Newspaper investigation links Chicago lawyer to controversial tax-lien business
In a lengthy investigative report Sunday on Aeon Financial, a secretive company that buys liens on properties for often paltry sums and charges owners thousands in fees to prevent foreclosure, the Washington Post offered what it believes are “clues to Aeon’s ownership” in corporate and court records—and names Chicago lawyer Mark Alan Schwartz.
Aeon operates from mail-drop boxes in Chicago, the Post reports, and Schwartz’s law firm, which represents the company, is listed as being at a 7,200 square foot, $1.7 million estate near Vail, Colo.
The Post noted that Schwartz did not respond to requests for comment. The Avvo listing is for Tax Lien Law Group, LLP, and the address on Wacker Drive, in an exclusive downtown area, is for a UPS store with drop boxes. The listing includes a telephone number.
After the Journal left a message for him on Monday, Schwartz responded via email, attaching a letter addressed to the two Post reporters. In it, Schwartz doesn’t address Aeon’s ownership, so apparently he does not deny that it is he, but he does go into detail in defending his work.
The Post writes that Aeon has managed to “move from city to city with little government scrutiny, taking in millions from distressed homeowners.” In September, the Post published the first of now four investigative stories on tax-lien investors, finding they foreclosed on hundreds of properties owned by the old, disabled and poor.
The investigative reports includes a look at Aeon’s work in the Cleveland area.
One D.C. homeowner, a retired teacher named John Kazemi, challenged Aeon in court. The company in 2007 bought a $500 lien on his condominium parking space in Washington. The city tax office had mistakenly been mailing annual bills to the former owner, and Kazemi had been unaware of the need for payment.
When Kazemi’s lawyer contacted Schwartz, he got this response: “Let’s litigate it. My pleasure.”
A judge cut Aeon’s claim for $4,200 in fees and costs down to $952.
The D.C. attorney general’s office sued Aeon in 2009, alleging abusive and unlawful practices. There has been no ruling in the matter. Now former D.C. attorney general Peter Nickles, who launched the litigation, told the Post the city should continue the case and find out the company’s ownership.
Schwartz, in his letter (PDF) to the reporters, argues that he is providing “an invaluable public service” by getting the property taxes to the “cash-strapped cities and counties” for “schools, police and infrastructure.”
Schwartz lays blame on the Washington, D.C. tax bureaucracy’s “error-plagued management and accounting,” which led to many undeserved tax liens, and he notes that the Washington Post’s story in September detailed this problem.
In fact, he says, Aeon had to sue D.C. over this problem because the jurisdiction, by its own law, must pay the company its legal fees in matters where tax sales are canceled because administrative errors are discovered later. Schwartz wrote that the suit against him was a result of his suit against the city for his legal fees in cases of mistaken tax liens.
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