An imbroglio involving an alleged kickback scheme perpetrated by employees of a San Francisco-based garbage collection company has shone a spotlight on the perils faced by individuals who go public with information concerning potential fraud committed against the government, and the importance of robust protections at all levels of government for whistleblowers.
Brian McVeigh was initially hired by the garbage collector, Recology, in 2000, and received positive performance evaluations. He was later transferred to a sorting facility to oversee a California Redemption Value (CRV) Buyback Center operated by the company. Recology has a monopoly with the City of San Francisco, and receives millions of dollars in diversion incentive bonuses from the State of California to participate in the buyback program. As a manager at the CRV Buyback Center facility, McVeigh’s responsibilities included preventing fraud and theft of CRV recyclable materials. In that capacity, he became aware of a fraudulent scheme in which Recology employees were inflating CRV weights, manipulating the figures in order to qualify for the bonuses from the state. McVeigh was summarily terminated in 2008 after bringing the fraud to the attention of Recology management and the local authorities.
McVeigh has filed a civil claim against his former employer under California’s False Claims Act (“FCA”), alleging that Recology management was likely involved in the scheme and that the termination was retaliation for his reporting of the wrongful conduct to the authorities. Both the fraudulent scheme on the part of the garbage collection company, a contractor which generates $220 million in annual revenues from local San Francisco ratepayers as an unregulated monopoly, and the retaliation are actionable under California’s False Claims Act.