Pennsylvania Corp Pleads Guilty to Bid Rigging in NJ Tax Lien Auctions
A Pennsylvania corporation pleaded guilty today to participating in a conspiracy to rig bids for the sale of tax liens auctioned by municipalities throughout New Jersey, the Department of Justice announced.
A felony charge was filed today in the U.S. District Court for the District of New Jersey in Newark, against Crusader Servicing Corp., of Jenkintown, Pa. According to the felony charge, from at least as early as 1998 until September 2006, Crusader participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on.
The department said that Crusader submitted bids in accordance with their agreements and purchased tax liens at collusive and non-competitive interest rates.
“The conspirators agreed to not compete with one another at these tax lien auctions, depriving struggling homeowners of a competitive interest rate,” said Scott D. Hammond, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “Today’s guilty plea demonstrates the Antitrust Division’s continuing efforts to prosecute those who manipulate the competitive process in order to harm home and property owners.”
The primary purpose of the conspiracy was to suppress and restrain competition to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes.
A violation of the Sherman Act carries a maximum penalty of $100 million criminal fine for corporations. The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than the statutory maximum.
This guilty plea is the 10th resulting from an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions. Eight individuals and one company have previously pleaded guilty as part of this investigation.
The case is being prosecuted by the U.S. Department of Justice Antitrust Division’s Philadelphia Office and is the result of an ongoing investigation by the Antitrust Division, the U.S. Attorney’s Office for the District of New Jersey, and the FBI.
President Obama’s Financial Fraud Enforcement Task Force created in November 2009 was instrumental in facilitating this case. The task force is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.
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