January 23, 2002

ORANGE COUNTY TIRE DEALER SENTENCED TO PRISON
IN TAX EVASION CASE RELATED TO RECYCLING SCANDAL

 An Orange County businessman has been sentenced to 10 months in custody for his conviction on federal tax charges related to a trash-hauling scandal that may have cost the City of Orange millions of dollars.
 Steven Daetweiler, 39, the owner and operator of S&D Tires in Anaheim, was sentenced Monday afternoon to five months in prison and five months in a community corrections center (commonly called a “halfway house”). Daetweiler was sentenced in Santa Ana by United States District Judge David O. Carter.
 Daetweiler pleaded guilty in November 2001 to one count of conspiracy to evade federal income taxes. By pleading guilty, Daetweiler acknowledged that he conspired with Jeffrey Hambarian, the former head of Orange Refuse Service, and others to fabricate the sale of tires to Orange Refuse.
 In his plea agreement with the government, Daetweiler admitted that he failed to report $321,555 in income during the years 1993, 1994 and 1995.
At Monday’s sentencing hearing, Judge Carter ordered Daetweiler to pay restitution of $103,722 to the Internal Revenue Service.
 In the conspiracy, Daetweiler dealt with Jeffrey Hambarian to supply tires to Orange Refuse, a trash and recycling firm. The City of Orange had a contract with Orange Refuse to collect garbage, and the contract called for reimbursement of operating expenses incurred by Orange Refuse.
 In an alleged fraud scheme – which is currently the subject of criminal and civil litigation in the state courts – S&D Tires prepared fraudulent invoices for tires that Orange Refuse submitted to Orange. The city made payment to Orange Refuse, which then wrote checks to S&D Tires. Daetweiler and others at the company split the proceeds with Hambarian and others.
 In attempts to hide his activity, Daetweiler failed to maintain accurate business records and he falsified records to conceal the additional income obtained from the fraud scheme.
 According to the plea agreement in Daetweiler’s case, Daetweiler allowed others at S&D Tire to write checks for a portion of the illicit proceeds made payable to various third party companies. These checks were delivered to Hambarian and he ultimately cashed the checks.
 Hambarian was charged by the Orange County District Attorney’s Office in 1998 with masterminding an alleged fraud and embezzlement scheme that bilked Orange out of more than $4 million. He has pleaded not guilty to charges contained in a 65-count indictment.
 In the federal conspiracy case, Daetweiler failed to report the income from the fraudulent scheme with Orange Refuse, as well as income from legitimate tire sales
 The case against Daetweiler is the result of an investigation by IRS Criminal Investigation, Los Angeles Field Office.

 Release No. 02-015

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