Madison - St. Clair Record

Tuesday, October 15, 2019

St. Clair County treasurer, tax buyers seek to exclude engineer's testimony in bid-rigging class action

By Heather Isringhausen Gvillo | Feb 1, 2017

St. Clair County Treasurer Charles Suarez and several tax buyers accused of participating in a bid-rigging conspiracy seek to exclude an engineer’s testimony, arguing that his opinion is not based on "reliable principles or methods."

Joe Vassen, John Vassen and V.I. Inc. filed a motion to exclude the opinions of Dr. Carl Peters on Dec. 23 through attorney Paul T. Slocomb of Hoffman & Slocomb LLC in St. Louis.

Peters has a PhD in engineering and claims he is qualified in the field of statistics, specifically descriptive and inferential statistics.

Descriptive statistics deals with the presentation and collection of data. Inferential statistics involves drawing the right conclusions from the statistical analysis that has been performed using descriptive statistics, the motion states.

The defendants allege Peters admits that he has only performed a descriptive statistical analysis of the case and that he never personally saw any type of delinquent real estate tax auction when comparing the information to neighboring Madison County.

“Dr. Peters admits that he assumed that the guilty pleas of several of the Tax Buyers and the Treasurer proved that there was, in fact, bid rigging in Madison County; however, Dr. Peters admits that he did not consider the fact that no one has been charged or even investigated as it relates to the St. Clair County Tax Sales,” the motion states.

The defendants also allege Peters did not consider individual tax buyer’s bidding patterns or habits, as well as other unique characteristics for each tax purchase.

The defendants seek to have Peters’ opinions excluded, which they say “is not based on sufficient facts or data.”

“His testimony is not the product of reliable principles and methods. Dr. Peters has not reliably applied any principles and methods to the facts of the case,” the motion states.

The defendants say Peters did not employ “technique or theory.”

“Instead, Dr. Peters’ opinion is simply a subjective, conclusory approach that cannot reasonably be assessed for reliability. No regression analysis or other statistical analysis was used. Dr. Peters also has failed to adequately account for obvious alternative explanations,” the motion states.

Defendants Barrett Rochman, Kenneth Rochman, Sabre Group LLC and SI Securities filed a joinder of the motion to exclude on Jan. 11 through attorneys Andrew Kasnetz, Timothy Sansone and Natalie Kussart of Sandberg Phoenix & von Gontard in St. Louis.

Defendants Dennis Ballinger Sr., Dennis Ballinger Jr., Empire Tax Corp. and Vista Securities Inc. also filed a joinder of the motion to exclude on Jan. 12 through attorney Daniel Delaney of Drinker Biddle & Reath LLP in Chicago.

Defendants St. Clair County and Charles Suarez filed a joinder of the motion to exclude on Jan. 13 through attorney Garrett Hoerner of Becker Hoerner Thompson & Ysursa in Belleville.

Plaintiffs Kevin and Kathleen Dvorak filed a memorandum of law in opposition to the defendants’ motion to exclude Peters on Jan. 13.

They argue that Peters formed his opinions based on the available data on tax sales from St. Clair County, Madison County and 30 other Illinois counties.

“No issues have been raised concerning the reliability of the underlying data used by Dr. Peters,” the opposition states.

Further, they allege Peters chose his method, because “this is not a simply average bid.”

The plaintiffs argue that Peters’ opinions are “relevant and reliable,” and contain no errors in his calculations or analysis.

“Although the gross disparities in penalty bid rates during the same time period between St. Clair County and other Illinois counties (other than the admittedly anti-competitive Madison tax sales) is a comparison Defendants surly want to avoid, it is a relevant one,” the opposition states.

The plaintiffs add that because Peters looked at 30 other Illinois counties for the same time period, the higher rate increases in St. Clair County are not “anomalies.”

According to the complaint, two couples sued Suarez and tax buyers in the U.S. District Court for the Southern District of Illinois on Oct. 17, 2014, alleging a conspiracy similar to one that sent former Madison County treasurer Fred Bathon to prison.

John Bloyer Jr., Adrianne Bloyer, and the Dvoraks, all of O’Fallon, claim the alleged conspirators artificially inflated interest rates at tax sales in 2007 and 2008. They claim Suarez illegally rigged bids at sales of delinquent taxes to enrich Democratic campaign contributors.

U.S. District Court for the Southern District of Illinois case number 3:14-cv-01119-SMY-RJD

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Becker, Hoerner, Thompson & Ysursa St Clair County U.S. District Court for the Southern District of Illinois

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