Tax Sale

Taking over the collection of unpaid tax and municipal debt cases became a lucrative business for two Baltimore real estate investors who made at least $10 million, largely from homeowners who paid to keep from losing their properties, according to federal prosecutors. Baltimore County lawyer Harvey M. Nusbaum and his longtime investment partner Jack W. Stollof allegedly rigged the bidding for municipal liens and then used the court system to threaten homeowners with seizure of their properties unless they paid legal fees, interest and other charges, according to the government.

Anne Arundel County said it will no longer tax short sales on more than a home's purchase price, reacting to an opinion from the Maryland attorney general's office Wednesday that the practice isn't supported by state law. Richard Drain, the county comptroller, said Anne Arundel will collect recordation tax on the sales price, rather than the sales price plus any debt forgiven by the lender. Drain said five homes were taxed at the higher amount, and the money - less than $4,000 total - would be refunded.

Fur coats, trips and other treats for the mayor? At least $15,348. Political poll for City Council member? $12,500. City property taxes? Priceless. Or, rather: Unpaid. The free-spending Ronald Lipscomb, the developer whose gifts to Mayor Sheila Dixon and Councilwoman Helen Holton figure in the indictments against all three of them in the City Hall corruption scandal, seemed to have suddenly misplaced his checkbook when it came to the kinds of payments actually required by law. Lipscomb's Doracon Contracting - which prosecutors say got tax breaks because of his cozy relationship with city officials - owes the city about $27,000 in unpaid property taxes on its 3500 E. Biddle St. offices.

THE PROBLEM : Baltimore property owners paid their tax bills, but the payments weren't properly processed. THE BACKSTORY : Carol Foster of Phoenix couldn't understand it. She paid the property tax on her husband's dental office on Harford Road in July when the bill was due. But, in December, the couple received another letter. Foster thought it was another invoice. "I said, 'What, I've got to pay this twice a year now?' " she said. It was actually a notice to pay the taxes owed or the property would be sold at tax sale.

THE PROBLEM Baltimore property owners paid their tax bills, but the payments weren't properly processed. THE BACKSTORY Carol Foster of Phoenix couldn't understand it. She paid the property tax on her husband's dental office on Harford Road in July when the bill was due. But, in December, the couple received another letter. Foster thought it was another invoice. "I said, 'What, I've got to pay this twice a year now?'" she said. It was actually a notice to pay the taxes owed or the property would be sold at tax sale.

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.

Best Buy tests recycling Best Buy Co. announced that Maryland is one of eight states where it is testing a pilot program that allows consumers to get rid of old computers, televisions, cell phones and other outdated electronic gadgets for free. Consumers will be able to bring two items per day to a Best Buy store for recycling under the program, which began June 1. Cordish seeks N.J. casino The chairman of Baltimore-based Cordish Co., which is expanding into gaming management, confirmed that it is among a number of bidders vying to acquire Atlantic City's Tropicana Casino and Resort.

Federal investigators looking into Baltimore's tax-sale auctions have found their canary. Steven L. Berman, a veteran real estate investor from Pennsylvania, has agreed to cooperate with U.S. Justice Department prosecutors as part of a guilty plea in a bid rigging scheme. Mr. Berman is not just any canary. He has participated in tax-sale auctions in the city and five counties for several years and should be intimately familiar with the system, its vulnerabilities and payoffs. Tax sales remain a largely unnoticed, little understood process by which governments recoup unpaid property taxes and other municipal bills.

In the first charges to stem from a broad federal investigation into Maryland's tax-sale auctions, a veteran real estate investor has admitted conspiring to rig bids over several years at auctions in Baltimore and five Maryland counties. Steven L. Berman, 50, of New Freedom, Pa., will pay a $750,000 fine and face a possible prison term, federal prosecutors said yesterday. In pleading guilty to the single felony count, Berman agreed to cooperate with the investigation. The Justice Department's antitrust division in Washington has been examining alleged collusion and restraint of trade in the annual auctions for more than a year.