“New Lawsuit to Crack Down on Tax Evasion by Owners of Vacant & Blighted Houses”

From the Office of the Attorney General for the District of Columbia:

“AG Racine today announced the first enforcement action brought by the Office of the Attorney General (OAG) against owners of long-term vacant or blighted homes who made false claims to avoid paying the higher property taxes that the District imposes on empty or blighted properties.

The Office of the Attorney General (OAG) filed a lawsuit against the owners of a crumbling and vacant Ward 6 home, alleging that they made false claims to the District to avoid paying the vacant property tax since at least 2015. This enforcement action represents a new front in OAG’s efforts to combat the District’s affordable housing crisis and to ensure property owners uphold their legal responsibilities.

“Too many District residents are struggling to find safe and affordable places to live, while more than 3,000 homes sit vacant across the city,” said AG Racine. “The Council has imposed higher taxes on vacant and blighted houses to motivate owners to keep properties in use and in good repair. But instead of fixing up, renting out, or selling these homes, some owners repeatedly lie to avoid paying the taxes they owe. That’s not acceptable, and we’re putting owners on notice: if you own a vacant home, you must register it with the District and pay all required taxes. If you try to cheat the system, the Office of the Attorney General will hold you accountable.”

“This is an important step in what should be the final chapter of three decades of a vacant building in our city,” said Council Chairman Phil Mendelson. “I’m hopeful that this suit will send a message that the District is serious about fraud and that these LLCs must make an effort to put their properties back into use rather than continue to try to game the system.”

“For years, this vacant property has been a blight in our neighborhood and the owner has avoided paying their fair share of taxes,” said Advisory Neighborhood Commissioner Laura Gentile (6A05). “I’m grateful AG Racine is taking action to hold them accountable. Hopefully we’ll finally see this property put to good use.”

Despite a booming real estate market, more than 3,000 residential properties in the District are sitting vacant or blighted. When properties sit vacant, they reduce the supply of available housing and can attract drug activity and crime, affecting the safety and quality of life of nearby residents. To motivate owners to fix their properties and return them to productive use, the D.C. Council imposed significantly higher property tax rates on vacant and blighted homes than on those that are occupied. However, rather than paying the required taxes on vacant properties–or selling or renting out these homes–some owners attempt to evade their tax obligations by repeatedly submitting false information to the District claiming their properties are occupied or falsely claiming a tax exemption to which they are not entitled.

Under the District’s False Claims Act, it is illegal to knowingly make false statements to conceal, avoid, or decrease an obligation to pay the District–and those who break the law can face extremely steep costs. The District can file a lawsuit seeking to recover three times any amount that is owed (treble damages) and can also obtain civil penalties for each violation of the law. OAG has independent authority to investigate and take legal action under the False Claims Act.

Lawsuit Against Owners of 1000 C St NE
OAG filed suit against the owners of 1000 C St NE, a once-stately home in Ward 6, for making false claims to the District to avoid paying the vacant property tax since at least 2015. In the suit, OAG alleges that the home has sat vacant for years: boarded up, overgrown, with crumbling masonry, a visibly decaying roof, and vacancy notices pasted on top of weathered vacancy notices from prior years. Yet year after year, its owner, George Papageorge, who owns the property through an LLC, avoids registering the property as vacant and paying the higher property tax rate as required. Instead, they repeatedly and falsely report to the District that the property is occupied. With the suit, OAG is seeking to recover unpaid property taxes, damages, and penalties from the defendants that could total more than $750,000.

A copy of the legal complaint is available here.”