CROWN POINT — Attorneys who make money off Lake County's tax sale process would not be allowed to simultaneously hold contracts with departments that oversee the tax sale under a new rule being floated by the Lake County Board of Commissioners.
The county is in damage control mode after a Times investigation revealed a politically connected Gary attorney, Rinzer Williams III, was a managing partner for this year's most active bidder in the commissioner's tax sales in March and May.
Williams' firm, Broadway Logistics Complex LLC, targeted hundreds of properties that the Gary Redevelopment Commission first sought for donation by the county.
One of Williams' partners is Thomas Wisniewski, a serially delinquent taxpayer, who appears on video directing bids on Broadway's behalf, even though state law should have barred him from doing so because of his personal tax delinquencies.
Wisniewski owes nearly $208,000 in county back taxes, government records show.
Challenging the bids
The county now plans to challenge the Broadway bids at a Sept. 26 court hearing, attempting to declare those purchases null and void.
Williams currently holds an $84,000 legal consulting contract in which he receives a flat monthly fee of $7,000 from the Lake County Board of Commissioners.
He also serves as the Gary City Council attorney and is a consultant on a casino development project near some of the tax-sale properties Broadway purchased.
Williams' connections have raised criticism and questions surrounding conflicts of interest in the tax-sale deals.
Per his agreement with commissioners, Williams is not required to retain or submit detailed invoices, "only a monthly invoice requesting the monthly flat fee."
Contracts obtained by the Times show Williams has received $199,999 in compensation through Sept. 1 from the Board of Commissioners since inking his first contract in 2016.
The current contract expires Dec. 31, 2019. A provision in his contracts allow the county to prohibit any activity when it deems a conflict of interest with county employment.
Williams holds several other contracts throughout Lake County with local governments.
Under the new rules being proposed by commissioners, Williams and other attorneys who do work for tax-sale bidders would no longer be able to hold contacts with Lake County Board of Commissioners, treasurer's office or auditor's office.
When a person buys a tax certificate at the commissioner's tax sale, they must follow the complicated process of converting the certificate into a deed and successfully taking ownership.
Tax sales involve the auction of properties for which owners are behind on tax payments, allowing the county to recoup otherwise lost revenue.
It's a complicated process, and oftentimes attorneys are hired to carry out the title search, notification process and other work for an agreed-upon fee.
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Emails obtained by The Times show Williams asked Lake County officials in May to ignore state law and accept late payments in 2019 tax sales of delinquent properties on behalf of Broadway Logistics.
The county obliged, according to those same emails.
Ultimately, Broadway paid $430,899 in late payments over the two tax sales to secure the tax certificates won at public auction.
All told, those emails and county and state records show:
- The county auditor's office accepted late payments on two occasions from Broadway Logistics Complex, LLC totaling $430,899.
- The limited liability corporation submitted five checks totaling $415,000 and $15,800 in cash days after the deadline, as prescribed by state law, for the March and May tax sales.
- In emails to the county, Williams presented himself as the legal representative for Broadway Logistics — not as an investor with company, as he disclosed to The Times last month.
- At least one county official was aware Wisniewski, a tax-sale bidder associated with Broadway Logistics, should have been barred by law from bidding on tax-delinquent properties.
Heart of the controversy
Wisniewski is at the center of controversy after a Times investigation brought to light his participation in the county’s tax sale this year even though he’s delinquent on his personal property taxes.
In email exchanges between May 29 and 31, Lake County Auditor attorney Randy Wyllie told Williams no late payments would be accepted under state law.
“...We all know others have been allowed to make payments late — this is not an anomaly," Williams replied. "I just don't understand how the county is willing to turned (sic) down $75000.00 representing about 22% of the tax sale.”
Ultimately, Matt Fech, county commissioners' attorney, encouraged Wyllie and the tax sale office supervisor, Gina Scheidt, to accept the late payment.
In the emails, Williams told the county that he was representing a client in the matter — not that he was a managing partner for Broadway as listed on the Secretary of State's website.
Williams further disclosed to The Times last month that he was an investing partner in Broadway.
In response to The Times investigation, the Lake County Board of Commissioners will vote at its next meeting Wednesday whether to update its tax sale policy handbook.
Some of the changes merely spell out what is already established in state statute regarding ineligible bidders and bar county-contracted attorneys from participation.
Among other changes:
- Upon registering for the tax sale, bidders would have to list whether they are using a stand-in proxy bidder, and no changes could be made once the registration is approved by the auditor's office.
- The county would have a designated bidder section in the auditorium where bids take place, and only one person, with a bidding card, would be able to sit there per bidding entity. All other people would be relegated to a guest area.
- If a bidding applicant is a partnership, limited liability corporation or other corporation, or any other type of business organization, the applicant would have to identify all parties involved, including stakeholders, partners, members or owners. If any of these individuals are delinquent in paying their property taxes, the business organization would be ineligible to bid.
State law already considers ineligible bidders to be co-owners, partners, officers, majority stockholders and those with a contractual interest in property.
That was pointed out to county officials back in 2011 by the city of East Chicago. The city, through an attorney, sent multiple letters warning them about tax-delinquent bidders, including Wisniewski and LLCs connected to his name.