EDWARDSVILLE — For the second time in two weeks, a Madison County property owner filed a lawsuit seeking class action status against the county for ex-treasurer Fred Bathon's bid-rigging scheme involving annual auctions of delinquent property taxes.
Named as defendants are Madison County Board Chairman Alan Dunstan and Circuit Clerk Mark Von Nida. Other co-defendants include Bathon; Jim Foley, a former investment officer in the treasurer's office; and 13 individuals and firms that specialize in buying up delinquent taxes and making money off the penalty interest.
What's more, the lawsuit names Von Nida as one of Bathon's co-conspirators, and accuses Von Nida, who served as county clerk from 1997 to 2012, of agreeing "to participate in an unlawful act, the violation of the Illinois Antitrust Act and the federal Sherman Act."
The lawsuit also accuses Von Nida, as county clerk, of playing "an integral goal in the tax sale process" because it was his job to attend all tax auction sales, and to document all sales as they occurred."
Dunstan and Von Nida could not be reached for comment Friday.
According to the lawsuit: "Any reasonable person in Von Nida's position who was attending to such duties with reasonable diligence could not help but be aware of or at least high suspicious there was on going illegal conspiracy under the circumstances ... At worst, Von Nida participated in and/or was complicit in the ongoing scheme to make illegal profits off of the tax sales."
Dunstan and Von Nida could not be reached for comment Friday.
County insurer Western Surety Company, a lawsuit co-defendant that had issued public officials bonds on behalf of Von Nida, also could not be reached for comment.
Tax buyers named as co-defendants in the lawsuit include some of the most prominent names in the state, including Dennis Ballinger of Decatur, John Vassen of Belleville, and Scott McLean of East St. Louis. The taxbuyers had previously declined to comment.
The lawsuit seeks unspecified damages on behalf people in the proposed plaintiff class "in a sum that will justly compensate them for their loss, for their costs and attorneys' fees and for an award of treble actual damages."
Bathon pleaded guilty a month ago in U.S. district court in East St. Louis to a criminal charge of rigging the tax sale so that his political donors profited from inflated penalties paid by property owners.
Bathon, according to his plea agreement, could receive a prison sentence of between 31 and 40 months, though his sentence could be reduced based on his cooperation with federal law enforcement.
Bathon's guilty plea, as well as the two class action lawsuits, occurred more than two years after a September 2010 series by the News-Democrat that exposed Bathon's bid-rigging scheme.
The class-action suit was filed Thursday in Madison County by St. Louis attorneys Aaron G. Weishaar and Christopher A. Michener. For now, the only named plaintiff is Virgil Straeter, of Highland.
Straeter is asking the court to certify the suit as a class action on behalf of any Madison County property owners whose tax bills were included in the county's tax sales from 2003 to 2008. Prosecutors have said there were about 10,000 tax bills affected.
A class-action suit was filed Feb. 20 by St. Jacob attorney John Barberis and Collinsville attorney Steve Giacoletto. For now, the only named plaintiffs are Scott and Dawn Bueker, of St. Jacob, Jason and Christine Moss, of Collinsville, and Guideon Richeson, of Troy.
Named as defendants in the first lawsuit, along with the county, are Bathon and taxbuyers Vassen, Ballinger, McClean and others.
At the county's annual tax sale, investors buy the right to pay the delinquent taxes of property owners.
Property owners who don't repay the taxes, as well as a penalty to the investors, can lose their property. The penalty rate is supposed to be determined through competitive bidding, to see which investor is willing to accept the lowest rate.
In most counties, the tax bills are sold in a reverse auction, where the investor offering to take the lowest penalty rate is the winning bidder. The process is supposed to ensure that property owners aren't charged excessive penalties for paying their taxes late.
However, witnesses say Bathon conducted his tax sales like a bid opening, where investors were not allowed to undercut each other or "bid down" the penalty percentage.
Under Bathon's procedure, all the bidders would shout an opening bid. The one who shouted the lowest bid first was declared the winner.
Federal prosecutors say Bathon's procedure resulted "in a chaotic scene where every participant at the tax sale shouted their bids simultaneously, leaving the auctioneer, a treasurer's office employee, to select the 'winner.'"
From 2006 to 2009, the last three years of Bathon's tenure, the average penalty rate awarded to tax buyers was either 18 percent -- the highest rate allowed by state law -- or 17 percent, according to the 2010 News-Democrat probe of the tax sales.
The average fell to 9 percent after Bathon retired and Frank Miles, a fellow Democrat, was named treasurer.
Current Treasurer Kurt Prenzler conducted the county's annual tax sale last month, and the average penalty rate was 3.7 percent. All three sales conducted during Prenzler's tenure have produced average penalty rates below 4 percent.
Contact reporter Mike Fitzgerald at mfitzgerald@bnd.com or 618-239-2533.
Contact reporter Mike Fitzgerald at mfitzgerald@bnd.com or 618-239-2533.
