Northeast Revenue Service boosting Luzerne revenue

June 3, 2012

By Dave Janoski (Staff writer) This e-mail address is being protected from spambots. You need JavaScript enabled to view it

WILKES-BARRE - In 2010, Luzerne County privatized its Tax Claim Bureau, which collects back taxes and seizes and auctions properties for delinquent taxes, following revelations that politically connected landowners had escaped tax sales despite owing several years' worth of taxes.

The company hired to take over the bureau, Northeast Revenue Service LLC, has increased collections, boosting the county's annual revenue from back taxes and tax sales by more than 20 percent. But $16 million in delinquent county, school and municipal taxes, some dating from the 1980s, remain unpaid.

Some of those taxes are attached to properties now in the hands of governments or economic development agencies that have been granted government waivers, Northeast Revenue Service President John Rodgers said. In other cases, property owners have declared bankruptcy, making the taxes currently uncollectable.

Mr. Rodgers said his company is aggressively pursuing others in court.

But the question of how and why the Tax Claim Bureau allowed some property owners to go decades without paying taxes while others had their properties sold off remains unanswered.

"It was shocking the stuff we found," Mr. Rodgers said. "Some of them went back to the '70s when we took over. I don't know exactly how they did it, but it went on forever."

In 2009 and 2010, FBI agents reviewed county records of properties that had been listed and then de-listed for tax sales and interviewed bureau employees, but no charges were ever filed.

"The investigation was closed and no further action is being considered," a spokeswoman for the U.S. attorney's office, Heidi Havens, said in an email exchange last week. The office declined further comment.

Longtime tax claim director Virginia Augello, who retired in early 2006, said she operated the bureau in conformity with state real estate tax laws.

"I didn't do anything unless it was approved by the commissioners or our office's solicitor," Ms. Augello said in a phone interview last week.

Ms. Augello, the wife of Senior County Judge Joseph M. Augello, said she was not interviewed by the FBI about her leadership of the bureau.

Former county Commissioner Stephen A. Urban, who now serves on the county council under the new home rule form of government, said the hiring of Northeast Revenue Service, which keeps 5 percent of delinquent taxes it collects, is a good deal for the county, which has experienced increased revenue and personnel savings. Northeast Revenue Service collected more than $32 million in 2011 for the county, school districts and municipal governments.

"I think they're doing a heck of a good job compared to what used to go on there. That's why we contracted out in the first place," Mr. Urban said.

But the effects of years of lax enforcement still linger.

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