Lawyer to enter guilty plea in tax sale bid-rigging case 

Posted: 7:02 pm Thu, February 4, 2010
By Brendan Kearney
Daily Record Legal Affairs Writer

Baltimore County lawyer and real estate investor Harvey M. Nusbaum will plead guilty next week in the federal case against him for conspiring to rig bids at tax lien auctions.

Nusbaum, 71, who pled not guilty along with longtime friend and co-conspirator Jack W. Stollof when they were indicted in June, will be rearraigned on Feb. 12.

“The purpose of the rearraignment is for Mr. Nusbaum to enter a guilty plea pursuant to a satisfactory agreement with the Justice Department,” Paul Mark Sandler, who has represented Nusbaum, said Thursday, shortly after the U.S. District Court clerk filed the notice. Neither Sandler nor a spokeswoman for the Justice Department’s antitrust division would reveal the details of the agreement or say what prompted the plea.

A woman who answered the phone at Nusbaum’s Pikesville law office said Nusbaum could not be reached on Thursday.

“There’s no one that can talk to you,” she said, before hanging up the phone.

Nusbaum’s trial had been scheduled for March 1.

Stollof and Nusbaum were charged with violating the Sherman Antitrust Act after a years-long FBI investigation into the small number of major players in the Maryland tax sale market, including raids of the men’s real estate offices in August 2007.

They were accused of splitting the properties up for auction in several counties in the Baltimore-Washington metropolitan area.

Stollof, a 74-year-old businessman, pleaded guilty a month ago and is scheduled to be sentenced on March 25. Stollof was not planning to testify against Nusbaum, his attorney, Joshua R. Treem, confirmed.

According to Federal Sentencing Guidelines, the men could face one to three years, depending on the volume of commerce — maybe tens of millions of dollars — deemed to have been affected by the bid-rigging. But their advanced age could also play a role in their prescribed punishment.

Anticipation of the pleas flowed from a Dec. 4 ruling by Judge J. Frederick Motz that precluded Stollof and Nusbaum from arguing they were operating as a joint venture. Motz called it “immaterial” that the men had disclosed to their lenders that they were teaming up.

“In effect, their argument is tautological: bid-rigging constitutes a joint venture and therefore we can defend against a charge of bid-rigging on the ground that we were participating in a joint venture,” Motz wrote. “This argument makes no sense and flies in the face of the well established principle that price-fixing cartels are per se illegal.”

Alleged co-conspirators

Nusbaum and Stollof, along with family members, were named as aggressive investors in ground rents in a 2006 Baltimore Sun investigative series.

Among other defenses, the men were expected to argue there might have been multiple conspiracies, but not the one overarching scheme alleged in the indictment.

Alleged co-conspirator Steven L. Berman pled guilty in June 2008 to participating in a bid-rigging conspiracy. Berman, 51, has agreed to pay a $750,000 fine and could face prison time. He was expected to testify at Nusbaum’s trial, as were some of the other alleged co-conspirators who were not charged in the case.

“That’s about it,” Geoffrey R. Garinther, who represents Berman, said of Nusbaum’s planned plea, “but for finding out what everybody gets in this case.”