Property owners challenge board chairman and auctioneer's motions to dismiss

By Ann Maher | Jun 11, 2014

Distressed property owners who claim they were victimized by a scheme that sent former Madison County Treasurer Fred Bathon and three tax buyers to prison oppose County Chairman Alan Dunstan's motion to dismiss their class action lawsuit.

On May 29 they refuted Dunstan's argument that he did not have the power to oversee Bathon. To support their argument, plaintiffs cited two provisions of state law involving the supervision of a treasurer by a county board.

"If a county guilty of any other misconduct in his office, the county board may remove him from office," states the plaintiffs' memorandum, citing 55 ILCS 5/3-10020.

The plaintiffs, represented by Nelson L. Mitten of St. Louis, John Barberis of St. Jacob, and others, also say that under 55 ILCS 3/3-10015, a county board has the power to examine a county treasurer under oath regarding his or her faithful discharge of duties.

"Thus, it is clear from these provisions that the County Board, and concomitantly its chairman Dunstan, had the authority to take action when it became apparent to them that the actions of the County Treasurer were illegal," Mitten wrote. "Dunstan's failure to take such action constitutes a breach of his fiduciary duty as head of the body to take such action."

Bathon, who pleaded guilty to violating the Sherman Anti-Trust Act, was sentenced to 30 months in prison in December following conviction on rigging property tax sales in a way that eliminated competitive bidding and increased interest rates for the tax buyers, in exchange for campaign contributions.

Tax buyers Scott K. McLean, John A. Vassen and Barrett Rochman also pleaded guilty to participating in the pay to play scheme and were sentenced in federal court earlier this year. McLean received 18 months, Vassen, 24 months and Rochman, 16 months.

After Bathon was charged, property owners filed three separate class actions in Madison County seeking restitution for their losses.

Clinton County Circuit Judge Dennis Middendorff was selected to preside over the cases, which he consolidated in April.

In another recent filing, the plaintiffs also oppose a motion to dismiss brought by former county employee Jim Foley, who ran tax sale auctions under Bathon's administration.

They challenged Foley's argument that plaintiffs failed to adequately plead a civil conspiracy against him, saying that a review of the allegations "clearly" establish the elements of a civil conspiracy and his involvement with it.

The end results of the auction process - in which bids were rigged, prices were fixed and competition was eliminated - "could result only if Foley, as the auctioneer, was involved in the conspiracy on some level by accepting the improper and illegal bids," states the plaintiffs' memorandum.

It was signed by Mitten, Barberis, Aaron Weishaar of St. Louis and Steven Giacoletto of Collinsville.

Madison County case number 13-L-276.

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