[ quagmires ]
In 2010, Tom White discovered that his deceased father-in-law had owned an overgrown vacant lot at 4205 Boone St., in Roxborough — an address White had never visited.
It wasn't inconceivable that his father-in-law had lost track of the property in his waning years. "He probably had no knowledge of it — he was an older man," says White, who is retired and lives in South Carolina.
What surprised him was that the land had recently been auctioned by the Philadelphia Sheriff's Office to cover unpaid taxes that had accrued in the years since his father-in-law's death in 2001. It sold for nearly $10,000 more than what was owed on the land, a surplus that the Sheriff must legally return to White, the executor of the estate. Like potentially tens of thousands of other former, sometimes unsuspecting Philadelphia landowners, White hasn't seen a penny.
It's not for lack of attempts to contact the office. "Either the line was busy, or nobody answered, or the mailbox was full. I had one person call me back who said she was working on 70 cases and told me to expect my money by Thanksgiving. Then she said by New Year's. Then I just couldn't reach her. Eventually her mailbox was full, too," says White, reached by phone.
It's not an uncommon story in a city full of abandoned property and its share of foreclosures. This is a glimpse of the human cost born from the smoldering wreckage left by former Sheriff John Green, who resigned after 23 years in office in January of last year amidst audits and investigations into his mismanagement of the department.
His successor, Jewell Williams, was sworn in this January. Williams now faces the daunting prospect of rebuilding the Real Estate Division of the office, which is responsible for public auctions and the return of surplus auction proceeds to individuals like White. But with the Real Estate Division in disarray — and, more to the point, with the city and state unwilling to set a precedent for handing out millions of dollars, however deservedly — Williams and White may both be waiting awhile.
The problem is that the Real Estate Division was the lucrative core of Green's disgraced administration. The City Controller in November reported that between 2005 and 2010 alone, an astounding $206 million was channeled by the division through two dubious vendors, Reach Communication Specialists Inc. and RCS Searchers Inc., both owned by a friend of Green — and at least $6.2 million in excess fees went into the vendors' coffers.
Described by departmental employees as effectively "running" the Real Estate Division, Reach Communication operated with almost no oversight or effective record keeping. Its tenure saw surplus money mishandled and few attempts made to actually contact property owners. Reach is largely the reason Tom White is out $10,000.
Reach's relationship with the office was terminated last year, leaving the division and its records in disarray. While many claims for surplus funds were processed, others went nowhere.
White and several other former landowners have filed a class-action lawsuit with Adams Renzi Law against the city and Sheriff's Office. Joseph O'Hara, a named plaintiff in the suit, says they're tired of waiting.
"You look in the paper and see headlines about how the Sheriff found $40 [million], $50 million they didn't even know about," he says, referring to $53 million in unaccounted-for surplus funds discovered in the course of the Controller's audit — funds the Sheriff's Office triumphantly announced it would be turning over to the city and state in October. "They don't care. They've made a decision to not help people like us," he says.
Williams would like to bury the case, along with the office's sordid past.
"We are trying to resolve the class-action lawsuit, that's the best way to put it," Williams says, adding he would be "open to a settlement."
But the resolution of the matter is largely outside Williams' purview: The case is being handled by the City Solicitor and also involves funds held by the city itself. Both the Solicitor and the Mayor's office refused to comment on the ongoing litigation.
"Our goal is to make sure that, if people are legitimately owed money, that we make sure they get their money," Williams says, "but it's really something that's up to the Solicitor and whatever award or agreement they come up with."
Though Williams may wish to appear deferential, the stakes are higher than he lets on. While the amounts sought by individuals may be relatively small, the outcome of the case could have far-reaching consequences.
State Treasury spokesman Michael Smith, who calls the class action "unprecedented," explains in an e-mail that the lawsuit could "permit private outside entities to intercept millions of dollars from the Commonwealth for the purpose of reuniting those funds with their owners — at a sizable cost."
Essentially, the suit alleges the Sheriff violated due process by intentionally failing to notify property owners that their land had been auctioned, for how much and how their money was disbursed. What complicates the matter is that money that sat "unclaimed" long enough was eventually transferred to the city and state, as mandated by law. The suit seeks to forcibly recover funds that may already have found their way to city and state coffers, and return it to potentially thousands of landowners — with commensurate attorney's fees and possible damages (i.e. "sizable costs") that neither the city nor the state wants to pay.
Smith adds that this precedent would effectively "eviscerate Pennsylvania's unclaimed property law," allowing lawyers "to step into the shoes of the Treasurer" in order to identify and redistribute unclaimed funds. The city runs similar risks.
Adams recently expanded the suit to include a second class of plaintiffs who were overcharged by the Sheriff's Office, following a revelation in the Controller's report that Reach had artificially inflated Sheriff sales' fees — in effect, shorting people on auction proceeds. This would open the case up, effectively, to just about anyone who had a property auctioned under Green.
Williams wants to put the suit behind him; the cash-strapped city and state hope to squash a potential liability. But caught in the middle are Tom White and the rest of Adams' clients, who likely have a bumpy road ahead to get money that, by all accounts, is rightfully theirs.
Williams says for now he wants to focus on restructuring the office to ensure that this situation can't happen again. "Our goal is to establish a claims division within the office, or, if not in the office, at least under my direction," he says, noting he's still formulating exactly what this would look like.
As the scale and severity of Green's corruption become fully apparent, some people — most recently Councilman James Kenney — have said revamping is not enough, calling for the dissolution of the Sheriff's real estate function altogether. Last year, John Kromer, a Penn professor, ran for the office, promising if elected to dissolve the agency and merge its functions with the city.
Williams rebuffs that idea: "The city cannot be the person over[seeing] the tax sale, because there would be a conflict of interest. The independence of the Sheriff's Office gives us the opportunity to be fair."
He may have a point, but it rings hollow for those who were wronged, and for the taxpayers who may be stuck with the bill when they get their day in court.