Trash Hauler Accused of 13-Year Fraud Scheme

Taking advantage of lax municipal oversight, a recycling company executive bilked the city of Orange out of $4.2 million in an elaborate series of fraud and embezzlement schemes over a 13-year period, prosecutors said Thursday.

Jeffery Hambarian, whose family has been the city’s trash hauler for 40 years, was arrested and charged Thursday with 65 felony counts, including grand theft, commercial bribery, perjury and money laundering.

Prosecutors allege that Hambarian falsified more than $2.5 million in expenses, which were later reimbursed by the city, and embezzled revenues generated from recycling materials that should have gone to municipal coffers.

When investigators searched Hambarian’s Anaheim Hills home in July, they recovered more than $1 million in cashier’s checks, as well as $250,000 in jewelry from his wife’s purse, according to court papers released Thursday.

Hambarian, 44, was being held at Orange County Central Jail on $5 million bail. His attorney could not be reached for comment.

The charges cap a 16-month corruption investigation targeting Hambarian.

Orange County Dist. Atty. Mike Capizzi said Thursday that no city officials or other members of the Hambarian family will be charged.

Capizzi took the city to task for not properly reviewing the activities of its trash contractor.

“Obviously there was not adequate oversight and review or it wouldn’t have gone on for 13 years,” he said. “The citizens of Orange were the ultimate victims because with every dollar stolen it affected their trash rates.”

The investigation, launched in August 1997, followed a paper trail of evidence linking Hambarian to more than 50 bank accounts, several front companies and outside businesses he allegedly used to launder money or submit phony invoices, prosecutors said in a 52-page affidavit released Thursday. Many of those business owners cooperated with investigators in exchange for immunity.

The scandal has rocked city politics, resulting in the ouster of the police chief and an unsuccessful attempt to recall three council members. On Thursday, most city officials continued to deny that they mishandled the trash contract.

But others expressed shock at the latest allegations, especially that the embezzlement had been going on for so long.

“I’m just disgusted,” said Councilman Dan Slater. “I can’t believe he’s been ripping us off for 13 years.”

According the court papers, Hambarian used an assortment of means to cheat the city:

* From 1985 to 1997, Hambarian allegedly billed the city more than $2.5 million for nonexistent or personal expenses.

* From 1990 to 1997, he allegedly diverted about $900,000 in revenues from the sale of recycled materials to accounts controlled by his company.

* Hambarian allegedly skimmed $628,000 from the city by adding a “brokerage fee” to the amount Orange paid to dump its trash at the BKK Landfill in Covina.

Prosecutors have seized Hambarian’s assets as part of an effort to recover the funds. Among the assets seized were his 8,500-square-foot estate in Anaheim Hills, which is for sale at $3 million, and two Mercedes-Benz automobiles.