Wednesday, May 05, 2010

It is tax lien fraud and you may not know you are doing it

One of the biggest mistakes that you could make is telling other bidders not to bid on particular properties that you like so prices do not go up.

This is considered illegal in most states. Be wary of folks doing it and inviting you to join in these types of conversations. Some new bidders may not know this and could be doing something illegal out of ignorance.

Here is a more recent example of this issue:

An attorney was sentenced on Tuesday to one year in jail and forced to $800,000 in criminal fine for rigging bids at tax lien auctions in Baltimore and five counties, officials said.

Harvey M. Nusbaum pleaded guilty to a one-count charge of conspiring to submit non-competitive and collusive bids at tax lien auctions, according to a release from the Department of Justice.

In this example, this individual was harshly punished by the Department of Justice because he was bid rigging and the fact that he was a lawyer. It wasn't ignorance. The moral of the story: bid fairly. Don't ask others "not to bid" on your favorite properties. Remember, unlike other investments, tax lien auctions are very transparent.

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