Gibbons will fight tax auction lawsuits: 'Plaintiffs haven't alleged any facts'

News-DemocratJuly 5, 2013 

— Madison County's problem-plagued delinquent tax auction system has become a magnet for lawsuits, and State's Attorney Tom Gibbons is signaling that he plans to fight hard against each one of them.

Earlier this week Gibbons' office filed motions in Madison County Circuit Court to dismiss three class action lawsuits filed against the county. The lawsuits were filed in the wake of former treasurer Fred Bathon's guilty plea in federal court to rigging the county's annual delinquent tax lien auction for personal gain from 2004-2009.

Gibbons also plans to mount a vigorous defense against a pair of lawsuits filed in Madison County Circuit Court by two of the metro-east's most prominent taxbuyers. The lawsuits allege the plaintiffs suffered severe financial harm as a result of botched tax lien sale in February 2012 that was later invalidated, forcing the county to refund all fees collected and absorb at least $150,000 in losses.

The class action lawsuits, whose plaintiffs are a handful of county taxpayers, allege that Bathon, during his last six years as treasurer, conspired with his unnamed co-defendants to change the bidding process to require "a one-time, simultaneous bidding -- a so-called 'no trailing bid' policy," according to one of the lawsuits.

Named as defendants in the lawsuits 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.

In his motion to dismiss the class action lawsuit, Gibbons rejected the plaintiffs' contention that county officials, like Von Nida, had an obligation to stop the fraud that Bathon and his co-conspirators had generated.

"But the problem is the plaintiffs haven't alleged any facts to support that. They've just simply made allegations," Gibbons said. "You have to allege a person did a certain thing, which they failed to do."

Gibbons assailed the notion that Von Nida or any other county official could have stopped a conspiracy that "took place under cover of darkness" and away from the tax auction venue.

"So alleging that someone would have known a thing that was deeply hidden by Fred Bathon, it simply doesn't stand up to logical or legal muster," Gibbons said.

Bathon, 58, pleaded guilty to a single count of bid-rigging in February in federal court in East St. Louis. Bathon, who left office at the end of 2009, faces up to 10 years in prison when he appears at his sentencing hearing scheduled for late next month.

Collinsville attorney Steven Giacolletto, who filed one of the class action lawsuits, said he wasn't surprised that Gibbons is seeking to dismiss the class action lawsuits, calling it "not something I didn't expect."

Giacolletto said he expected important evidence and testimony will arise as the pre-trial discovery process unfolds.

Meanwhile, the county has engaged the law firm of Sandberg Phoenix, of St. Louis, to contest the taxbuyer lawsuits filed earlier this year after the county took the extraordinary step of invalidating 2,700 tax sales from the February 2012 tax auction.

The county took this step after it was discovered, in May of that year, that Treasurer Kurt Prenzler had failed to obtain a required circuit court order allowing the tax lien auction to proceed.

The lawsuits, which were both filed in February, claim their plaintiffs suffered severe economic harm from the botched tax sale.

They were filed by eight taxbuying firms associated with taxbuyer Scott McLean, of East St. Louis, who is seeking nearly $5.6 million in damages, and by taxbuyer John Vassen, of Belleville, who is seeking more than $421,000 in damages plus costs.

Gibbons rejected the rationale behind both lawsuits. McLean and Vassen received the same the same type of compensation as the other taxbuyers.

"They received what they were entitled to under the law," he said. "I don't believe any further compensation is appropriate."

Belleville News-Democrat is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service