Baltimore City Employees and Commercial Trash Haulers Indicted in Separate Bribery and Theft Schemes
Longstanding Schemes Allegedly Resulted in Losses to the City of Nearly $7 Million
Baltimore, Maryland – A federal grand jury has returned two indictments charging five Baltimore City Department of Public Works (DPW) employees and six commercial trash haulers with conspiracy and other charges, including bribery and theft, related to two schemes to defraud the City of Baltimore through the operation of the DPW waste management services. Two employees are charged in both indictments. The indictments were returned on May 28, 2015 and unsealed today.
“The first indictment alleges that trash haulers paid bribes to landfill employees in exchange for not charging dumping fees, which cheated the city of almost $6 million. The second indictment charges that landfill employees stole scrap metal that the city would have sold for almost $1 million,” said U.S. Attorney Rod J. Rosenstein. “The Baltimore City Inspector General brought these allegations to the attention of federal authorities and assisted in the investigation.”
The first indictment alleges that over a 14-year period three DPW employees solicited and accepted cash payments from at least six private commercial haulers in return for not charging them or their companies the required disposal fees for trash dumped at the Baltimore City Quarantine Road Landfill. The second indictment alleges that over a 9-year period four DPW employees falsely represented on their daily time sheets that they were performing the jobs for which they were hired when, in fact, those employees used their paid positions to engage in a private enterprise for personal gain by selling scrap metal dumped at Baltimore City trash collection sites.
The indictments were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Assistant Special Agent in Charge Kathy Montemorra of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Robert H. Pearre, Jr., Inspector General, City of Baltimore Office of Inspector General; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
The Department of Public Works’ Bureau of Solid Waste
The DPW’s Bureau of Solid Waste is responsible for managing Baltimore City’s waste management services, including overseeing citizen drop-off centers, such as the Northwest Transfer Station (NWTS) and the Quarantine Road Landfill (Landfill). Baltimore City’s waste management system generates revenue for the City by collecting and selling recyclable scrap metal dumped at the City’s trash collection facilities. The City contracts with private salvage companies to purchase and remove scrap metal from its trash collection facilities. DPW employees at the Landfill and NWTS are required to place the recyclable scrap metal in separate bins provided by the salvage companies. The salvage companies regularly pick up the scrap metal and, based on predetermined prices per ton, the salvage companies pay the City for the value of the scrap metal.
Baltimore City residents can deposit small amounts of trash and/or recyclables in dumpsters located near the main entrance of the Landfill, free of charge. Individuals or companies commercially hauling trash that have registered their vehicles with the City and obtained Landfill permits, as well as Baltimore City residents with larger loads, must deposit their trash in an open area located further within the Landfill. Commercial haulers of trash that meet certain vehicle weight limitations must, in addition to purchasing a Landfill permit, pay a waste disposal fee of $67.50 per ton of trash, also referred to as a “tipping fee.” The disposal fee applies to the net weight of the trash deposited at the Landfill.
U.S. v. Washington, Et Al., Criminal No. MJG-15-0303
The 44-count indictment alleges that from approximately 2001 until May 2015, DPW employees sought and accepted cash payments from commercial haulers in return for allowing the commercial haulers to deposit trash at the Landfill without paying the required disposal fees.
The indictment charges:
Tamara Oliver Washington, age 54, of Baltimore;
Williams Charles Nemec, Sr., age 55, of Baltimore;
Charles Dennis Bolden, Sr., age 68 of Baltimore;
Adam Williams, Jr., age 52, of Randallstown;
Mustafa Sharif, age 63, of Baltimore;
Larry Lowry, age 61, of Orchard Beach, Maryland;
Quentin Turgot Glenn, age 49, of Hanover, Maryland;
Jessie Lee Wilson, Jr., age 40, of Baltimore;
John Howard Brady, age 73, of Glen Burnie.
Washington was a DPW employee assigned to the scale house at the Landfill. DPW employees assigned as scale house operators weigh each truck as it enters the Landfill, which is recorded on a computerized point-of-sale system. To activate the system and record a particular transaction, DPW employees must enter the tag number of the truck and a corresponding billing code. The scale house operators reweigh each truck as it leaves the Landfill. The net weight of the deposited trash and the required disposal fee is then calculated and printed on a receipt that is handed to the driver. Nemec was initially employed by the DPW as a scale house operator at the Landfill and Northwest Transfer Station, and then later promoted to solid waste supervisor. Bolden was employed as a laborer at the Landfill.
Williams, Sharif, Lowry, Glenn, and Brady all had commercial trash hauling businesses in Maryland. Wilson was employed by Glenn.
Specifically, the indictment alleges that the DPW employees allowed the commercial haulers to enter the Landfill with truckloads of trash – sometimes multiple times a day - without activating the computerized truck scales and point-of-sale system, ensuring that there would be no record of the commercial haulers’ use of the Landfill. In exchange, the commercial haulers paid cash bribes to the DPW Employees, ranging from approximately $50 to $100 per Landfill visit. According to the indictment, the bribes were delivered on a daily or weekly basis to the DPW employees in folded paper through the scale house window or dropped off in envelopes at designated times and places outside the Landfill. The DPW employees allegedly divided the cash payments from the commercial haulers among themselves. The payments were approximately 20% to 30% of what the commercial haulers would have otherwise had to pay to use the Landfill. The indictment alleges that when the commercial haulers’ trucks drove onto the outbound scale after dumping their loads of trash, DPW employees handed the truck drivers fraudulent receipts, usually in the form of white scrap paper or a blank receipt, to maintain the pretense that the trucks had been weighed and appropriately charged for using the Landfill.
The indictment alleges that the ongoing relationship between the commercial haulers and DPW employees resulted in a loss of revenue to the DPW and the City of Baltimore of approximately $6,000,000.
The defendants each face a maximum sentence of five years in prison for the conspiracy; and all but Bolden also face a maximum of 10 years in prison for each count of bribery. Washington, Nemec and Bolden face a maximum of 20 years in prison for each count of extortion.
U.S. v. Hazelton, Et Al., Criminal No. MJG-15-0302
The 18-count indictment alleges that from approximately 2005 through March 2015, Jarrod Terrell Hazelton, age 32, of Parkville, Maryland; Michael Theodore Bennett, age 46, of Baltimore; Bolden and Nemec, conspired to unlawfully sell scrap metal from the Landfill and NWTS, while falsely representing to DPW that they were performing the jobs for which they were hired.
The defendants are all employed by DPW at either the Landfill or the NWTS. According to the indictment, the defendants and others used their personal cell phones during work shifts to let each other know when and where recyclable scrap metals were being dumped at the Landfill and NWTS. Hazelton and Bennett used their personal pick-up trucks during work hours to collect the scrap metal and transport it to a private salvage company, frequently making multiple trips during an eight-hour work shift. Hazelton and Bennett sold the scrap metal for as much as $300 per truckload, resulting in a loss of revenue to the City totaling approximately $893,000.
Hazelton and Bennett allegedly used part of the proceeds of the sale of the scrap metal to pay a fee to Bolden and other DPW employees for their help locating, setting aside, collecting and loading the scrap metal onto their trucks. According to the indictment, Hazelton and Bolden also paid Nemec in return for allowing them to collect and transport scrap metal from the Landfill. The indictment alleges that the defendants prepared and submitted false time and attendance records, which claimed they had been working, when they were instead illegally collecting and selling the scrap metal, called “junking.” For Hazelton and Bennett, this allegedly resulted in approximately $60,000 in wages being paid to them for work they did not perform.
The indictment charges Hazelton with filing false tax returns for tax years 2011 through 2014, by failing to report a total of $537,554 in income. Bennett is charged with failing to file tax returns for tax years 2011, 2012, and 2013, even though he had reportable income of at least $180,834, $152,494, and $146,154, respectively.
Finally, the indictment seeks the forfeiture of $953,000, alleged to be the value of the property stolen or obtained by fraud.
The defendants each face a maximum sentence of five years in prison for the conspiracy. Hazleton, Bennett and Nemec each face a maximum of 20 years in prison for wire fraud; and Hazleton, Bennett and Bolden also face a maximum of 10 years in prison for each count of theft from a government program. Hazleton faces a maximum of three years in prison for each of four counts of subscribing to a false tax return and Bennett faces a maximum of one year in prison for each of three counts of failure to file a tax return.
An initial appearance is scheduled at 2:30 p.m. today for Brady, Williams, Sharif, and at 3:00 p.m. for Glenn, Lowry, and Wilson in U.S. District Court in Baltimore. Washington, Nemec, Bolden, Hazelton, and Bennett had an initial appearance on the charges in their previous criminal complaints, and are released under the supervision of U.S. Pretrial Services. They are expected to be arraigned on the charges in the indictments in the next few weeks.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised the FBI, IRS-CI, Baltimore Office of Inspector General, and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Martin J. Clarke and Gregory R. Bockin, who are prosecuting the case.