The last of three men who pleaded guilty, along with former Madison County Treasurer Fred Bathon, of conspiring to eliminate competitive bidding on tax sales in the county has been sentenced for violating the Sherman Antitrust Act.
Barrett R. Rochman, 71 of Makonda, Ill., was sentenced to 16 months in prison and three years of supervised release. He was also ordered to pay a $30,000 fine and a special assessment of $100. Rochman, 70, of Makonda, Ill., pled guilty on Oct. 17, 2013 to participating in noncompetitive tax sales.
In February, Scott McLean, 51, of Belleville, was sentenced to 18 months in prison, three years supervised release and fined $25,000. John A. Vassen, 56, of O’Fallon, was sentenced to two years in prison, three years supervised release and fined $25,000.
Bathon was sentenced in Dec. 2013 to 30 months in prison, two years of supervised release and fined $20,000 for accepting campaign donations in exchange for allowing Mclean, Vassen and Rochman to buy tax lien certificates against delinquent Madison County taxpayers without competition. Thousands of delinquent taxpayers were forced to pay the legal maximum 18 percent penalty rate on their late taxes or face foreclosure.
Investors are to compete to purchase tax liens by bidding on the interest rate the property owner will be required to pay prior to redeeming the tax lien attached to the owner’s property. The bid opens at no more than the maximum of 18 percent. The bidding process typically drives the rate down.
For tax sales conducted in 2005-2008, Bathon pled guilty to structuring the sales to eliminate bidding. In 2007, 99.03 percent of property tax liens were auctioned at the maximum 18 percent and in 2008, 96.86 percent were auctioned at the maximum.
The three tax auctions since Kurt Prenzler was elected Madison County Treasurer have resulted in average interest rates of less than 4 percent. The average rate at the most recent sale, on Feb. 13, was 1.59 percent.