Baltimore Finance Director Henry Raymond said people who made payments last week to avoid having their property included in Baltimore’s annual tax debt auction will be “held harmless,” even though a ransomware attack meant city staff couldn’t properly process payments.
The tax sale, which takes the form of online auction, proceeded as scheduled Monday.
Raymond and Mayor Bernard C. “Jack” Young briefed members of the City Council on the fallout from the hack at a regular working lunch.
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“Our top priority is getting our system back up to full operation,” Young said. “We had techs on site working through the weekend.”
Officials have given few details about the severity of the attack or how the hackers gained access to city systems, saying the matter is the subject of a federal investigation.
Raymond stressed that people with overdue tax bills and other debts to the city were told they faced an April 30 deadline to pay. The ransomware attack, which has severely disrupted city computer networks, was detected May 7.
Nonetheless, Raymond said, “for any homeowners who paid after April 30 but before the actual tax sale, we will hold those individuals harmless once we’re back up in operation.”
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Staff in the tax sale office said last week that they could take payments only from people who had correspondence from the city showing how much they owed, because the city’s system for checking debt amounts was offline. The city was also unable to take payments by credit or debit card.
Raymond did not say what would happen to people who tried to make a payment but were unable to do so.
Councilman Isaac “Yitzy” Schleifer asked Raymond why officials couldn’t delay the sale.
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“What would be the harm in postponing?” he asked.
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Raymond said it was a cash-flow issue for the city. The sale, in which investors pay the debt amounts to the city for the authority to collect the debts with interest, typically brings in about $20 million on a single day.
“The fact that we gave everybody sufficient notice, there really was no reason to delay the tax sale,” Raymond said.
The tax sale itself is controversial. If the investors who buy the debts can’t collect, they can go to court to foreclose on the property, potentially acquiring it for a fraction of its value.
Baltimore officials have said the city fell victim to a kind of ransomware known as RobbinHood. Hackers use ransomware to lock files on victims’ computers before demanding payment to provide keys to the lock.
The Baltimore attackers have asked for the equivalent of about $76,000 in the digital currency bitcoin. Officials have refused to pay.
“That’s just like us rewarding bank robbers for robbing banks,” Young told reporters Monday.