A veteran Baltimore real estate investor could serve up to 18 months in prison for conspiring to rig bids at Maryland tax sale auctions under a plea deal that obligates him to cooperate with a continuing criminal investigation of the auctions.
Steven L. Berman, in a plea agreement filed yesterday in U.S. District Court in Baltimore, admitted to a single felony count of bid rigging. Berman, 50, also agreed to pay a $750,000 fine.
"This is a very unusual case," said Berman's attorney, Geoffrey R. Garinther of Towson. "Steve did not know he was violating the law and from the moment the law was explained to him he accepted responsibility and cooperated fully."
No date has been set for Berman's sentencing by U.S. District Judge J. Frederick Motz, and the judge is free to deviate from the plea deal. Federal prosecutors recommended between 12 months and 18 months, according to a Department of Justice spokeswoman.
The sentence is at the bottom of guidelines for a violation of the Sherman Antitrust Act. The maximum penalty is 10 years in prison and a $1 million fine.
The bid-rigging case is the first to stem from a broad federal investigation that became public knowledge in August. Prosecutors allege Berman conspired with other investors to fix tax auctions from 2004 to 2007 in Baltimore City and Anne Arundel, Baltimore, Howard, Montgomery and Prince George's counties.
Berman, who lives in New Freedom, Pa., spent $38.3 million during the tax auctions in which his companies and a few others dominated.
Though Berman is the sole investor charged in the case, FBI agents in court filings have identified other subjects of the investigation as Baltimore County attorney Harvey M. Nusbaum, 70, and his longtime business partner Jack W. Stollof, 73, of Stevenson. Both men have denied wrongdoing through their attorneys.
County tax assessors hold the auctions every year to collect back taxes and other unpaid municipal debts. Investors buy the right to collect the debt along with thousands of dollars in fees and can foreclose if the property owners fail to pay.
Investors are supposed to bid competitively at the auctions, which range from online bidding to sealed bids submitted in advance. But FBI agents allege that for years a small group of bidders has colluded to restrain trade and split up the liens.
