Baltimore City will replace its property tax collection system with an automated version after a former employee admitted to taking bribes in exchange for erasing people’s debts, Finance Director Michael Mocksten said.

In August, former city tax collector Joseph Gillespie admitted in a separate federal case that between 2016 and 2023 he had accepted over $250,000 in payoffs for erasing outstanding property tax bills, citations and water obligations from people who sent him money via Zelle and other mobile payment apps. The scheme cost the city over $1.2 million, according to federal prosecutors.

Gillespie resigned April 30 from his job in the finance department’s Bureau of Revenue Collection, Mocksten said Tuesday in a letter to Inspector General Isabel Mercedes Cumming. Gillespie had been suspended after being indicted on separate criminal charges in September 2023. He is expected to be sentenced Dec. 9 in U.S. District Court for conspiracy to commit wire fraud. Cumming said her office first referred Gillespie’s case to the U.S. Department of Justice in September 2021, according to a report her office issued Tuesday.

Cumming said her office had found instances in which Gillespie received payments via Zelle from property owners for whom he had processed redemptions after the city put their homes up for auction at tax sales. In addition, Gillespie forwarded to his personal email address copies of tax sale documents, deeds, screenshots, check scans and bills over 50 times between February 2020 and July 2023, which violated city rules about sharing sensitive information. The property tax collection system also lacked stringent security controls, like audit logs, which left it vulnerable to manipulation, Cumming said.

The city’s property tax collection system makes it “challenging” to uncover fraud and theft like Gillespie’s because it does not allow customers to see consolidated bills or total amounts due, Mocksten said in his response letter to Cumming. Employees have to manually calculate redemption amounts, making it easy for them to claim “human error” to explain away any discrepancies.

The city sells the rights at tax sales to collect on past-due property taxes; the buyers are often debt collectors who levy liens and interest on the properties. Advocates have criticized the practices as “predatory” and disproportionately impacting poorer, Black and older city homeowners.

The finance department plans to implement a new system by October 2025 that will automatically calculate redemption bills and issue statements, Mocksten said. In the meantime, the city is beefing up its internal security measures by requiring supervisors to override any tax sale redemptions that are 30 days or older, and lowering the limit from $5,000 to $3,000 for which employees can issue redemption refunds without managerial approval.

The chief or deputy chief of the bureau of revenue collection will also review all monthly tax sale reviews, and forward “areas of concern” to his office, Mocksten said.