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From Antitrust Law Daily, November 19, 2013

Six indicted for conspiring to rig bids at New Jersey tax lien auctions

By Jeffrey May, J.D.

Four individuals and two related companies were indicted by a federal grand jury in Newark, New Jersey, today for their alleged roles in a conspiracy to rig bids at auctions conducted by New Jersey municipalities for the sale of tax liens. The charges are the result of an ongoing investigation, which was noted as one of the highlights of the Department of Justice Antitrust Division’s cartel enforcement program in testimony delivered by Assistant Attorney General William Baer last Thursday before the Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights.

The Justice Department announced today that an indictment was filed, naming Joseph Wolfson, Gregg Gehring, James Jeffers, Jr., and Robert Jeffrey, in addition to two entities that invested in municipal tax liens, Betty Simon Trustee LLC and Richard Simon Trustee. The defendants were charged with participating in a conspiracy to rig bids at tax lien auctions in New Jersey between 1998 and 2009. Wolfson was a part-owner of the two entities. Gehring was employed by an unnamed tax lien investment company as a vice president. Defendants Jeffers and Jeffrey were bidders for Crusader Servicing Corporation. That Jenkintown, Pennsylvania-based company pleaded guilty in September 2012 to participating in the conspiracy.

According to the indictment, the defendants agreed to allocate among certain bidders which liens each would bid on. They allegedly proceeded to submit bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates, the Justice Department alleged.

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 on the liens, according to the Justice Department. As a result, property owners were forced to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition, the government contended.

To date, 20 individuals and entities have been charged in the ongoing investigation. Eleven individuals and three companies, including Crusader Servicing, have pleaded guilty to the charges.

Companies: Crusader Servicing Corp.

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