Trash Exec’s Trial Finally Begins

Trial started Wednesday for a former trash-hauling executive accused of siphoning $4.3 million from Orange city coffers, almost eight years after the scandal rocked a town known for its quaint downtown dotted with antiques shops and Craftsman bungalows.

Jeffrey Hambarian, 50, used a series of schemes to pilfer the money, Senior Deputy Dist. Atty. Ronald Cafferty told jurors in Central Court in Santa Ana. Hambarian had headed the company that provided the city’s recycling services, part of the trash-collection enterprise his parents had started with the city in 1954.

“He used all kinds of artifices to steal this money,” Cafferty said during a recess. “He violated his family’s trust and the trust of the city.”

Hambarian faces more than 10 years in prison and millions of dollars in fines if convicted on all 57 counts of embezzlement and money laundering.

The trial has been held up for years as Hambarian’s lawyer, Mark Geragos, tended to high-profile clients -- most recently Scott Peterson, who was sentenced to death in March for killing his pregnant wife. At least three potential witnesses and Hambarian’s father and brother have died since the allegations against Hambarian surfaced.

Other members of the Hambarian family have not been implicated in the alleged fraud.

Geragos will make his opening statement today. He declined to comment until then.

During Cafferty’s two-hour opening statement, Hambarian took notes as his lawyers scrutinized the PowerPoint presentation unfolding on a large projection screen in front of them. The slides included flow charts said to detail the various schemes and photographs of Hambarian, his associates and several orange-striped dump trucks.

The prosecutor told the jury that Hambarian’s plots included conspiring with various vendors of the recycling company to fake and inflate invoices. After the recycling company paid the bills -- in turn reimbursed by Orange -- the vendors would kick back the extra money to Hambarian, prosecutors say.

Between 1984 and 1997, the prosecutor said, Hambarian cashed 825 fraudulent checks totaling $3.58 million.

That money included more than $1 million, paid for recyclables, that Hambarian diverted to himself, Cafferty said.

The recycling director made an additional $628,900 after negotiating with a Los Angeles County landfill to pay him a “brokerage fee” of $7.50 per ton of trash Hambarian dumped there, Cafferty said. City officials were led to believe that the per-ton cost for that landfill was $27, the prosecutor said, although that amount included Hambarian’s kick-back charge.

The checks for his fee were made out to a “dummy” corporation Hambarian had set up, then sent directly to his $3-million home, Cafferty said.

After rumblings of the fraud surfaced in Orange in 1997, Hambarian emptied the fake corporation’s account by writing checks to himself and his wife, including one payment for $350,000, the prosecutor said. The next year, when his home was searched, police found more than $1 million in cashier’s checks in his wife’s purse and $60,000 in cash throughout the house.

The city of Orange reeled for months from the aftershocks of the allegations. The police chief was fired after trying to conduct background checks of City Council members. Joanne Coontz, who was mayor at the time, defended herself and other city leaders against criticism that the alleged fraud had gone unnoticed for so long.

Among witnesses expected for the trial is the auditor for Orange Disposal Service. The theft accusations emerged after the auditor’s resignation.