An attorney was sentenced on Tuesday to one year in jail and forced to $800,000 in criminal fine for rigging bids at tax lien auctions in Baltimore and five counties, officials said.
Harvey M. Nusbaum pleaded guilty to a one-count charge of conspiring to submit non-competitive and collusive bids at tax lien auctions, according to a release from the Department of Justice.
Tax lien auctions are used to recover money owed by property owners who failed to pay property taxes. When they fail to pay their taxes, the county can attach a lien, which, if unpaid can be sold at auction. The highest bidder for the tax lien has the right to collect the amount of the lien from the delinquent taxpayer, along with interest and fees including attorneys' fees and if the owner fails to pay the interest and fees, which can amount to thousands of dollars, the lien holder can foreclose on the property.
The release said that Nusbaum and others allocated tax liens among themselves to suppress the amount bid on the liens. By reducing the amount they bid, they were able to secure more liens for less money and in some cases they were able to foreclose on properties they obtained at non-competitive prices. Tens of millions of dollars in tax lien purchases were affected by the rigging, the release said.