlantic City Resident Agency of the FBI at 609-677-6400.



6 Virginia people have been arrested for their alleged roles in an insurance fraud scheme that involved setting 30 fires.


RICHMOND, Va. — Virginia prosecutors say six people have been arrested for their alleged roles in an insurance fraud scheme that involved setting 30 fires.

Federal prosecutors say the defendants over the course of 16 years set fire to homes, trailers, mobile homes and cars they bought at auction or in foreclosure in order to collect insurance proceeds.

Prosecutors say the defendants also made false statements to insurance companies, firefighters and law enforcement officers. The payouts for each fire ranged from $1,000-$300,000, totaling a combined sum of roughly $900,000.

The defendants are: 72-year-old Verdon Taylor, 37-year-old Vershawn Jackson, 58-year-old Sylvia Mitchell, 54-year-old Marie Taylor, 32-year-old Dorel Watson and 57-year-old Eugenia Fleming. They were all arrested on Thursday.



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Locals involved in 16-year, fire-setting insurance fraud

By BRANDON SHULLEETA Richmond Times-Dispatch
Mar 10, 2017



Richmond and Henrico County residents were among six arrested Thursday in connection with 30 fires allegedly set to fraudulently collect nearly $1 million in insurance payments.


A federal indictment claims the fraud — which involved fires set to properties in Richmond, Henrico and Florida — began as early as 2000 and continued until as recently as November 2016.


“The details of each fire vary, but the frequent pattern was for the defendants allegedly to buy a car or home at auction or in foreclosure, insure it, and then collect insurance proceeds in excess of the purchase price after it burned,” the U.S. Attorney’s Office for the Eastern District of Virginia stated in a news release Friday.


At the center of the alleged fraud was Verdon Taylor, 72, of Leesburg, Fla.


His son, Vershawn Jackson, 37, of Sandston, was the first person known to be involved, nearly 17 years ago, in what became dozens of cases of insurance fraud in the years since, according to the indictment. Jackson was issued a check from Nationwide for $5,228.25 in May 2000 for fire damage to his Cadillac, the indictment states, and then a series of insurance claims continued in subsequent years.


Claims were made by the father and son for various things that caught fire, including cars and homes, the indictment states.


Taylor’s girlfriend, Marie Taylor, 54, of Richmond, also became a part of the fraud, federal investigators allege.


The indictment lists numerous cases of defendants in the alleged conspiracy buying fire insurance with different insurance companies, lying about their records of fire insurance claims, then submitting insurance claims for things they intentionally burned.


Last month, Verdon Taylor had a phone conversation with an unidentified man in which the man informed Taylor that he had been contacted by the Bureau of Alcohol, Tobacco, Firearms and Explosives about some fires, according to court records.


“Tell those people to get out your face,” Verdon Taylor responded, according to court records.


Taylor advised the man to hang up the phone whenever agents called him, according to the court record.


The indictment was unsealed in federal court Friday.

LIRR TRAIN COLLIDES WITH CAR NEAR THE WESTWOOD STATION IN MALVERNE, NY



MALVERNE, NY — An LIRR train smashed into a car with a passenger inside Monday morning, LIRR officials said.

The West Hempstead Branch was suspended in both directions following the collision near Westwood Station in Malverne.

Customers were advised to use alternate branches, such as the Hempstead or Far Rockaway branches, or alternate stations, such as Lynbrook or Valley Stream.

It is not yet clear what caused the crash. The train and car collided around 7:15 a.m.

As of 8:40 a.m., train passengers were still being evacuated. It does not seem as if any of them were injured. The evacuated passengers were being brought to nearby school buses.

The 44-year-old male driver of the car was taken to the hospital. No information is available on his condition. Identifying information is not yet available for the man.

Officials inspected the third rail of the track to see if there was any sign of damage.





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WEST HEMPSTEAD, Long Island (WABC) -- The LIRR West Hempstead Branch is suspended in both directions after an unauthorized vehicle on the tracks was struck by a train Monday morning near Westwood Station.

The train struck the car at the Franklin Avenue crossing in Malverne. The driver of the vehicle was removed and taken to the hospital.

At least 200 people were on the train. The LIRR will remove them onto buses.

LIRR personnel are on the scene assessing possible third rail damage.

The train was the 6:53 a.m. from West Hempstead, due at Atlantic Terminal at 7:41 a.m.

Customers are advised to use alternate branches, such as the Hempstead or Far Rockaway branches, or alternate stations, such as Lynbrook or Valley Stream.

FRAUD AND CORRUPTION IN NEW JERSEY: James Jeffers Jr., of Mount Holly, New Jersey, was sentenced a Year in Prison for Bid Rigging at Tax Lien Auctions


FOR IMMEDIATE RELEASE
Tuesday, March 29, 2016
Judge Orders New Jersey Investor to Serve a Year in Prison for Bid Rigging at Tax Lien Auctions


Thirteen Individuals and Three Companies Have Been Convicted or Pleaded Guilty in the Investigation to Date

A former bidder for a Pennsylvania tax liens investment company was sentenced to serve a prison term of 12 months and one day and pay a $25,000 criminal fine for conspiring to rig bids at New Jersey tax lien auctions, the Department of Justice announced today.

James Jeffers Jr., of Mount Holly, New Jersey, was sentenced today by U.S. District Judge Susan D. Wigenton of the District of New Jersey. Jeffers was convicted by a jury on Oct. 2, 2015 after a multi-week criminal trial. The jury found Jeffers guilty of violating Section One of the Sherman Act by conspiring to allocate and rig bids at municipal tax lien auctions that were held in the state of New Jersey from at least 1998 until at least February 2009. Jeffers’s conviction resulted from his conduct as a bidder for Crusader Servicing Corp., which pleaded guilty in September 2012 to participating in the same conspiracy. Jeffers also bid for Crusader’s successor company during the conspiratorial period.

Jeffers participated with others in the conspiracy not to bid against one another at municipal tax lien auctions. Since the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition, the department said.

Today’s charge is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. For more information on the task force, visit www.stopfraud.gov.

This ongoing investigation is being conducted by the Antitrust Division’s New York Office and the FBI’s Atlantic City, N.J., office. Including Jeffers, a total of thirteen individuals and three companies have been convicted or have pleaded guilty as part of the investigation. Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the Atlantic City Resident Agency of the FBI at 609-677-6400. 


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NJ Investor Gets Probation For Tax Lien Bid-Rigging Scheme


Law360, New York (April 22, 2016, 6:54 PM EDT) -- A financial investor was sentenced by a New Jersey federal judge Thursday to one year probation and ordered to pay a $20,000 fine for his participation in a scheme to rig bids at municipal tax lien auctions. 

At a hearing in Newark, U.S. District Judge Susan D. Wigenton sentenced William A. Collins, of Medford, New Jersey, to one year of probation and ordered him to pay a $20,000 fine, due immediately, for Sherman Act conspiracy. A brief minute order reporting the sentence did not include further information.

Collins waived his right to prosecution by indictment in August 2011. The same month, he pled guilty to one count of violating Section One of the Sherman Act. Such a violation carries a maximum penalty of 10 years in prison and a $1 million fine.

According to court records, from 2003 to 2009, Collins and co-conspirators took part in a scheme to “suppress and eliminate competition” by submitting collusive and noncompetitive bids at municipal public auctions for tax liens.

The federal government alleged Collins and his co-conspirators allocated which tax liens they would each bid on or refrain from bidding on. Their coordination allowed them to purchase homeowners' liens at noncompetitive prices with artificially high interest rates, the DOJ said in a previous news release.

If a property owner fails to pay taxes on that property, the municipality can attach a lien for the amount of the unpaid taxes, which may be sold at auction after a certain time, the DOJ said. Investors then bid on the interest rate the homeowners will pay when the lien is settled

At tax lien auctions in New Jersey, the interest rate starts at the statutory maximum of 18 percent and can be driven down through the bidding process, according to the DOJ.

If the lien remains unpaid after a certain time, the investors can begin foreclosure proceedings, the DOJ said.

The government’s charges against Collins came in part of a larger investigation into bid rigging or fraud related to municipal tax lien auctions.

Last month, Judge Wigenton sentenced James Jeffers Jr. of Mount Holly, New Jersey, to one year and one day in prison and ordered payment of a $25,000 fine after a jury found him guilty of violating Section One of the Sherman Act by agreeing not to bid against others in order to drive up interests rates on the tax debts of property owners while working for Crusader Servicing Corp., as well as its successor company.

Representatives for the parties did not respond immediately to requests for comment Friday.

Collins is represented by Jack Wenik of  Epstein Becker & Green PC.

The government is represented by Grace Pyun, John Williams, Van Lonkhuyzen, Steven Tugander, Charles Vincent Reilly,
Debra Brookes, Kristina N.V. Srica and Stephanie Anne Raney of the U.S. Department of Justice.

The case is USA v. Collins, case number 2:11-cr-00563, in the U.S. District Court for the District of New Jersey.

--Additional reporting by Hannah Sheehan, Caroline Simson, Alex Lawson, Vidya Kauri, Alex Wolf and Shayna Posses. Editing by Kelly Duncan. 


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Objector Appeals $9.6M Settlement In NJ Bid-Rigging Suit


Law360, Washington (October 27, 2016, 3:02 PM EDT) -- A class member in a New Jersey federal suit filed a notice of appeal with the Third Circuit on Wednesday over the $9.6 million settlement of a municipal tax lien auction-rigging suit, which she has described as inadequate, improperly executed and unfairly distributed.
Arlene M. Davies indicated she will appeal a New Jersey federal judge’s Sept. 30 order granting a class settlement between New Jersey property owners and individuals accused of rigging auctions for municipal tax liens to keep interest rates artificially high.

Davies came out against the proposed settlement last year, claiming it gave preferential treatment to home owners facing current liens and fell woefully short of the $100 million to $200 million in fraud that they claim the defendants perpetuated for more than a decade.

New Jersey District Judge Michael Shipp approved a $9.6 million in settlements, plus attorneys' fees, on Sept. 30 over objections from Davis and fellow class member Jerilean Roberts. Addressing the objections over the size of the settlement reached without formal discovery, the decision stated that the significant risks entailed in attempting to establish liability and damages and maintain a class action justified a settlement representing a small fraction of the total possible recoverable amount estimated by Davies.

The decision also noted that out of an estimated class of thousands of members, only Davies and Roberts objected to the settlement.

According to court filings, New Jersey law allows the auctioning of tax liens that remain unpaid after a waiting period. The law requires that investors bid on the interest rate that delinquent property owners will pay upon redemption, starting with an 18 percent rate that is reducible to zero through a competitive bidding process.

The class claimed the defendants began conspiring in 1998 to allocate the liens among themselves and not bid against each other in order to make sure the interest rates remained at the legal maximum of 18 percent. The collusion forced thousands of property owners to pay artificially high interest rates on their tax sale certificates, the plaintiffs argued.

A U.S. Department of Justice probe of the scheme secured more than a dozen guilty pleas.

Lead plaintiffs in the case slammed Davies and other objectors to the settlement last April, claiming they lodged their objections to a proposed settlement too late for the plaintiffs to respond despite years of complaining over the settlement.

Representatives for the parties could not immediately be reached for comment.

Davies is represented by Dennis J. Drasco of Lum, Drasco & Positan LLC, Hays Gorey Jr. of Geyer & Gorey LLP, Steven F. Molo, Thomas J. Wiegand, Justin B. Weiner and Rayiner I. Hashem of MoloLamken LLP.

Counsel information for the defendants was not available Thursday.

In RE: New Jersey TAX Sales Certificates Antitrust Litigation, case number 3:12-cv-01893-mas-tjb, in the U.S. District Court for the District of New Jersey.




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SIX INVESTORS INDICTED FOR THEIR ROLES IN BID RIGGING SCHEME AT MUNICIPAL TAX LIEN AUCTIONS IN NEW JERSEY


Investigation Has Yielded 20 Charges to Date

WASHINGTON — A federal grand jury in Newark, N.J., returned an indictment against six investors for their roles in a conspiracy to rig bids at auctions conducted by New Jersey municipalities for the sale of tax liens, the Department of Justice announced.

The indictment, filed today in U.S. District Court for the District of New Jersey in Newark, charges four individuals, Joseph Wolfson, Gregg Gehring, James Jeffers Jr. and Robert Jeffrey, and two entities, Betty Simon Trustee LLC and Richard Simon Trustee, with participating in a conspiracy to rig bids at tax lien auctions in New Jersey. According to the indictment, from at least as early as 1998 and continuing until as late as February 2009, the investors participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on. The indictment alleges that the investors proceeded to submit bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.

Joseph Wolfson, of Margate, N.J., was a part-owner of two entities that invested in municipal tax liens, Betty Simon Trustee and Richard Simon Trustee, both of Northfield, N.J. Gregg Gehring, of Newton, N.J., was employed by a major tax lien investment company as a vice president. James Jeffers Jr., of Burlington, N.J., was a bidder for Crusader Servicing Corp., which pleaded guilty to its role in the conspiracy in September 2012, and also a bidder for Crusader’s successor corporation. Robert Jeffrey, of Bradenton, Fla., was a bidder for both Crusader and its successor corporation.

“The individuals and entities charged today demonstrated a blatant disregard for the competitive process by allocating the purchase of certain municipal tax liens by, from time to time, flipping a coin, drawing numbers out of a hat or drawing from a deck of cards,” said Leslie C. Overton, Deputy Assistant Attorney General for the Antitrust Division. “The Antitrust Division remains committed to prosecuting those who thwart the competitive bidding process.”

The department said that the primary purpose of the conspiracy was to suppress and restrain competition in order to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. State law requires that investors bid on the interest rate delinquent property owners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached. Since the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition, the department said.

The indictment alleges, among other things, that from at least as early as 1998 and continuing until as late as February 2009, prior to the commencement of certain tax lien auctions in New Jersey, the investors and their co-conspirators agreed not to compete for the purchase of certain municipal tax liens.

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the $1 million statutory maximum.

Including today’s charges, 20 individuals and entities have been charged as part of an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions in New Jersey. To date, 11 individuals – Isadore H. May, Richard J. Pisciotta Jr., William A. Collins, Robert W. Stein, David M. Farber, Robert E. Rothman, Stephen E. Hruby, David Butler, Norman T. Remick, Robert U. Del Vecchio Sr., and Michael Mastellone – and three companies, DSBD LLC, Crusader Servicing Corp., and Mercer S.M.E. Inc., have pleaded guilty aspart of this investigation.

Today’s charge is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

This ongoing investigation is being conducted by the Antitrust Division’s New York Field Office and the FBI’s Atlantic City, N.J., office. Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Field Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the Atlantic City Resident Agency of the FBI at 609-677-6400. 



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Two New Jersey Investors Plead Guilty for Their Roles in Bid-rigging Schemes at Municipal Tax Lien Auctions

Two financial investors who purchased municipal tax liens pleaded guilty today for their roles in a conspiracy to rig bids at auctions conducted by New Jersey municipalities for the sale of those tax liens, the Department of Justice announced.


A felony charge was filed today in U.S. District Court for the District of New Jersey in Newark, against Robert U. Del Vecchio Sr., of Hawthorne, N.J. According to the charge, from in or about 2000 until approximately December 2008, Del Vecchio Sr. participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on. Additionally, a felony charge was filed today in the U.S. District Court for the District of New Jersey in Newark, against Michael Mastellone, of Cedar Knolls, N.J. for participating in a similar conspiracy from in or about 2000 until approximately February 2009. The department said that Del Vecchio Sr. and Mastellone proceeded to submit bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.

“By conspiring to rig the bids of municipal tax liens, the conspirators profited at the expense of those already struggling financially,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “Protecting Americans from these types of bid-rigging schemes remains a high priority for the division.”

The department said the primary purpose of the conspiracy was to suppress and restrain competition in order to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. State law requires that investors bid on the interest rate delinquent property owners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.

According to the court documents, Del Vecchio Sr. and Mastellone were involved in the conspiracy with others not to bid against one another at municipal tax lien auctions in New Jersey. Since the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition, the department said.

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than the $1 million statutory maximum.

Today’s pleas are the 13th and 14th guilty pleas resulting from an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions. Nine individuals – Isadore H. May, Richard J. Pisciotta Jr., William A. Collins, Robert W. Stein, David M. Farber, Robert E. Rothman, Stephen E. Hruby, David Butler and Norman T. Remick – and three companies – DSBD LLC, Crusader Servicing Corp. and Mercer S.M.E. Inc. – have previously pleaded guilty as part of this investigation. Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.

This ongoing investigation is being conducted by the Antitrust Division’s New York Office and the FBI’s Atlantic City, N.J., office. Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the Atlantic City Resident Agency of the FBI at 609-677-6400.





===============


  Justice News

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Monday, September 30, 2013
Two New Jersey Investors Plead Guilty for Their Roles in Bid-rigging Schemes at Municipal Tax Lien Auctions
Investigation Has Yielded 14 Guilty Pleas


Two financial investors who purchased municipal tax liens pleaded guilty today for their roles in a conspiracy to rig bids at auctions conducted by New Jersey municipalities for the sale of those tax liens, the Department of Justice announced.

A felony charge was filed today in U.S. District Court for the District of New Jersey in Newark, against Robert U. Del Vecchio Sr., of Hawthorne, N.J. According to the charge, from in or about 2000 until approximately December 2008, Del Vecchio Sr. participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on. Additionally, a felony charge was filed today in the U.S. District Court for the District of New Jersey in Newark, against Michael Mastellone, of Cedar Knolls, N.J. for participating in a similar conspiracy from in or about 2000 until approximately February 2009. The department said that Del Vecchio Sr. and Mastellone proceeded to submit bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.

“By conspiring to rig the bids of municipal tax liens, the conspirators profited at the expense of those already struggling financially,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “Protecting Americans from these types of bid-rigging schemes remains a high priority for the division.”

The department said the primary purpose of the conspiracy was to suppress and restrain competition in order to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. State law requires that investors bid on the interest rate delinquent property owners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.

According to the court documents, Del Vecchio Sr. and Mastellone were involved in the conspiracy with others not to bid against one another at municipal tax lien auctions in New Jersey. Since the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition, the department said.

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than the $1 million statutory maximum.

Today’s pleas are the 13th and 14th guilty pleas resulting from an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions. Nine individuals – Isadore H. May, Richard J. Pisciotta Jr., William A. Collins, Robert W. Stein, David M. Farber, Robert E. Rothman, Stephen E. Hruby, David Butler and Norman T. Remick – and three companies – DSBD LLC, Crusader Servicing Corp. and Mercer S.M.E. Inc. – have previously pleaded guilty as part of this investigation.

Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.

This ongoing investigation is being conducted by the Antitrust Division’s New York Office and the FBI’s Atlantic City, N.J., office. Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the Atlantic City Resident Agency of the FBI at 609-677-6400.

NEW JERSEY BID RIGGING CORRUPTION: William A. Collins, of Medford, New Jersey, sentenced to one year of probation and ordered to pay a $20,000 fine for Sherman Act conspiracy.

NJ Investor Gets Probation For Tax Lien Bid-Rigging Scheme


Law360, New York (April 22, 2016, 6:54 PM EDT) -- A financial investor was sentenced by a New Jersey federal judge Thursday to one year probation and ordered to pay a $20,000 fine for his participation in a scheme to rig bids at municipal tax lien auctions. 

At a hearing in Newark, U.S. District Judge Susan D. Wigenton sentenced William A. Collins, of Medford, New Jersey, to one year of probation and ordered him to pay a $20,000 fine, due immediately, for Sherman Act conspiracy. A brief minute order reporting the sentence did not include further information.

Collins waived his right to prosecution by indictment in August 2011. The same month, he pled guilty to one count of violating Section One of the Sherman Act. Such a violation carries a maximum penalty of 10 years in prison and a $1 million fine.

According to court records, from 2003 to 2009, Collins and co-conspirators took part in a scheme to “suppress and eliminate competition” by submitting collusive and noncompetitive bids at municipal public auctions for tax liens.

The federal government alleged Collins and his co-conspirators allocated which tax liens they would each bid on or refrain from bidding on. Their coordination allowed them to purchase homeowners' liens at noncompetitive prices with artificially high interest rates, the DOJ said in a previous news release.

If a property owner fails to pay taxes on that property, the municipality can attach a lien for the amount of the unpaid taxes, which may be sold at auction after a certain time, the DOJ said. Investors then bid on the interest rate the homeowners will pay when the lien is settled

At tax lien auctions in New Jersey, the interest rate starts at the statutory maximum of 18 percent and can be driven down through the bidding process, according to the DOJ.

If the lien remains unpaid after a certain time, the investors can begin foreclosure proceedings, the DOJ said.

The government’s charges against Collins came in part of a larger investigation into bid rigging or fraud related to municipal tax lien auctions.

Last month, Judge Wigenton sentenced James Jeffers Jr. of Mount Holly, New Jersey, to one year and one day in prison and ordered payment of a $25,000 fine after a jury found him guilty of violating Section One of the Sherman Act by agreeing not to bid against others in order to drive up interests rates on the tax debts of property owners while working for Crusader Servicing Corp., as well as its successor company.

Representatives for the parties did not respond immediately to requests for comment Friday.

Collins is represented by Jack Wenik of  Epstein Becker & Green PC.

The government is represented by Grace Pyun, John Williams, Van Lonkhuyzen, Steven Tugander, Charles Vincent Reilly,
Debra Brookes, Kristina N.V. Srica and Stephanie Anne Raney of the U.S. Department of Justice.

The case is USA v. Collins, case number 2:11-cr-00563, in the U.S. District Court for the District of New Jersey.

--Additional reporting by Hannah Sheehan, Caroline Simson, Alex Lawson, Vidya Kauri, Alex Wolf and Shayna Posses. Editing by Kelly Duncan. 


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Objector Appeals $9.6M Settlement In NJ Bid-Rigging Suit


Law360, Washington (October 27, 2016, 3:02 PM EDT) -- A class member in a New Jersey federal suit filed a notice of appeal with the Third Circuit on Wednesday over the $9.6 million settlement of a municipal tax lien auction-rigging suit, which she has described as inadequate, improperly executed and unfairly distributed.
Arlene M. Davies indicated she will appeal a New Jersey federal judge’s Sept. 30 order granting a class settlement between New Jersey property owners and individuals accused of rigging auctions for municipal tax liens to keep interest rates artificially high.

Davies came out against the proposed settlement last year, claiming it gave preferential treatment to home owners facing current liens and fell woefully short of the $100 million to $200 million in fraud that they claim the defendants perpetuated for more than a decade.

New Jersey District Judge Michael Shipp approved a $9.6 million in settlements, plus attorneys' fees, on Sept. 30 over objections from Davis and fellow class member Jerilean Roberts. Addressing the objections over the size of the settlement reached without formal discovery, the decision stated that the significant risks entailed in attempting to establish liability and damages and maintain a class action justified a settlement representing a small fraction of the total possible recoverable amount estimated by Davies.

The decision also noted that out of an estimated class of thousands of members, only Davies and Roberts objected to the settlement.

According to court filings, New Jersey law allows the auctioning of tax liens that remain unpaid after a waiting period. The law requires that investors bid on the interest rate that delinquent property owners will pay upon redemption, starting with an 18 percent rate that is reducible to zero through a competitive bidding process.

The class claimed the defendants began conspiring in 1998 to allocate the liens among themselves and not bid against each other in order to make sure the interest rates remained at the legal maximum of 18 percent. The collusion forced thousands of property owners to pay artificially high interest rates on their tax sale certificates, the plaintiffs argued.

A U.S. Department of Justice probe of the scheme secured more than a dozen guilty pleas.

Lead plaintiffs in the case slammed Davies and other objectors to the settlement last April, claiming they lodged their objections to a proposed settlement too late for the plaintiffs to respond despite years of complaining over the settlement.

Representatives for the parties could not immediately be reached for comment.

Davies is represented by Dennis J. Drasco of Lum, Drasco & Positan LLC, Hays Gorey Jr. of Geyer & Gorey LLP, Steven F. Molo, Thomas J. Wiegand, Justin B. Weiner and Rayiner I. Hashem of MoloLamken LLP.

Counsel information for the defendants was not available Thursday.

In RE: New Jersey TAX Sales Certificates Antitrust Litigation, case number 3:12-cv-01893-mas-tjb, in the U.S. District Court for the District of New Jersey.




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SIX INVESTORS INDICTED FOR THEIR ROLES IN BID RIGGING SCHEME AT MUNICIPAL TAX LIEN AUCTIONS IN NEW JERSEY


Investigation Has Yielded 20 Charges to Date

WASHINGTON — A federal grand jury in Newark, N.J., returned an indictment against six investors for their roles in a conspiracy to rig bids at auctions conducted by New Jersey municipalities for the sale of tax liens, the Department of Justice announced.

The indictment, filed today in U.S. District Court for the District of New Jersey in Newark, charges four individuals, Joseph Wolfson, Gregg Gehring, James Jeffers Jr. and Robert Jeffrey, and two entities, Betty Simon Trustee LLC and Richard Simon Trustee, with participating in a conspiracy to rig bids at tax lien auctions in New Jersey. According to the indictment, from at least as early as 1998 and continuing until as late as February 2009, the investors participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on. The indictment alleges that the investors proceeded to submit bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.

Joseph Wolfson, of Margate, N.J., was a part-owner of two entities that invested in municipal tax liens, Betty Simon Trustee and Richard Simon Trustee, both of Northfield, N.J. Gregg Gehring, of Newton, N.J., was employed by a major tax lien investment company as a vice president. James Jeffers Jr., of Burlington, N.J., was a bidder for Crusader Servicing Corp., which pleaded guilty to its role in the conspiracy in September 2012, and also a bidder for Crusader’s successor corporation. Robert Jeffrey, of Bradenton, Fla., was a bidder for both Crusader and its successor corporation.

“The individuals and entities charged today demonstrated a blatant disregard for the competitive process by allocating the purchase of certain municipal tax liens by, from time to time, flipping a coin, drawing numbers out of a hat or drawing from a deck of cards,” said Leslie C. Overton, Deputy Assistant Attorney General for the Antitrust Division. “The Antitrust Division remains committed to prosecuting those who thwart the competitive bidding process.”

The department said that the primary purpose of the conspiracy was to suppress and restrain competition in order to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. State law requires that investors bid on the interest rate delinquent property owners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached. Since the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition, the department said.

The indictment alleges, among other things, that from at least as early as 1998 and continuing until as late as February 2009, prior to the commencement of certain tax lien auctions in New Jersey, the investors and their co-conspirators agreed not to compete for the purchase of certain municipal tax liens.

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the $1 million statutory maximum.

Including today’s charges, 20 individuals and entities have been charged as part of an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions in New Jersey. To date, 11 individuals – Isadore H. May, Richard J. Pisciotta Jr., William A. Collins, Robert W. Stein, David M. Farber, Robert E. Rothman, Stephen E. Hruby, David Butler, Norman T. Remick, Robert U. Del Vecchio Sr., and Michael Mastellone – and three companies, DSBD LLC, Crusader Servicing Corp., and Mercer S.M.E. Inc., have pleaded guilty aspart of this investigation.

Today’s charge is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

This ongoing investigation is being conducted by the Antitrust Division’s New York Field Office and the FBI’s Atlantic City, N.J., office. Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Field Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the Atlantic City Resident Agency of the FBI at 609-677-6400. 



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Two New Jersey Investors Plead Guilty for Their Roles in Bid-rigging Schemes at Municipal Tax Lien Auctions

Two financial investors who purchased municipal tax liens pleaded guilty today for their roles in a conspiracy to rig bids at auctions conducted by New Jersey municipalities for the sale of those tax liens, the Department of Justice announced.


A felony charge was filed today in U.S. District Court for the District of New Jersey in Newark, against Robert U. Del Vecchio Sr., of Hawthorne, N.J. According to the charge, from in or about 2000 until approximately December 2008, Del Vecchio Sr. participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on. Additionally, a felony charge was filed today in the U.S. District Court for the District of New Jersey in Newark, against Michael Mastellone, of Cedar Knolls, N.J. for participating in a similar conspiracy from in or about 2000 until approximately February 2009. The department said that Del Vecchio Sr. and Mastellone proceeded to submit bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.

“By conspiring to rig the bids of municipal tax liens, the conspirators profited at the expense of those already struggling financially,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “Protecting Americans from these types of bid-rigging schemes remains a high priority for the division.”

The department said the primary purpose of the conspiracy was to suppress and restrain competition in order to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. State law requires that investors bid on the interest rate delinquent property owners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.

According to the court documents, Del Vecchio Sr. and Mastellone were involved in the conspiracy with others not to bid against one another at municipal tax lien auctions in New Jersey. Since the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition, the department said.

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than the $1 million statutory maximum.

Today’s pleas are the 13th and 14th guilty pleas resulting from an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions. Nine individuals – Isadore H. May, Richard J. Pisciotta Jr., William A. Collins, Robert W. Stein, David M. Farber, Robert E. Rothman, Stephen E. Hruby, David Butler and Norman T. Remick – and three companies – DSBD LLC, Crusader Servicing Corp. and Mercer S.M.E. Inc. – have previously pleaded guilty as part of this investigation. Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.

This ongoing investigation is being conducted by the Antitrust Division’s New York Office and the FBI’s Atlantic City, N.J., office. Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the Atlantic City Resident Agency of the FBI at 609-677-6400.





===============


  Justice News

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Monday, September 30, 2013
Two New Jersey Investors Plead Guilty for Their Roles in Bid-rigging Schemes at Municipal Tax Lien Auctions
Investigation Has Yielded 14 Guilty Pleas


Two financial investors who purchased municipal tax liens pleaded guilty today for their roles in a conspiracy to rig bids at auctions conducted by New Jersey municipalities for the sale of those tax liens, the Department of Justice announced.

A felony charge was filed today in U.S. District Court for the District of New Jersey in Newark, against Robert U. Del Vecchio Sr., of Hawthorne, N.J. According to the charge, from in or about 2000 until approximately December 2008, Del Vecchio Sr. participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on. Additionally, a felony charge was filed today in the U.S. District Court for the District of New Jersey in Newark, against Michael Mastellone, of Cedar Knolls, N.J. for participating in a similar conspiracy from in or about 2000 until approximately February 2009. The department said that Del Vecchio Sr. and Mastellone proceeded to submit bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.

“By conspiring to rig the bids of municipal tax liens, the conspirators profited at the expense of those already struggling financially,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “Protecting Americans from these types of bid-rigging schemes remains a high priority for the division.”

The department said the primary purpose of the conspiracy was to suppress and restrain competition in order to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. State law requires that investors bid on the interest rate delinquent property owners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.

According to the court documents, Del Vecchio Sr. and Mastellone were involved in the conspiracy with others not to bid against one another at municipal tax lien auctions in New Jersey. Since the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition, the department said.

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than the $1 million statutory maximum.

Today’s pleas are the 13th and 14th guilty pleas resulting from an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions. Nine individuals – Isadore H. May, Richard J. Pisciotta Jr., William A. Collins, Robert W. Stein, David M. Farber, Robert E. Rothman, Stephen E. Hruby, David Butler and Norman T. Remick – and three companies – DSBD LLC, Crusader Servicing Corp. and Mercer S.M.E. Inc. – have previously pleaded guilty as part of this investigation.

Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.

This ongoing investigation is being conducted by the Antitrust Division’s New York Office and the FBI’s Atlantic City, N.J., office. Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the Atlantic City Resident Agency of the FBI at 609-677-6400.