White Collar Crackerjack

Orange trash haulers case is soooo 1998

Photo by Tenaya HillsDeath might get Jeff Hambarian before the DA can.

It's been almost six years since the county district attorney's office charged the former Orange trash hauler with masterminding a scheme that bilked the city of Orange out of more than $4 million. Hambarian has pleaded not guilty to 65 counts of theft, fraud and money laundering and continues to wait it out behind the gates of his multimillion-dollar Anaheim Hills home, while careful planning and dumb luck make his one of the longest-delayed criminal trials in Orange County history.

The delay has also made it impossible for a number of people to testify—because they're dead.

An assortment of ailments has claimed at least half a dozen witnesses against Hambarian. Former Orange official Phil Pierce had a brain tumor. Conspirator Eduardo Ghibaudo died of a heart attack in Mexico. His secretary succumbed to cancer. Brother Don Hambarian fell to liver problems, and elderly patriarch Sam Hambarian passed away just last year. Still others, including the father of convicted Hambarian conspirator Steven Daetweiler, are in such poor health it's unlikely their testimony will be heard, potentially frustrating the prosecution.

"The case has been around for a long time, and whenever a case is around for a long time, lives go on and sometimes don't go on," said Layne Melzer, the Costa Mesa attorney representing Orange in the city's civil action against Hambarian.

Melzer will have to continue waiting. His civil case is queued up behind the criminal case, which continues to get pushed back—mostly because Hambarian shares his attorney, Mark Geragos, with northern California's accused wife-killer Scott Peterson.

Geragos is expected in Santa Ana on Sept. 10 to discuss a possible start date for Hambarian's trial with OC Superior Court judge Frank Fasel.

Fasel has been on the case since the beginning and has watched impatiently as attorney and client have made move after move to postpone, including a 1999 effort to get rid of the DA entirely, crying conflict-of-interest over investigators' use of an accountant on the city's payroll. That alone tied up the case for three years until the Supreme Court rejected Geragos' request.

The judge made little effort to mask his irritation with Geragos at a court appearance last February. He said he was concerned that the attorney—by this time also representing Michael Jackson—didn't have time to handle his less-famous client.

"This court is going to be way out of line on your priority list as far as in-custody cases, which is what my long-range concern is," Fasel told Geragos, according to a report in the Bay Area newspaper The Argus. The King of Pop fired Geragos three months later, claiming he wasn't getting "the full attention" of his defense lawyers.

Geragos assured Fasel that he planned to keep Hambarian's case "on a short leash" and estimated Peterson would wrap in September.

Whether that will happen is anybody's guess. "I think one thing that you can always bet on with the Peterson case is that something weird is going to happen," legal analyst Dean Johnson said. "We are only partway through the prosecution's case, and they still have a substantial amount of evidence to go. It's going to go on for quite a while."

Quite a while is what it has already been, according to OC prosecutor Ronald Cafferty, who now suspects he may reach retirement before Hambarian sees the inside of a courtroom. "I want to get this case done before I retire," Cafferty joked. "The judge doesn't want it delayed anymore, either." Cafferty is set to retire in 2006.

And where's Jeff Hambarian? "He's enjoying the good life," Cafferty said, "living in his house in Anaheim Hills."

That's about the only thing anyone can say about the reclusive Hambarian, now in his early 50s. City officials say he always kept a low profile and has all but dropped from their radar in the years since his arrest.

"I hear hardly anything about him," said Orange City Attorney David DeBerry.

And while he may be waiting for the sword to drop, there are few doubts among those who knew him that he lives a pretty fine life.

It was nearly 10 years ago that Orange officials suspected Hambarian was doing a lot more than taking out the garbage after an audit by Hambarian's own longtime accountant, Steven Nakada, revealed "irregularities" in the books of his companies, Orange Disposal Services and Orange Resource Recovery Systems. Nakada was unable to conduct a complete fraud audit, court documents allege, because of "a deterioration of his relationship with the Hambarians."

He ultimately resigned and was followed quickly by Orange police. They brought in their own accountant, Jeff Franzen, and started their own investigation, which uncovered what they said was a massive fraud scheme to report inflated company costs and underreport recycling revenue, resulting in higher city trash rates and increased profits for the companies.

City detectives soon found themselves overwhelmed by the complexity of Hambarian's dealings. They turned the investigation over to the DA's office, which says it discovered kickbacks to a pair of Inland Empire truck-body companies as well as an Anaheim tire dealer who went to jail after he admitted to conspiring with Hambarian and hiding more than $300,000 in illicit proceeds collected between 1993 and 1995. And there was Curly's Cafe in Signal Hill, where employee Mark Dix acknowledged to cashing as much as $800,000 worth of checks for Hambarian over an eight-year period.

Some activities went back as far as the early '80s and included Hambarian's friends from his days at Villa Park High School.

Investigators allege that Hambarian carried out his scheme without the knowledge of brothers Mike and Don or their parents, Alyce and company founder Sam Hambarian, who were all officers in the companies. They say the 40-year-old business had always been run like a family operation: positions were inherited, duties were delegated, and trust was tacit. That enabled Hambarian to continue without his family's knowledge—or their participation.

"All of the evidence of fraud pointed to Jeff having his hands in it," DeBerry said.

Cafferty concurred, adding, "There isn't a scintilla of evidence" against any other members of the Hambarian family in any criminal or civil proceedings.

Hambarian spent only a short time in jail after his arrest. A few weeks later, still in shock over the scandal, his parents cut the city of Orange a check for nearly $10 million in an initial settlement. In the months that followed, Hambarian would see the company his father built absorbed by the city's new trash hauler, Waste Management. According to an agreement with the city, Hambarian was not allowed to work for Waste Management in any capacity. In addition, Waste Management acquired all of the former Hambarian companies' facilities—except for the land. The family still collects rent from the company's Orange recycling facility.

"Jeff, meanwhile, hasn't lost a dime. He still has all of his ill-gotten gains," said DeBerry, adding he believes that, despite the initial settlement, Orange is still owed a significant amount of money and will see Hambarian in civil court—eventually. "We're willing to wait."

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