A federal grand jury indicted six investors, including a Margate man and his two Northfield companies, for their alleged roles in a conspiracy to rig bids at tax lien auctions, the Department of Justice announced in a statement.
The indictment, filed Tuesday in U.S. District Court in Newark, charged Joseph Wolfson, of Margate, Gregg Gehring, of Newton, Sussex County, James Jeffers Jr., of Burlington, Robert Jeffrey, of Florida, and two Northfield-based LLCs part-owned by Wolfson, Betty Simon Trustee, and Richard Simon Trustee, with conspiracy.
According to the indictment, “from at least as early as 1998 and continuing until as late as February 2009, the investors participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on. The indictment alleges that the investors proceeded to submit bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.”
“The individuals and entities charged today demonstrated a blatant disregard for the competitive process by allocating the purchase of certain municipal tax liens by, from time to time, flipping a coin, drawing numbers out of a hat or drawing from a deck of cards,” said Leslie C. Overton, Deputy Assistant Attorney General for the Antitrust Division, in a statement. “The Antitrust Division remains committed to prosecuting those who thwart the competitive bidding process.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals, the DOJ stated. The maximum fine for a Sherman Act violation may be increased to twice the gain — or twice the loss suffered by the victim — if either amount is greater than $1 million.
Including Tuesday’s charges, 20 individuals and entities have been charged as part of an ongoing investigation into bid rigging or fraud in municipal tax lien auctions in New Jersey. Eleven people and three companies have pleaded guilty as part of this investigation.
The ongoing investigation is being conducted by the DOJ Antitrust Division’s New York Field Office and the FBI’s Atlantic City office. Anyone with information can contact the New York Field Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the Atlantic City Resident Agency of the FBI at 609-677-6400.