Bid-Rigging Attorney Gets 12 Months In 5-Year, $10 Million Conspiracy At Baltimore-Area Real Estate Tax Lien Auctions

In Baltimre, Maryland, The Maryland Daily Record reports:

• Baltimore County lawyer and real estate investor Harvey M. Nusbaum was sentenced Tuesday to a year and a day in federal prison for his role in a five-year, $10 million bid-rigging conspiracy at tax lien auctions in Maryland. The Justice Department’s Antitrust Division had requested an 18-month sentence, while Nusbaum’s attorney recommended a term of home detention coupled with daily community service, arguing Nusbaum did not know he was committing a crime. U.S. District Judge J. Frederick Motz doubted Nusbaum’s claimed naiveté throughout the day-long hearing, asking about the 72-year-old defendant’s “moral compass.”

***

• Nusbaum, who was indicted along with longtime friend Jack W. Stollof in June and pleaded guilty in February, must also complete 100 hours of community service and serve two years of probation. In keeping with his plea, he must pay $800,000 in restitution, $250,000 of which he has already paid. He will also lose his law license and not be able to work as an accountant or participate in tax lien auctions, according to his attorney, Paul Mark Sandler.

***

• The hearing featured a previously undisclosed star witness for the government: John K. Reiff, an attorney, who, along with law partners Anthony J. De Laurentis and Richard Turer, formed an investment fund tax lien that conspired with Nusbaum, Stollof and others to rig bids.

• Nusbaum’s and Stollof’s names have been in the news for years, thanks to The Baltimore Sun’s 2006 investigation into the problem of ground rents in Maryland. Co-conspirator Steve L. Berman pleaded guilty in June 2008. Reiff and his partners’ involvement had not been made public before Tuesday. (Berman, who did not testify Tuesday, is scheduled to be sentenced later this month.) Thanks to an amnesty agreement reached with federal prosecutors, Reiff will likely have to pay restitution but has not pleaded guilty to any crime, and he, De Laurentis and a third man, John E. Reid, still operate a law office in Highlandtown. Neither De Laurentis nor Turer testified Tuesday.

• Speaking in a low voice, Reiff detailed how he and his co-conspirators met before or at 10 auctions in Baltimore City and Anne Arundel, Baltimore, Montgomery and Prince George’s counties to make sure they didn’t bid against one another, or “beat each other up,” creating what he called a “sort of round-robin effect.” Reiff said he and his partners bought approximately 5,000 liens from 2003 to 2007, a period in which their firm, then in Columbia, was bidding on behalf of investor clients.

• Two of those clients have come under legal scrutiny elsewhere for alleged bid-rigging: Bank Atlantic has been sued in federal court in Chicago, and Mooring Tax Asset Group has been subpoenaed in a New Jersey antitrust grand jury investigation.

For more, see Lawyer, 72, sentenced for bid-rigging conspiracy.

Go here for more on bid rigging at real estate-related auctions.