BENTON – Thousands of property owners lost money due to bid rigging at St. Clair County courthouse, according to a class certification motion in a suit against county treasurer Charles Suarez and bidders he allegedly favored.
Nelson Mitten of Clayton, Mo., filed the motion for Kevin Dvorak and Kathleen Dvorak in U.S. district court on June 15.
They claim Suarez and buyers of delinquent property taxes conspired to award as many bids as possible at the maximum interest of 18 percent.
Mitten wrote that for a property in O’Fallon, the Dvoraks paid $1,725.03 in interest on a $1,597.25 tax bill for 2007.
For a property in Lebanon, they paid $2,018.22 in interest on a $1,868.72 tax bill for 2007.
The class certification motion states that the histories of the properties were typical of the process and how it affected owners.
All owners of parcels the county sold for unpaid taxes for tax years 2006 and 2007 are included in the proposed class.
Mitten and associates previously obtained a class certification order in a Madison County circuit court action involving similar allegations.
The Madison County order remains under advisement at the Fifth District appellate court in Mount Vernon, where a panel heard oral argument on June 21.
Former Madison County treasurer Fred Bathon pleaded guilty of criminal antitrust violations in federal court in 2013.
He served time, as did tax buyers Barrett Rochman, John Vassen and Scott McLean.
Rochman, Vassen and McLean stand as defendants in both civil suits, as do Kenneth Rochman, Dennis Ballinger Sr., Dennis Ballinger Jr., and Scott Sieron.
The Dvoraks moved for class certification after District Judge Staci Yandle denied motions to dismiss their claims.
Mitten wrote that the agreement of the defendants inflated the amounts owners paid to redeem their properties.
He wrote that a property itself is not sold at an auction but the right to collect the taxes for the property is auctioned.
The bidder offering to pay the amount due and charge the least penalty interest is the successful bidder.
Mitten wrote that although the maximum penalty percentage is 18 percent, the law envisions that a public sale process will foster competition.
“If a property owner fails to redeem a property, the tax purchaser may file a petition for a tax deed,” he wrote.
“Since the amount of taxes due is frequently less than the market value of the property, the tax sale purchaser obtains the property at less than market value.”
He wrote that mortgage holders commonly redeem taxes on behalf of owners in order to preserve their interest in the property.
Penalty rates increase every six months by the initial amount, drastically increasing the amount that will be paid to redeem the taxes.
He wrote that the case would lead to a plethora of common factual and legal issues.
According to Mitten, at trial, plaintiffs would introduce voluminous evidence about each tax buyer’s bids.
“Plaintiffs will also likely be comparing each tax purchaser’s bidding during the years in question to bidding before and after the conspiracy,” Mitten wrote.
He wrote that conspiracy and antitrust claims created a common legal theory for all class members.
Paul Grote of Clayton, Aaron Weishaar of St. Louis, and Steven Giacoletto of Collinsville also represent the Dvoraks.
Garrett Hoerner and Thomas Ysursa, both of Belleville, represent Suarez and the county.