An investigation by the Baltimore Inspector General’s Office found that an auctioneer owed the city nearly half a million dollars from auctions of impounded or abandoned vehicles in the summer of 2018.
The city sued the company, which Inspector General Isabel Mercedes Cumming’s report did not name, and recovered about $95,000, leaving more than $480,000 outstanding.
But city officials could not revoke the company’s license, the law department said in its response, “because the Auction Advisory Board lacked a quorum, and its sole member had a decadeslong relationship as employer, mentor and business partners.”
The investigation, which accused the company of improperly mixing city money with its own accounts, is the latest accusation of problematic practices among the city’s auction vendors.
It revealed the company continued operating as a vendor for the city after its contract expired, and it owed the city more than $575,000 for four vehicle auctions between June and August of 2018.
The report, released Wednesday, said the company was the city’s second auction vendor to fail to pay back large amounts of revenue to Baltimore in the previous 20 years.
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A former contractor in 1999 had failed to pay even more, $744,636, according to an audit at the time.
The law department’s civil suit in that case recuperated about $708,518, the OIG report said.
The latest report came more than a year after the Inspector General investigated the chairman of the Auction Advisory Board over allegedly improper payments to help unlicensed auctioneers host auctions in the city.
This week’s findings “revealed a lack of City controls” in auctions and prompted the Inspector General to recommend a new measure to prevent future issues.
While Baltimore hired a new auction vendor that conducts auctions online, the new contract “appears to continue to allow the contractor to take custody and control of the City’s revenue after an auction and before remittance,” the Inspector General said.
“Given that two previous auctioneers had control of the City revenue following an auction and both failed to remit a substantial amount of that revenue to the City, the OIG requested for the City to consider having buyers at each auction remit payment directly to the City,” the report said.
“Then, the new contractor could invoice the City for its commission and fees.”