Fred Bathon, 60, the former Madison County treasurer, is scheduled to leave a half-way house in St. Louis some time Thursday.
Bathon’s release from the halfway house closes out one more chapter in the career of a man who bulled his way out of poverty and a childhood spent in an orphanage to become one of Madison County’s major Democratic players. But it all came crashing down in February 2013, when Bathon pleaded guilty to rigging the sale of delinquent taxes and helping cheat up to 10,000 county taxpayers out of millions of dollars in excessive fees and interest penalties.
U.S. District Judge David Herndon originally sentenced Bathon in December 2013 to spend 30 months in prison for orchestrating a scheme that favored certain tax buyers in return for campaign contributions. Bathon was also ordered to pay a $20,000 fine and serve two years on probation.
But court records show that, in November, federal prosecutors in the Bathon case filed a sealed motion, which was not public. Herndon granted the prosecutors’ request. The Bureau of Prisons subsequently changed Bathon’s release date — to June 25, 2015, instead of a year later.
That type of scenario is often an indication that a defendant got a break on his sentence in exchange for helping investigators or prosecutors.
U.S. Attorney Steve Wigginton’s office declined comment. A worker at the St. Louis halfway house declined to confirm if Bathon was a resident of the facility.
It remains unclear where Bathon will live once he hits the street. Soon after his sentencing in December 2013, the Illinois Municipal Retirement Fund terminated his $90,000-per-year pension.
Kurt Prenzler, the Madison County treasurer who won his post in 2010 after vowing during his campaign to make tax auctions more transparent and fair, declined to comment on Bathon’s impending release from federal custody.
But Prenzler did speak up for the 10,000 victims of Bathon’s scam who lost large sums of money but have not received a cent in restitution. “That’s something that still remains to be done,” Prenzler said.
The victims of Bathon’s bid-rigging scheme have only one hope left for restitution: a class action lawsuit working through the Madison County court system that names Bathon, several prominent tax buyers and the county itself as defendants. Prenzler noted that Bathon first engaged in his fraudulent scheme 10 years ago.
“I think from the victims’ standpoint, I think what they’d like to see is restitution,” Prenzler said.
Bathon pleaded guilty to organizing a scheme that resulted in property owners paying the maximum penalty — 18 percent — when they were late paying their property taxes.
In Illinois, investors, known as tax buyers, can pay a person’s property tax debt. The tax buyers make money by charging the property owners a penalty rate, or, if the property owner doesn’t eventually pay up, the tax buyer can take the property.
The penalty rate for each piece of property is determined at the treasurer’s annual tax sale. In most counties, the sale is conducted like a reverse auction, where buyers undercut each other with lower bids.
But witnesses say Bathon conducted the auction like a bid opening. Multiple buyers would simultaneously shout 18 percent, then Bathon’s office would award the bid to whichever buyer appeared to shout first. Buyers weren’t able to continue the bidding to undercut each other or “bid down” the penalty percentage.
The winning bidders were often contributors to Bathon’s political fund.
Three tax buyers — John Vassen, Scott McLean and Barret Rochman — also were charged in the scheme and pleaded guilty. Those three, who are still serving their sentences, were some of Bathon’s biggest campaign donors.
Contact reporter Mike Fitzgerald at email@example.com or 618-239-2533.