Tax collectors in several Maryland counties said they learned of the current investigation when they received grand jury subpoenas for tax sale records last summer. Several said they knew of no misconduct, though they conceded that there is little they could do to prevent it. For instance, they have no way to discern the identities of all investors in firms that bid, let alone whether they met in advance. "It bothers me, yes, that that kind of thing [bid rigging] could happen," said Stan Willis, chief of the treasury for Prince George's County. "Whether there's collusion is difficult to determine," added Robert Hageboom, chief of the treasury division for Montgomery County. "On the face of it, it looks like there is active bidding."
William R. Brown Jr., controller of Anne Arundel County, said problems with bidding do not hurt the county, which considers the sales an effective collection system.
"Money is green," he said. "We can only assume that the highest bidder gets the bid."
Nusbaum and Stollof and their families have long been associated with the ground rent business. In 1991, they set up Jack and Harvey Inc., to buy and sell ground rents. Their four children owned Houndswood LLC, which in the early 1990s revolutionized the staid ground rent industry by buying a block of 3,500 rents from a bank and quickly filing hundreds of "ejectment" lawsuits against homeowners who were behind on their rent payments. Attorney Himelfarb, one of Houndswood's four original owners, filed many of those lawsuits.
Some investors buy tax liens and ground rents on the same home and hit its owners with twin lawsuits to seize the property unless they pay hefty attorney and collection fees allowed under state law.
Ground rents are a Berman family business, too. Heidi Kenny, Steven Berman's wife, and her law firm have filed hundreds of lawsuits to seize property for unpaid ground rent in recent years.
In 2006, Kenny drew scutiny from then Gov.-elect Martin O'Malley and local legislators when she sought to eject a man and his two sons from their Canton home days before Christmas over what began as a $24 unpaid ground rent. The man's family later paid more than $18,000 to settle the matter.
At Baltimore's most recent tax-sale auction, held May 12, Kenny and Nusbaum's daughter, Tacey Himelfarb, bought 43 percent of the available liens, city records show. Kenny also bought a majority of the liens sold at the Howard County tax sale last week, records show.
Berman, Nusbaum and Stollof did not bid in the city auction this year. They won 41 percent of the available liens last year.
fred.schulte@baltsun.com
june.arney@baltsun.com
