Woman Sees Her Home Confiscated Over a Water Bill
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In an interview in their Baltimore office, De Laurentis and Reiff said 90 percent or more of property owners eventually pay whatever is necessary to keep their homes.
They said most of the properties they take over are vacant and thus nobody is displaced. They also said they had repeatedly tried to settle the matter with Valentine and showed Investigative Fund reporters a thick file of court papers and other records as well as notes of more than a dozen contacts with her to make arrangements to clear the debt.
“We bent over backwards for her,” Reiff said, adding that his staff had tried for more than two years to “work something out” to no avail.
Feds Say Bids Rigged
Though Valentine had no way of knowing it, some investors rigged the 2006 Baltimore tax sale auction that led to her eviction, federal prosecutors alleged in court.
The roots of that conspiracy run deep, prosecutors said. For years, a handful of Baltimore real estate lawyers and their investment partners quietly dominated Maryland tax sale auctions, with few questions asked about their bidding tactics or collection policies.
That changed after The Baltimore Sun used city records and court filings to report in March 2007 that hundreds of mainly low-income city residents had been kicked out of their homes over small unpaid bills, ranging from water and sewer charges to minor environmental citations. Some people were because they couldn’t afford to pay thousands of dollars demanded by lien holders.
The Baltimore newspaper also documented for the first time that while dozens of parties bid in Baltimore tax auctions in 2006 and 2007, just three investment groups had won about two-thirds of the liens.
Prosecutors went on to charge three men with conspiring to rig bids at 21 auctions in Baltimore and four other jurisdictions, including Montgomery and Prince George’s counties in the suburbs of Washington D.C. between 2002 and 2007. All three have since pleaded guilty. No other charges have been filed.
Another investment group involved in the conspiracy was DRT Fund, according to court filings by federal prosecutors. DRT is owned in part by De Laurentis and Reiff. DRT participated in a dozen of the 21 fixed auctions, though not the Baltimore City auction in 2006 in which Valentine’s lien was sold, according to court filings.
The Justice Department filed no charges against DRT, which came forward in the fall of 2007 and “fully and truthfully reported their own wrongdoing and that of their co-conspirators and terminated their part in the conspiracy,” prosecutors wrote in court papers filed last month.
DRT went on to sign an amnesty agreement with the Justice Department that commits it to “pay restitution to any person or entity injured as a result of the bid-rigging activity being reported in which it was a participant,” court records state.
Neither De Laurentis nor Reiff would discuss DRT’s settlement with the Justice Department.
Water Bill Woes
Some lawmakers have tried for years, with modest success, to rein in the tax-sale fees that can steamroll low-income homeowners. Maryland legislators passed a bill in 2008 that raised the minimum lien sold from $100 to $250. But a bill to prohibit cities and counties from selling delinquent water bills to investors failed in the state Senate earlier this year by a single vote.
Legislators also rejected a bill that would have prevented the sale of any lien of less than $750, as happens in some other locales outside of the state.