Waste management companies busted for colluding to rig bids, fix prices

Waste management companies busted for colluding to rig bids, fix prices

Two New York-based waste management companies have been convicted of conspiring to rig bids, allocate customers and fix prices.

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April 11, 2018
Edited by Adam Redling
Hauling Legislation and regulations Municipal Recycling Municipal Solid Waste

New York Attorney General Eric Schneiderman announced criminal convictions and a civil resolution against two Broome County, New York, trash collection firms, their owners and associated employees for conspiring to rig bids, allocate customers and fix prices for trash and recycling services. In addition to conspiring to rig bids for private customers, which forced Broome County residents and businesses to pay artificially inflated prices for essential services, Bert Adams Disposal, Chenango Bridge, New York, and Taylor Garbage Service, Vestal, New York, also colluded on bidding for certain municipal contracts, inflicting economic harm on New York taxpayers.

“Bert Adams Disposal and Taylor Garbage Service illegally and secretly divided up their territory so they could rig the market and rip-off their customers by charging inflated prices,” Schneiderman says. “I am pleased we were able to bring these perpetrators to justice. My office is committed to protecting New York consumers from anticompetitive and illegal business tactics wherever they occur.”

Taylor Garbage Service and Bert Adams Disposal dominate waste hauling and recycling services in the Broome County area. The attorney general’s investigation revealed that, from as early as July 2014 until May 2016, the two companies entered into collusive agreements to rig bids for waste hauling, recycling and related services, and forced customers to pay excessive prices for basic services. The companies conspired through in-person meetings, phone calls and text messages.

According to paperwork filed in court, over this two-year period, the companies exchanged hundreds of text messages and calls in which the companies set their cartel in motion:

 The companies also discussed coordinating price increases to consumers rather than setting prices independently as the law requires:

Additional texts showed that the companies agreed on when to refrain from giving a quote to a prospective customer, thus thwarting the customer’s attempt to switch providers in response to exorbitant prices.

As part of their illegal cartel, each company regularly submitted inflated bids and price quotes (also known as cover bidding) to ensure that the other firm would keep its current customers without raising suspicion by being the only bidder.

On April 9, Elbert Adams, majority owner of Bert Adams Disposal, entered a guilty plea in Broome County Court to the “E” felony charge of Combination in Restraint of Trade and Competition, also known as a violation of New York’s Donnelly Act. 

Adams admitted in court to entering into collusive arrangements with individuals from Taylor Garbage Service to rig bids for waste hauling, recycling and related services. He admitted that these arrangements included, among other methods, the companies agreeing to not pursue the business of each other’s current customers and deciding in advance which company would win a bid. Adams further admitted that both companies agreed to submit a deliberately inflated bid or price quote—or not to submit a bid at all—to a customer to ensure the incumbent company would keep the contract. Adams further admitted that they deprived customers of their right to free competition and, in turn, forced customers to pay excessive prices for waste hauling and related services. As part of his felony plea, Adams will pay $75,000 in criminal penalties.

Bert Adams Disposal, Inc. also pleaded guilty in Broome County Court to an “E” felony Donnelly Act violation. As part of Bert Adams Disposal’s guilty plea, it will be required to pay $850,000 in criminal penalties.

For their role in the conspiracy, company employees Bert Adams and Christopher Kline each pleaded guilty in Binghamton City Court to the “A” misdemeanor count of Attempted Combination in Restraint of Trade and Competition, and will each pay $37,500 in criminal penalties.

Taylor Garbage Service, Inc. will pay $500,000 in civil penalties, and Robert Taylor, the company’s president and co-owner, will also pay a $50,000 penalty to New York state. The company also agreed to appoint a compliance officer to oversee the implementation of an antitrust compliance program.

In its settlement with the attorney general’s office, Taylor Garbage Service admitted to violating New York state’s Donnelly Act by, among other methods, routinely agreeing in advance with Bert Adams Disposal which company would win a particular bid, regularly submitting deliberately inflated bids and price quotes to prospective customers to ensure that the incumbent would keep its customer, and regularly exchanging information about rates they were charging customers and would be submitting in bids.

The terms of the settlements with Taylor Garbage Service and Robert Taylor reflect the company’s early confession of its responsibility for the anticompetitive conduct and its prompt cooperation, including the disclosure of critical information in furtherance of the attorney general’s investigation.

As reported by Press Connects, Taylor Garbage issued a statement through a public relations consultant April 10 regarding the matter:

"These events occurred several years ago," Taylor's statement read. "No one from Taylor Garbage, nor the company itself, was charged or convicted of any crimes related to this incident. When we became aware of the violation, Taylor Garbage immediately and fully cooperated with the attorney general’s office in a complete and honest manner.”

Taylor went on to ask for forgiveness and committed the company to restoring the faith of its customers.

"We have worked extremely hard to build a reputation of honesty, integrity, and customer service over the past 40 years and look forward to restoring the trust you have placed in us to manage your waste and recycling needs,” the release stated. “While the infraction was a regrettable mistake, we hope you will accept our apology and our commitment that it will not happen again."