Missing Money Found, Misled Citizens Defrauded, Misdeeds Go Unpunished

(November 2011)

The news that nearly $56 million had been recovered from the bowels of the Sheriff’s Office’s sloppy bookkeeping was welcomed by government officials, but the former owners of properties sold at sheriff sale who are due much of that money continue to be victimized by government ineptitude.  City officials preened in announcing that the funds – including unclaimed proceeds of sheriff sales over the last dozen years when property sales generated more than the amounts owed for past-due mortgages, taxes, and utilities – would be transferred to the City’s General Fund and State Treasury.  But, that money was not just misplaced, it was misappropriated; taken from those who were lawfully due the funds.  Unless they act deliberately and quickly to return the money to the rightful recipients, the Sheriff, Controller, and Mayor are working to benefit government balance sheets instead of the helpless property owners.

State law governs what is to happen when properties are sold at sheriff sale to enforce judgments against property owners who owe back mortgage, tax, and utility payments.  According to the law, after the sale, the Sheriff is responsible to prepare a schedule of proposed distribution of the proceeds of the sale, which is to be kept on file and be available for inspection.  The Sheriff is also legally required to distribute sale proceeds pursuant to the schedule of distribution to pay judgment debtors as well as Sheriff’s costs.  Proceeds of the sale in excess of those debts and administrative costs must legally be distributed to the former property owners.  

Much of the $56 million in funds that are being transferred to the City and the State is actually owed to the former owners of properties that were lost in foreclosure or tax sales.  While some property owners are undoubtedly hard to track down, many have been working for years to recover their money and they should absolutely receive their payments before their money is given over to the City or State.

Marie Virelli, a South Philadelphia widow, is the former owner of a home that was sold at sheriff sale in 2006 to pay a judgment of less than $12,000 in back taxes and assessed damages.  The home sold for $13,000, more than $1,000 more than what was owed, but Virelli never received the funds she was due.

Joseph O’Hara of West Philadelphia owned a property that sold at sheriff sale in 2010 for about $9,000 more than what was owed in back taxes and other costs.  Despite repeated inquiries to the Sheriff’s Office, O’Hara received nothing but the run-around and has never recovered any of the money owed to him.

Virelli, O’Hara, and thousands of other property owners victimized by the incompetence – or worse – of the Sheriff’s Office have sued to recover their money.  But, the move to transfer the money “found” in Sheriff’s accounts to the City’s General Fund and State Treasury could further complicate the plaintiffs’ efforts to receive what is legally theirs.

City officials are happy to take hold of the money to help paper over the city’s ongoing fiscal crisis when they should be working to do right by the victims of these misdeeds.  The victims in these cases have suffered enough and should not be forced to jump through any more hoops or bear any additional burdens to get what is lawfully theirs.

Law-enforcement authorities are apparently looking into this mess to determine if the gross negligence by the Sheriff’s Office rises to the level of criminal activity, but that does not excuse the actions of the acting Sheriff, City Controller, and Mayor in working to put this money into the hands of City finance officials instead of the rightful recipients.

The financial irregularities in the Sheriff’s Office have been well documented and uncorrected for years while various officials promised reforms without demanding accountability.  For Marie Virelli, Joseph O’Hara, and so many other victimized property owners, more justice delayed is truly justice denied.  Before their money gets lost in further bureaucratic obfuscation, we must make amends, account for the improprieties, and punish wrongdoing.