EDWARDSVILLE — Madison County Treasurer Kurt Prenzler on Friday applauded an appellate court’s denial of the county’s appeal of a court order to certify a class action lawsuit involving victims of a tax auction bid-rigging scheme that sent former Treasurer Fred Bathon to federal prison.
According to an article on the Madison Record’s website, a judge certified the class action in June. The county then petitioned the Illinois Appellate 5th District Court to review the class certification.
The plaintiffs claim they paid approximately $2 million in excess interest on delinquent taxes because of corruption at county-run auctions of tax-delinquent properties from 2005 to 2008. Their suit seeks damages from Madison County and three tax buyers who pleaded guilty to the bid-rigging scheme.
“I applaud Judge (William) Becker’s decision to certify the class, and the Appellate Court for denying the defendants’ appeal,” Prenzler said in a press release.
Prenzler said the class should be certified because the victims should receive restitution.
“It’s time for State’s Attorney Tom Gibbons and County Board Chairman Alan Dunstan to get on the right side of this issue and help the defrauded homeowners,” he said.
The Madison Record article quotes Gibbons as saying that those responsible for the crimes should pay restitution instead of the county’s taxpayers.
According to Prenzler’s statement, the county benefited by about $2 million when Bathon lost his pension, which has reduced the county’s unfunded pension liability.
Prenzler said Gibbons could use two county funds to settle this case — the Sale and Error Fund, which is approximately $500,000; and the Indemnity Fund of about $1 million — and then seek to recover the money from Bathon and others.
“Gibbons and Dunstan should stop protecting the tax buyers who benefited financially and find a solution to provide restitution to the victims,” Prenzler said.
Tax auctions are supposed to function as reverse auctions, where the bidder offering the lowest interest rate to delinquent property owners is sold the property. Instead, federal prosecutors said Bathon rigged the auctions so his political allies would be able to purchase the properties for the maximum statutory interest rate.
Bathon was released from prison in June.