United States Attorney's Office District of Connecticut
Press Release

NEW YORK TRASH HAULER PLEADS GUILTY TO FEDERAL RACKETEERING CHARGE

Kevin J. O’Connor, United States Attorney for the District of Connecticut, announced that DAVID MAGEL, age 33 (DOB 12/17/72), of 7 Tanna Hill Court, Baldwin Place, New York, pleaded guilty today before Senior United States District Judge Ellen Bree Burns in New Haven to one count of conspiring to violate the federal Racketeer Influenced and Corrupt Organizations Act (RICO). MAGEL is the General Manager at CRP Carting, a carting company located in Elmsford, New York.

According to documents filed with the Court and statements made in court, MAGEL today admitted that, along with others, he conspired to perpetuate a system, commonly called the “property rights system.” Carters engaged in the property rights system would not service or compete for other carters’customers. The property rights system essentially destroys free enterprise, allowing the participating carters to artificially inflate their prices and leaving waste removal customers with no other options. In this scheme, which was principally directed at commercial and municipal customers, participating carters agreed to quote inflated prices to customers controlled by other carters. MAGEL admitted that he participated in the affairs of the enterprise by agreeing to respect the unwritten rules of the property rights system.

According to statements made by the Government at today’s court proceeding, the property rights system in Connecticut was enforced by extortion and threats, and the participants in the conspiracy sought to operate the property rights system in eastern New York. To accomplish this goal, they spoke with MAGEL and other New York carters and arranged a meeting in December 2004. MAGEL met with several other members of the enterprise, two of whom were associated with a Connecticut-based carting company, at a diner in Mt. Kisco, New York. At this meeting, a member of the enterprise proposed that MAGEL and others agree to inflate prices for New York carting services and displayed a piece of paper that listed a suggested price.

Following the meeting, MAGEL engaged in a series of telephone calls with other members of the enterprise concerning their efforts to effectuate a property rights system. On December 21, 2004, law enforcement intercepted one conversation between MAGEL and two members affiliated with a Connecticut-based carting company during which MAGEL agreed to provide inflated quotes to customers of the other participants in the conspiracy. Stating “I’m shootin’ for the, for the gusto here,” MAGEL agreed to inflate his quotes for New York customers serviced by other members of the conspiracy to $20 per yard. Subsequently, in early January 2005, the FBI intercepted a call in which MAGEL informed a member of the conspiracy that, in light of the agreement, he “had let two condos go.”

On June 8, 2006, a federal grand jury in New Haven returned an Indictment charging MAGEL and several other individuals and businesses on various charges stemming from a long-term investigation in the waste-hauling industry in Connecticut and eastern New York. Today, MAGEL pleaded guilty to Count Two of the Indictment.

Judge Burns has scheduled sentencing for October 25, 2006, at which time MAGEL faces a maximum term of imprisonment of 20 years and a fine of up to $250,000.

This matter is being investigated by the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigation, the United States Department of Labor, Office of Labor Racketeering and Fraud Investigations and the Connecticut State Police. The United States Marshals Service, the Drug Enforcement Agency’s Office of Professional Responsibility, the Connecticut Department of Correction and the New Haven, Milford and Ansonia Police Departments have provided critical assistance in the Investigation. Assistant United States Attorneys Michael J. Gustafson, Anthony E. Kaplan, Raymond F. Miller and Henry K. Kopel are prosecuting this case.

CONTACT:

U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
thomas.carson@usdoj.gov