Businessman gets 16 months in prison for bid-rigging scheme

News-DemocratMarch 25, 2014 

— A federal judge on Tuesday sentenced Makanda businessman Barrett Rochman to 16 months in prison and ordered him to pay a $30,000 fine for his role in a bid-rigging scheme engineered by ex-Madison County Treasurer Fred Bathon.

The scheme forced thousands of Madison County property owners to pay millions in excessive interest penalty rates on delinquent taxes.

U.S. District Judge David Herndon said evidence showed Rochman's guilt mirrored that of Bathon, who is serving a 30-month sentence in Terre Haute, Ind.

Herndon noted evidence presented by the federal government that showed Rochman had engaged in similar misconduct during property tax auctions in 1998 in Cook County.

Rochman had filed a lawsuit with other tax buyers to prevent the then Cook County treasurer from implementing measures to that ensure competitive bidding took place.

Herndon further pointed out that Rochman was called by another tax buyer "an Alpha dog" who had aggressively courted Bathon with political donations, personal gifts and favors.

Although Bathon organized the conspiracy, Rochman needed little convincing from Bathon to join in, according to Herndon.

Rochman "found his kindred spirit, if you will, in Mr. Bathon," Herndon said. "He seemed to me like he told Bathon what Bathon wanted to hear."

But Herndon decided that Rochman's 16-month sentence -- which is what assistant U.S. Attorney Steven Weinhoeft recommended -- was appropriate because of Rochman's extraordinary record of charitable activities.

In contrast, Herndon last month sentenced two of the other tax buyers who pleaded guilty to colluding with Bathon -- John Vassen and Scott McLean -- to prison sentences of two years and 18 months, respectively, even though Herndon acknowledged their level of culpability was less than Rochman's.

Herndon said the difference in sentence lengths stemmed from Rochman's long track record of charitable giving spanning a wide range of causes: the construction and maintenance of a park in memory of a son killed in a car accident; raising money for charity set up to find a cure for the rare neurological disease that killed one of Rochman's granddaughters; donations of time and money to colleges, sports teams and a home for mentally disabled men.

And then there was "the stunning collection of letters" written to Herndon in support of Rochman's generosity and from people who cited Rochman's generosity and kindness, the judge said.

"It just goes on and on," Herndon said. "Mr. Rochman has had a huge impact on people in a positive way. It's just amazing the impact this man has had on people."

Rochman and his subsidiaries bought nearly $3.716 million in tax liens, and netted $1.1 million, court records show.

The first 45 minutes of Rochman's sentencing hearing focused on whether Rochman should receive a longer potential sentence for failing to make restitution.

John Rogers, Rochman's attorney, said his client shouldn't be penalized for failing to make restitution because the federal government had spurned efforts to devise a restitution system.

But Weinhoeft, the federal prosecutor, said experts he's consulted told him that determining an accurate amount for Rochman to pay in restitution was not practical because of the scope and complexity of examining thousands of tax liens.

Herndon sided with Weinhoeft.

"I believe at this point in time that the victims will not be compensated with any degree of certainty," Herndon said.

Bathon's, Vassen's, McLean's and Rochman's guilty pleas, as well as three class action lawsuits filed against Madison County and various other tax buyers, occurred more than three years after a September 2010 series by the News-Democrat that exposed Bathon's bid-rigging scheme.

The newspaper's probe of Bathon's handling of the tax auctions showed that in 2008, when 2,568 tax bills were sold, the winning bid was 18 percent on all but eight pieces of property. The 18 percent rate is the maximum allowed under state law.

But the 18 percent rate is just the start. After six months, if a delinquent tax lien is not redeemed, the annual interest rate charged to the owner doubles to 36 percent. The interest rate after 30 months of nonredemption skyrockets to 108 percent, according to the stipulation of facts that each defendant signed.

Rochman, 71, apologized to the people of Madison County and promised to pay restitution.

"I ruined my heritage and destroyed my legacy," Rochman said.

Rochman said he wasn't motivated by greed. "It was stupidity and the need to feel important," he said.

Contact reporter Mike Fitzgerald at mfitzgerald@bnd.com or 618-239-2533.

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