Civil trial against Recology begins in San Francisco
SAN FRANCISCO (KGO) -- Fraud charges and false claims made by a whistleblower against Recology of San Francisco are finally going to a jury trial. The former employee says the garbage company cheated the state, the city and ratepayers out of millions of dollars.
Whistleblower Brian McVeigh filed a lawsuit on behalf of the state and the city of San Francisco. Now, if a jury finds that the charges are true, Recology may have to pay tens of millions of dollars in damages.
On Wednesday, there were opening statements in the civil trial against Recology, the large waste management and recycling company. It's taken a long time for the lawsuit to get to trial. It was filed four years ago.
"Employees were inflating the weights and embezzling what I estimated was $1.3 million per year in aluminum cans and water bottles," McVeigh says.
That's just one of the charges McVeigh is making against his former employer, Recology. He says that workers regularly inflated how much recyclable materials weighed in kickback schemes with customers they knew, to get more money from the state redemption program.
"Mostly it was inflation of... say a small bag of aluminum cans could be turned into 200-300 pounds of aluminum," McVeigh says. "Some of it seemed to be people they were working with, people they knew who planned to come in."
McVeigh says when he exposed the theft, fraud and embezzlement which he uncovered as an operations supervisor, Recology ultimately fired him.
His attorney meticulously led the jury through all of the charges which covered almost a decade. Another serious allegation in the lawsuit deals with an incentive system the city of San Francisco set up. Recology is entitled to millions in bonuses at the end of a rate year, if they can reduce the amount of garbage that goes into landfills, while increasing its recycling of green waste.
John Scott is an attorney for McVeigh who says the company cheated by filing false claims. Scott told ABC7 News, "They misrepresented either the numbers of tons of garbage that was going into landfills or they were not properly reporting the amount of material that was being diverted. They should not have received millions of dollars in bonuses and under the way the rules established, that amount of money would have gone back to ratepayers and would have reduce rates."
McVeigh's lawyers told jurors most of their evidence will come from Recology's own books and records.
"What this case really shows is that figures don't lie, but liars can figure," Scott says.
Recology emailed a response to ABC7 News saying in part, "We want the public to know that the allegations by a disgruntled former employee are false. The bottom-line of this case is that Recology is the victim of any theft of recycling materials -- not the City, State, Ratepayers or the Public."
