Property sold for a song at auctions

The Finance Ministry’s fraud squad, known as SDOE, yesterday revealed that a racket had been exploiting public auctions of property confiscated to repay debts, often winning with bids of just 3 euros above the starting price. There have long been claims of such organized rackets preying on people whose homes have been confiscated to pay their debts. But SDOE’s investigation, which came at a time when the opposition New Democracy party has vowed to disband it and replace it with another organization, provided detailed insight into what went on at 1,132 such auctions. SDOE found that 57 people were involved in bidding repeatedly on behalf of third parties without having declared that this was their profession and thereby not paying taxes. They are to be fined in the next few days. But the probe also provided details of how the bidders bought property for remarkably low prices, often after having bribed other bidders to pull out. The starting price in public auctions is set at half the objective value of a property – the value that the tax authorities place on it, usually far below market value. SDOE found that of the 1,132 cases it investigated, only 196 properties (or 17.3 percent) were bought for more than their objective value. Another 604 (or 43.6 percent) were sold for some 50 percent more than their starting price, and 441 (39.1 percent) were sold for just 3 euros more than the starting price. For example, in one case, a two-floor house covering 428 square meters with a swimming pool in Dionysos, northern Athens, had an objective value of 220 million drachmas (645,000 euros) and its starting price was 110 million drachmas (322,500 euros). It was sold for 110,001,000 drachmas – in other words, the starting price of 322,500 plus 3 euros. Separately, National Economy and Finance Minister Nikos Christodoulakis said yesterday that SDOE would need to be upgraded and provided with more specialized personnel and would have to focus on crimes such as fraud, smuggling, tax evasion, money laundering, narcotics smuggling and on overseeing trading in the financial system and over the Internet.