Landfill employee receives prison sentence for scrap metal theft

Scrap worth more than gold in Baltimore

September 3, 2015




Baltimore City Landfill Employee Admits to Stealing Scrap Metal from the Landfill for Personal Gain



BALTIMORE, MD—Michael Theodore Bennett, age 46, of Baltimore, an employee at the Baltimore City Landfill, pleaded guilty today to conspiracy to steal from a program receiving federal funds, wire fraud and failure to file a tax return in connection with a scheme in which employees stole scrap metal from the Baltimore City Landfill for personal gain.

The plea agreement 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; 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 must obtained Landfill permits, and must deposit their trash in an open area located farther within the Landfill. Commercial haulers of trash must also pay a waste disposal fee of $67.50 per ton of trash deposited at the Landfill.
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 2007 until May 2015, Bennett and other Landfill employees, including supervisor William Nemec, 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. Bennett and other employees used part of the proceeds of the sale of the scrap metal to pay other DPW employees for their help locating, setting aside, collecting and loading the scrap metal onto their trucks. Bennett and others paid cash to supervisors to look the other way and not report them of collecting and transporting the stolen scrap metal, including Nemec. Bennett and others under Nemec’s supervision also relied on Nemec to authorize and submit false time and attendance records to conceal the junking scheme.

Bennett and other employees 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 and to coordinate their arrival at the private salvage yard. After collecting and creating piles of the scrap metal at various locations, Bennett and others transported 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.
Bennett prepared and submitted false time and attendance records, which claimed he had been working, when he was instead illegally collecting and selling the scrap metal, resulting in wages being paid to Bennett for work he did not perform.

Bennett also admitted that he failed to report approximately $479,468 of income for tax years 2011, through 2013, the majority of which was obtained from the illegal junking scheme.
The loss to the City of Baltimore as a result of the junking scheme was $400,000, and the tax loss to the government for Bennett’s failure to file tax returns was $126,273. As part of his plea agreement, Bennett agreed to the entry of an order to pay restitution of $526,273, the total amount of the loss.

Bennett faces a maximum sentence of five years in prison for the conspiracy, 20 years in prison for wire fraud, and one year in prison for failure to file a tax return. U.S. District Judge Marvin J. Garbis has scheduled sentencing for December 21, 2015 at 10:00 a.m.

Former DPW employee Tamara Oliver Washington, age 55 and William Charles Nemec, Sr., age 55, both of Baltimore; and commercial haulers Mustafa Sharif, age 63, of Baltimore, and Adam Williams, Jr., age 52, of Randallstown, pleaded guilty to their participation in a related bribery scheme. Nemec also pleaded guilty to the “junking” scheme. Washington is scheduled to be sentenced on October 20, 2015, Williams on October 21 and Sharif on November 6, 2015. Washington and Nemec have each agreed to the entry of an order to pay $6 million in restitution. 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.