United We Stand, Divided We Fall

          As the citizens of my beloved Kentucky might know, the title of this post is actually our state motto. A very meaningful statement for a state which was a unforgiving frontier for new settlers such as Daniel Boone.During difficult time,  many people get in to a situation and feel helpless. Many people who receive their property Tax Collection Letter from an attorney, their first reaction would be disbelief. How a couple hundred dollar tax bill can miraculously become a $1000-2000 liability.  
            If unpaid, they state that they can foreclose on your property. Just a reminder for my readers, I am not an anarchist. I strongly believe property taxes are essential to our communities to function, but using it as a novel way to steal people's houses via foreclosure nor extortion of huge sums is completely unacceptable. There are many ways you can fight these guys. Lets discuss your options

      1- Complain to Attorney General's Office (I successfully used this approach): I can help you to draft a letter for this. But keep in mind, Mr. Jack Conway (Kentucky Attorney General) received political donations from "Tax Ease Liens". I hope he will be fair with his decision.

     2- Start a Class Action Lawsuit.  I believe  attorneys violated some of the Kentucky State Laws in their collection attempts for Property Tax Liens. If they knowingly inflated their attorney fees and overcharged beyond allowable limits stated in state laws, they should pay for damages. This will be the ideal solution and stopped them for good. This might receive some political backlash since property Tax Lien investors are the biggest spenders in Frankfort Kentucky. Business is so lucrative that, they sent one of their top employee to Kentucky, Trey Gulledge, to lobby for the company.

3-  Complain to the Kentucky Bar Association to disbar the involved Attorneys: This will be the most effective approach. Since if we can prevent certain attorneys (the ones that break the law) to take these cases, we can open the field to the ethical attorneys.

Al Capone would loved Property Tax Liens

      Property Tax liens are very attractive to many investors with very high potential interest rates. A whopping 12% yearly interest rate it can be very lucrative for an average investor. Only problem is the time consuming collection process and the hassle of hiring attorneys for the collection when needed. Companies soon realized that amazing profits were hidden within the so called attorney fees not the interest rates itself. It is not unusual for a 100$ tax lien to amount to 3000-4000 when hefty attorney fees added through foreclosure process. Attorney's will buy minuscule tax liens just for the privilege of charging such fees.

   If the defendant is an estate in a rural parts of Kentucky, they can obtain valuable property for almost pennies. It is very hard to believe that investment companies will let their independent attorneys make a killing why they are collecting their lowly 12% yearly profits. Given the lobbying efforts and money spent by "Tax Ease Liens" in Frankfort Kentucky, I highly suspect that bulk of the attorney fees might be funneled back to the company coffers instead of the attorney. Of course this sounds like a far fetched conspiracy theory but it will be very interesting to see what IRS thinks about this. By following who is paying taxes on the profits from this amazing investment scheme, your can find where the cheese is?

   Does this sound familiar to you? Remember Al Capano went to jail for tax evasion, not for his unaccounted murders.Contact me at lachinhatemi@gmail.com if you are being contacted by Tax Ease Liens.

What is a reasonable Attorney Fee?

 In Webster Dictionary, "Reasonable" is defined as "according to the rules of logic". As law states, in collection process for property tax liens reasonable attorney fees can be charged and the upper limit for those fees are stated depending on the face value of the tax lien. But in legal logic, what is reasonable? 
        Some attorney might say, his standard fee is 2000$ per hour and charge his clients accordingly. And client has the option to choose that lawyer for whatever task they have at hand. In a free market, market decides the fee. Unfortunately, in property tax liens, the payor of the attorney fees actually do not have any control over the fees which is why we need the existing state laws.
      But what is not reasonable is easier to define. For example, an attorney cannot charge a different rate for same amount/kind of work depending on a client. Such an action will be discrimination and Respective Bar associations discourage their members from such practices. By this logic you cannot change a different attorney fees for similar property tax liens purchased at the same time and are at the same stage of collections. It does not take more work to collect a $300 tax lien versus a $700 tax lien. Such practice should be reported to the Bar Association as a discriminatory practice.

Steven Beshear's 2009 Law for Tax Liens

     Kentucky Governor, Steven Beshear, signed the law in 2009, which suppose to regulate the major players in property tax lien investing. The new law required individuals and entities who purchase three bills in one county, five statewide or more than $10,000 worth to register with the State Department of Revenue and be in good standing with the Attorney General’s Office of Consumer Protection.
            This law is especially important since if you successfully prove the Attorney General's Office any wrongdoing, then you should be able to move the registered companies name from the list of buyers. This will simple prevent them from conducting any more business in Kentucky.
      The Kentucky County Clerks Association supported the legislation, which was introduced by state Rep. Arnold Simpson D-Covington. May be we can ask Mr. Simpson to help our cause when we encounter a bad player. When I heard about Mr Simpson's involvement in this law, I contacted him via e-mail. He was very helpful and ready to listen to our cause. Unlike Governor Beshear or Attorney General Jack Conway, he is not a beneficiary of generous donations from Tax Ease Liens. We will appreciate his input in our growing struggle in regulating this market.

Tax Ease Lien Investments Lobbyist

Tax Ease Lien Investments lobbying very heavily in Kentucky. Since its owner Mr Migicovsky picked only  Governor Beshear and Attorney General Jack Conway to donate, it would be interesting to see where the money is going. tax Ese lines even sent their Vice President of Development to Kentucky as a registered lobbyiest. I would like to remind everybody Kentucky is not for sale! I would like to see who they are lobbying too hard.

Here are the Registered lobbyists for Phil Migicovsky.

Tax Ease Lien Investments 1, LLC                                         214-420-5931         

      Gulledge, Trey                            14901 Quorum Drive, Suite 900, Dallas TX 75254

          Bentley, Jason R                                                            502-875-1176                                                                 
          MML&K Suite 308, 305 Ann Street, Frankfort KY 40601

          Cutter, Sean M                                                              502-875-1176                                                               
          MML&K, 305 Ann Street, Suite 308, Frankfort KY 40601

          Gulledge, Trey                                                              214-420-5931                                                             
         14901 Quorum Drive, Suite 900, Dallas TX 75254

          Higdon, James M                                                          502-8751176                                                                                                      
          MML&K, 305 Ann Street Suite 308, Frankfort KY 40601

          Hoosier, Dawn                                                              214-420-5931       
         14901 Quorum Drive, Suite 900, Dallas TX 75254

          Lambert, Charles                                                           502-875-1176                                                       
          MMLK, Suite 308, 305 Ann Street, Frankfort KY 40601

          McBrayer, W. Terry                                                      502-875-1176                                                     
          305 Ann Street, Suite 308, Frankfort KY 40601

          Nolan, Chris                                                                  502-875-1176                                                     
          MML&K, 305 Ann Street, Suite 308, Frankfort KY 40601

          Wilson, Marc A                                                             859-525-4901                                                               
           8459F US 42, Box 161, Florence KY 41042

James Ballinger a Jefferson county attorney filed for a lawsuit which questions pre-litigation charges. The lawsuit alleges that the Jamos Fund I LP, of Fort Thomas, Ky., is violating that stipulation by tacking on exorbitant legal fees before the year expires, merely for sending notices to taxpayers that their bills have been purchased.

    This is amazing news. Companies that buy delinquent property tax bills are charging unnecessary, exorbitant and illegal legal fees to owners who want to reclaim their property -- and preying on the elderly and unsophisticated, according to a lawsuit filed in Jefferson Circuit Court.he suit, filed earlier this month on behalf of an 86-year-old woman and two other plaintiffs, says that charging attorneys' fees, often within a year after the sales, is both unlawful and unethical. He said that the suit is the first of its kind filed in Kentucky and that the state's courts have never decided whether pre-litigation expenses can be charged during the year after a tax certificate is purchased.
      Now here is the catch, Mr James Ballinger also represents American Tax Funding Servicing. Now this is bizarre. A vulture taking another vulture to court of law?

Interesting connections In Kentucky Property Tax Lien Market

                                     A  JPMorgan Chase & Co. subsidiary is among at least three companies being investigated as part of a U.S. Justice Department antitrust probe of bidding at municipal tax-lien auctions in New Jersey. Idea was simple, creating multiple entities and outbid the market. Collusion is illegal because it's main purpose is to deceive regulatory bodies to believe that they are dealing separate entities but instead all the profits are channeled to the same umbrella entity in the end of the day. It is an illusion of competative markets to the outsider.
                                  Since market is very lucrative, collusion is a very tempting route for experienced attorneys. Third party tax lien buyers needs to declare if they are related to a previously registered buyer.

                            An interesting relationship exists between Lexington Kentucky based Kentucky Tax Lien Fund LLC and Florida based American Tax Funding LLC. KTLF was registered by the law firm attorney Scott Budnick of WYATT, TARRANT & COMBS and Mr. Bradford Cowgill, a lexington attorney, was listed as the organizer. WYATT, TARRANT & COMBS is also the same lawfirm who is in charge of collection efforts of "American Tax Funding LLC.", another tax lien buyer. All this can be a conspiracy theory coming out of my simple mind. It will be very interesting to find that who is funding KTLF and Mr. Bradford Cowgill.