Baltimore City Landfill Supervisor Admits to Accepting Bribes from Trash Haulers

Baltimore City Landfill Supervisor Admits to Accepting Bribes from Trash Haulers

Baltimore City Landfill Supervisor Admits to Accepting Bribes from Trash Haulers

U.S. Attorney’s Office
District of Maryland
17 August 2015

FOR IMMEDIATE RELEASE

City Lost Over $6 Million in Longstanding Scheme in Which Commercial Trash Haulers

Baltimore, Maryland – William Charles Nemec, Sr., age 55, of Baltimore, pleaded guilty today to conspiracy and solicitation of bribes in connection with a scheme in which Department of Public Works (DPW) employees sought and accepted cash payments from commercial haulers in return for allowing the commercial haulers to deposit trash at the Quarantine Road Landfill without paying the required disposal fees. Nemec also admitted to participating in a scheme in which employees stole scrap metal from the Landfill for personal gain.

The plea agreement was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Acting Special Agent in Charge Scott Hinckley of the Federal Bureau of Investigation; 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 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 farther 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 deposited 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.

Bribery Scheme

According to his plea agreement, Nemec started working in 1984 for the DPW as a scale house cashier at the Cold Spring Lane Landfill. Back then, weight tickets were handwritten, and Nemec and other cashiers would regularly accept bribes from small and large haulers in lieu of charging disposal fees and then split the bribe money among all the cashiers. That same year, Nemec was transferred to the Quarantine Road Landfill (Landfill) where he engaged in the same type of bribery scheme. Except for short periods of time over the years since 1984, and despite the comings and goings of new scale house employees and supervisors at the Landfill, Nemec and other scale house operators continued to execute the bribery scheme until Nemec’s arrest on May 12, 2015, and even after he was promoted to a supervisory position at the Landfill in 2006.

Beginning around 2002, Nemec executed the bribery scheme in tandem with two scale house operators, including Tamara Washington. Nemec and the scale house operators accepted $100 bribe payments from large haulers for each truckload of trash dumped at the Landfill, which saved the haulers many hundreds of dollars per trip to the Landfill. Nemec and others concealed the bribery scheme by not entering a truck’s registration number into the computerized scale system, which meant the transaction was not recorded. Consequently, the transaction would not appear on the scale house’s daily logs and the commercial hauler would not be billed for using the Landfill on that particular occasion.

To maintain the pretense that the trucks had been weighed and the disposal fee paid, Nemec and others would hand the truck drivers fake or blank receipts when they crossed the outbound scale. In return, the commercial haulers either paid the $100 bribe through the outbound window at the scale house or met with Nemec or another scale house operator at an off-site location to pay a week’s worth of bribes or more. The commercial haulers always paid the $100 bribes in cash.

By paying the $100 bribes in lieu of the disposal fees, these haulers saved their businesses thousands of dollars each month, which, in turn, cost the City of Baltimore more than $6 million in revenue. For example, from July 1, 2014 through May 1, 2015 alone, Nemec, while working as a supervisor at the Landfill, accepted on his own behalf, and on behalf of other DPW employees involved in the scheme, more than $15,000 in bribe payments from a commercial hauler in return for not charging the hauler or his company the required waste disposal fees, which totaled approximately $55,000 during that period of time.

Nemec has agreed to pay restitution of $6 million.

Illegal Junking Scheme

In addition to the revenue generated by the collection of disposal fees, 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.

From 2005 until May 2015, Nemec and other Landfill employees falsely represented to the DPW that they were performing the jobs for which they were hired when in fact, they used their paid positions during work hours to unlawfully collect and sell scrap metal for personal gain. Employees under Nemec’s supervision paid him cash to conceal the illegal junking that occurred daily at the Landfill.

Nemec knew that laborers at the Landfill used their personal cell phones to let each other know when and where recyclable scrap metals were being dumped at the Landfill. After collecting and creating piles of the scrap metal at various locations, the laborers would transport the scrap metal using their personal pick-up trucks to a private salvage company, frequently making multiple trips during a single, eight-hour work shift. The stolen scrap metal that they sold to the private salvage company for cash resulted in a loss of revenue to the City totaling hundreds of thousands of dollars.

For the years 2011 and 2012, two laborers paid Nemec approximately $20 every day to allow them and others to collect and transport the stolen scrap metal. In addition to not reporting the daily trips to the salvage company to sell the stolen metal, which some days could take a total of 3 - 4 hours, Nemec would authorize and submit false time and attendance records to conceal the scheme, so that the laborers were able to be paid for work they did not perform while stealing the metal.

Nemec faces a maximum sentence of five years in prison for the conspiracy and 10 years in prison for bribery. U.S. District Judge Marvin J. Garbis has scheduled sentencing for November 17, 2015 at 9:30 a.m.

Former DPW employee Tamara Oliver Washington, age 55; and commercial haulers Mustafa Sharif, age 63, of Baltimore, and Adam Williams, Jr., age 52, of Randallstown, pleaded guilty in July 2015 to their participation in the bribery scheme. Washington is scheduled to be sentenced on October 20, 2015, Williams on October 21 and Sharif on November 6, 2015. Washington has agreed to pay restitution of $6 million. Sharif has agreed to forfeit and pay restitution of $500,000 and Williams has agreed to forfeit and pay restitution of $900,000.

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 Attorney Martin J. Clarke, who is prosecuting the case.