Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Tax lien industry executive pleads guilty to rigging bids at New Jersey municipal auctions, (May 12, 2014)
Organizations Mentioned:M.D. SASS Investor Services, Inc.
By Jeffrey May, J.D.
An ongoing federal investigation into bid rigging and fraud at auctions for the sale of municipal tax liens in New Jersey has netted another guilty plea, the Department of Justice announced today. Vinaya K. Jessani, a former New York-based tax liens company executive, has pleaded guilty to the charge in a one-count felony information filed in the federal district court in Newark on May 12.
According to the charge, Jessani, a former senior vice president who supervised the purchasing of municipal tax liens at auctions in New Jersey for an unnamed company, conspired to rig bids from 1994 until February 2009. Jessani and those under his supervision submitted bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates, it was charged.
Although Jessani's employer was not identified in the court document, he had worked as a vice president for investment management firm M.D. SASS Investor Services, Inc. When Jessani was named treasurer of the National Tax Lien Association more than a decade ago, the industry trade association said that Jessani founded the tax lien investment division at M.D. SASS. M.D. SASS has not been charged by the Justice Department with any wrongdoing. However, the company has been named as a defendant in at least one putative class action.
Jessani's plea marks the 15th in the investigation. Eleven other individuals and three companies have pleaded guilty to charges arising from the probe. In addition, last November, the Justice Department announced four individuals and two related companies were indicted by a federal grand jury in Newark for their role in the alleged scheme.
The government has alleged that, as a result of the conspiracy, the conspirators were able to purchase tax liens that earned higher interest rates. As a result, property owners were forced to pay higher interest rates, sometimes as high as 18 percent, on their tax debts than they would have paid had their liens been purchased in open and honest competition.
Companies: M.D. SASS Investor Services, Inc.
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