New Questions Cast a Shadow on Operations at the Sheriff's Office

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    NEWSLETTERS

    Philadelphia Sheriff Jewell Williams

    It’s been more than three years since John Green, who held the office of Philadelphia Sheriff for over two decades, stepped down from his post amid political pressure and intimations of cronyism, mismanagement and possible corruption within his office.

    But, despite promises of reform, some of the problems that plagued the office in the past seem to have continued under the watch of current Sheriff Jewell Williams, according to new findings in a continuing series on the office by AxisPhilly.

    Many of the issues revolve around the office’s Real Estate Division, which handles the public auction of properties foreclosed upon by banks or for failure to pay taxes.

    FBI raid

    In August, the FBI raided the office and removed an unknown number of records—records related not to the administration of former Sheriff Green, as suggested by the Sheriff’s Office itself and other news outlets at the time, but, as AxisPhilly has reported, to practices dating from 2011, after Green left office. After the raid, Michael Riverso, a worker in the real estate office brought on full time in 2011, was suspended. Subsequently, AxisPhilly has learned, he was terminated.

    Riverso is the cousin of Barbara Deeley, who served as interim sheriff in 2011, after Green stepped down. Another company doing title work for the office under Williams, Patriot Land Transfer, at times has employed Riverso’s sister, Joann Riverso-Natalone.

    A city executive order prohibits the hiring of relatives, but the independently elected Sheriff’s Office isn’t bound by it. As a rule, the office operates under the patronage system.

    The FBI has made multiple visits to the office since August, removing additional records. Meanwhile, AxisPhilly has learned of the termination of a second employee who worked beside Riverso in the Real Estate Division: Phillip Kemmerer, who was dismissed December 20.

    The sheriff declined to confirm or comment upon that dismissal, which AxisPhilly confirmed via knowledgeable sources and city personnel records.

    What these terminations mean isn’t clear—but they suggest ongoing concern over how the office has handled sheriff sales.

    Bid assignments

    Sources with direct knowledge of the August FBI raid say that among the materials sought were records related to “bid assignments,” the practice by bidders at a sheriff’s auction of selling their bid interest in a property before—or possibly without—actually purchasing the property itself.

    Normally, a successful bidder at a sheriff sale is required to pay 10 percent of the purchase price as a deposit, with the remaining 90 percent balance to be paid within 30 days. If the sale is not closed by then, the Sheriff’s Office has granted buyers an additional 30 days to settle.

    Joe Blake, a spokesman for the Sheriff’s Office, said in a statement that the sheriff issued a new policy on September 1st, explicitly ending the 30-day extensions and requiring all bidders to settle within 60 days at the most, and only after an extension request is approved in writing by the sheriff.

    “The extension policy before September 1st, which goes all the way back to the administration of John Green,” he added, “granted extensions across the board and was not discriminatory in any way”—meaning that all bidders were allowed the full 60 days to pay.

    But, in examining records of sales from earlier last year, AxisPhilly found many examples of cases, usually involving a select handful of bidders, in which the file remained open much longer than 60 days, sometimes more than half a year.

    Nearly a dozen sources with whom AxisPhilly spoke, some who have worked inside the Sheriff’s Office, others frequent bidders well acquainted with the sheriff sale process, say that some prospective buyers placed their bids with every expectation that the Sheriff’s Office would grant them indefinite time to settle up. They then took advantage of this extra time to find third parties to buy their bid interests.

    “They were buying huge blocks of property—and over time they built relationships,” with the Sheriff’s Office, says one developer who spoke on the condition of anonymity, “which afforded them the ability to not have to settle for any period of time.”

    In these cases, the winning bidders were effectively able to engage in low-cost, or virtually no-cost, speculation on the property by paying only the 10 percent down payment, then nothing until they were able to sell the property, presumably at a price that recovered the initial down payment as well.

    Long extensions

    The reselling of a bid isn’t by itself against the law, according to multiple legal experts with whom we spoke. And while the Sheriff’s Office might be expected to abide by its own stated rules when it comes to the enforcement of time limits to settle a property, it’s doubtful that the office was violating the law by permitting these long extensions, according to Irwin Trauss, a Philadelphia attorney long acquainted with sheriff sales.

    That said, a sale that has gone over its allotted time, or otherwise failed to meet the requirements of the Sheriff’s Office is supposed to be marked “Terms of Sale” not met in the sheriff’s computer system, which in theory ends the sale. The property is then effectively placed back in the queue for later sale.

    But sources say the Sheriff’s Office had no process to automatically mark sales that had exceeded the time limit. The power to extend a sales deadline, they say, lay in the hands of the employees of the sheriff’s Real Estate Division.

    A preliminary review of sales from earlier last year by AxisPhilly showed that most bidders appear to have settled with the normal deadlines. However, some buyers not only held onto their bids indefinitely, but marketed the properties which they bid upon—but not purchased—as being for sale in real estate listings, often advertising them for periods of six months or longer.

    Coincidentally or not, it was just a week after AxisPhlly first sent a list of questions to the sheriff in August, including some involving its policy around settlement extension requests, that the office announced its new policy on extensions.

    New internal policy

    Sources say that the sheriff also announced a new internal policy restricting which employees would be permitted to mark sales as “Terms of Sale” not met, or incomplete, in its computer system.

    Despite recent protestations by Sheriff Williams that his office “welcome[s] any questions and inquiries of our operation,” the office has been unwilling to comment on other aspects of its operations.

    The office has not, for instance, become any more forthcoming about firms and individuals whom it has contracted for outside services, a question AxisPhilly raised three months ago, when we found that the Sheriff’s Office had failed to send many of its contracts to the city’s Law Department for approval, as required by the city charter.

    An examination of new reports shows the office reporting even fewer contracts since then. The most recent quarterly report by the city’s Finance Department listing “non-competitively bid contracts,” includes not a single company as working for the sheriff, though the office has by its own admission several contractors.

    This practice continues despite the fact the sheriff signed a Memorandum of Understanding with the administration explicitly promising to have all contracts approved in this way.

    In a statement, city spokesman Mark McDonald wrote that “The Nutter administration acknowledges that there is some number of contracts signed by the Sheriff’s Office that have not gone through the Finance Department and Law Department,” but that “since his election, Sheriff Williams has been rebuilding the business practices and other policies of the Sheriff’s Office and the administration supports him in this effort.”

    An audit of the sheriff’s compliance with the Memorandum of Understanding promised by City Controller Alan Butkovitz in this fall has yet to be released. Bill Rubin, a spokesman for the Controller’s Office, says that it has been outsourced to a consultant and that the audit was being reviewed for quality and compliance. Rubin said the audit was “a priority” and that he expects it to be released soon.


    The story was published through a news content partnership between NBC10.com and AxisPhilly.org