Bailout blooper: bank seized for failure to pay taxes

Before you go, we thought you'd like these...
Before you go close icon
A lot of people are having a tough time paying their taxes these days, but that's still not likely to generate much sympathy for the former Wachovia bank in Shoemakersville, Pennsylvania. After the branch -- the rural town's only bank -- closed last month, an enterprising local reporter started digging through public records and discovered that the property was sold at auction the previous September after the bank blew off its tax bills for two years.

Wachovia, a big player in the mortgage market before the credit crisis hit, had been on the rocks and was bought by San Francisco banking giant Wells Fargo last September. Wells Fargo took $25 billion in TARP bailout money from the government, yet the subprime scofflaw managed to avoid paying a comparatively measly $9,600 in back taxes.

The taxes on which Wachovia was delinquent were its 2006 town and county taxes, and its 2008 school taxes, according to the Reading Eagle. Curiously, Wachovia paid both sets of taxes in full in 2007, along with school taxes in '06 and town/county taxes in '08. It certainly wasn't an innocent case of one misplaced notice getting lost in the bank's mountain of paperwork.

What the newspaper categorizes as "numerous" calls and certified letters were placed or sent to the bank, warning it of its liability and threatening to seize the property. Wachovia eventually coughed up a portion of the overdue payment back in February, but it was literally a case of too little, too late.

Although the bank had been assessed at $240,000, it was sold to a local business for just $16,900 -- a little more than 14 cents on the dollar.

The real losers here are the citizens of Shoemakersville. They now have to drive five miles to the next-closest Wachovia branch rather than being able to walk to the bank. For the elderly or those without cars, this translates into a lot of expensive cab rides because Wachovia couldn't be bothered to pay its taxes.
Read Full Story

From Our Partners