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Catch of the Week: San Francisco Garbage Companies Cop to Bribing Corrupt City Regulator in $36 Million Deal with Feds

Posted  September 10, 2021

Three San Francisco trash and recycling companies, all Recology, Inc. subsidiaries, have agreed to pay $36 million in a corruption scheme involving substantial bribes to former San Francisco Public Works Director Mohammad Nuru. The SF Recology Group, which includes Recology San Francisco, Sunset Scavenger Company, and Golden Gate Disposal & Recycling Company agreed to a deferred prosecution deal on charges they conspired to commit honest services fraud in connection with the bribes.

As part of the deal announced yesterday, the SF Recology Group admitted it conspired to bribe Nuru to secure favorable treatment on the trash collection companies’ contracts with the city. The conspiracy spanned more than half a decade, from 2014 through Nuru’s January 2020 arrest, a period when Nuru presided over the Department and had significant influence over contract rates and operations. The stream of benefits included hundreds of thousands of dollars in cash payments to a non-profit Nuru controlled, $60,000 in supposed charitable donations actually meant to fund Department holiday parties, and a job and internships for Nuru’s son.

Prosecutors have also gone after two former SF Recology Group employees central to the conspiracy. The Group admitted Paul Giusti, then in the Group’s management, made the bribes with knowledge and approval of his boss John Porter, the Group’s Vice President for a portion of the time. Both have been charged with bribery and money laundering. Giusti recently pleaded guilty to one count of conspiracy to bribe a local official and commit honest services fraud and agreed to cooperate with prosecutors. Porter’s prosecution is ongoing.

“San Francisco citizens were victimized for years in a bribery scheme involving public contractors and a powerful, corrupt San Francisco public official,” Acting United States Attorney Stephanie M. Hinds said in a statement announcing the deal. “The significant amount of illegal kickbacks SF Recology Group paid to Mohammed Nuru demonstrates a corrupt and reprehensible cheating of the American public,” added IRS Criminal Investigation Acting Special Agent in Charge Michael Daniels.  “It is unacceptable and illegal to help yourself to public funds, but if you do, know this: IRS Criminal Investigation will be there waiting to seek justice on behalf of the citizens of San Francisco.”

Stop Fraud and Corruption

There are a variety of avenues to expose fraudulent schemes involving government contracts. If you have information about government contracting fraud, you might have a whistleblower case, and you may be eligible for a reward for reporting the scheme. Whistleblowers may also qualify for an award for reporting bribery and corruption or money laundering, depending on the specifics of the scam. Contact our whistleblower lawyer team to learn more.

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Tagged in: Bribery and Bid-Rigging, Catch of the Week, Government Procurement Fraud, Money Laundering,