Baltimore City Landfill Employee Sentenced to 2 Years in Federal Prison for Stealing Scrap Metal and Filing False Tax Returns
Defendant Led Scheme to Illegally Collect and Sell Scrap Metal at the Landfill During Work Hours
Baltimore, Maryland – U.S. District Judge Marvin J. Garbis sentenced Jarrod Terrell Hazelton, age 33, of Parkville, Maryland, a former employee at the Quarantine Road Landfill (Landfill), today to two years in prison followed by three years of supervised release for conspiracy and wire fraud in connection with a scheme to unlawfully sell scrap metal from the Landfill and the Northwest Transfer Station, while falsely representing to the Baltimore Department of Public Works (DPW) that he was performing his job; and for filing a false tax return. Judge Garbis also ordered Hazelton to pay restitution of $400,000.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Robert H. Pearre, Jr., Inspector General, City of Baltimore Office of Inspector General; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
Baltimore City’s waste management system generates revenue by collecting and selling recyclable scrap metal dumped at the City’s trash collection facilities, including household appliances, steel cables, copper wires, car parts, computer parts, door and window frames. The City awards contracts to private salvage companies to purchase and remove such scrap metal from its trash collection facilities.
DPW employees at the Landfill and other trash collection sites are required to segregate the recyclable scrap metal from general refuse and place it in separate bins provided by the salvage companies. The companies regularly pick up the scrap metal, weigh it and send a tonnage report to the City. Based on predetermined prices per ton, the City sends an invoice to the companies requesting payment for the value of the scrap metal the companies removed during a given period of time. Salvaging by employees, also referred to as “junking,” was strictly prohibited and employees were put on notice that any salvaging of metal constituted theft of City property.
According to his plea agreement, from 2005 until May 2015, Hazelton, who was employed by DPW at the Landfill, and other DPW employees, including Michael Bennett and supervisor William Nemec, unlawfully collected and sold scrap metal for personal gain during work hours, while representing to DPW that they were doing the jobs for which they were being paid. Hazelton was a leader in the scheme and coordinated the daily collection of scrap metal at the Landfill.
Hazelton and other employees used part of the sale proceeds of the stolen scrap metal to pay other DPW employees for their help in locating, setting aside, collecting and loading the scrap metal onto their trucks. Hazelton, Bennett and other employees at the Landfill used their personal cell phones to communicate when and where recyclable scrap metals were being dumped at the Landfill, and to coordinate their arrival at the private salvage yard. Hazelton, Bennett and others uses their personal pickup trucks to transport the scrap metal to a private salvage company, frequently making multiple trips during a single, eight-hour work shift.
The sale of the stolen scrap metal resulted in a loss of revenue to the City of at least $400,000.
In order to conceal the junking scheme, Hazelton and Bennett paid cash to Nemec and other supervisors to not report them for collecting and transporting the stolen scrap metal, and to authorize and submit false time and attendance records. Hazelton prepared and submitted false time and attendance records which falsely claimed he had been working, when in fact, he was instead illegally collecting and selling the scrap metal, resulting in wages being paid to Hazelton for work he did not perform.
In addition, for tax years 2011 through 2015, Hazelton failed to report approximately $476,703 of income received from the illegal junking scheme. For example, for tax year 2013, Hazelton reported $14,009 in total income to the IRS on his individual tax return, when Hazelton knew that he received $126, 293 of additional income that year from the illegal junking scheme.
Former DPW employees Tamara Oliver Washington, age 55, William Charles Nemec, Sr., age 56; and Michael Theodore Bennett, age 47, all of Baltimore, previously pleaded guilty to their roles in the schemes. Nemec was sentenced to 78 months in prison, and Bennett to 46 months in prison. Judge Garbis also ordered Bennett to pay restitution of $400,000. Washington is scheduled to be sentenced on August 12, 2016, at 11:30 a.m.
Five other commercial trash haulers have also pleaded guilty and a sixth commercial trash hauler has been convicted by a federal jury, in connection with their participation in a scheme. Four of these trash haulers have been sentenced: Quentin Turgot Glenn, age 50, of Hanover, Maryland, who owned and operated Glenn Services, LLC, a trash hauling business, was sentenced to three years in prison; Jessie Lee Wilson, Jr., age 41, of Baltimore, who was employed by Glenn Services as a truck driver, to three years of probation, with the first year to be spent in community confinement; Adam Williams, Jr., age 53, of Randallstown, to one year in prison; and Larry Lowry, age 61, of Orchard Beach, Maryland, to 30 months in prison. Judge Garbis also ordered that Glenn pay restitution of $306,000; Williams pay restitution of $900,000; and Lowry pay restitution of $180,000.
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 Leo J. Wise, who prosecuted the case.