Documente Academic
Documente Profesional
Documente Cultură
February 6, 2018
February 6, 2018
PRELIMINARY REPORT
To The Citizens Group
Of San Luis Obispo County
INTRODUCTION
This report is being submitted in response to your request to conduct an
investigation of Charles K. Tenborg and his related companies; Eco Solutions,
Fond Farewells Inc., CEC Medical Waste Services Inc., CEC Electronic Waste
recycling, The Cleaner Earth Company Inc. and Stericycle, Inc. As further
described in this report, my team have issued numerous Public Record Act (PRAs)
requests to local government agencies, and have also conducted several interviews
with cooperating citizens located in the SLO area. The results of our investigation
are summarized below.
Unless otherwise stated, the information in this report is based upon information
and belief, this report is based upon my personal knowledge and if called upon to
testify, I could and would competently testify thereto.
QUALIFICATIONS AND BACKGROUND
Exhibit “A” attached hereto is a true and correct copy of my Curriculum Vitae and
accurately sets forth my qualifications and background.
1. I am the owner of Knudson Investigations (Knudson & Associates) and have
been since November 2000. I am a consultant within the area of forensic
accounting and fraud investigations. My clients include, among others, city and
county government organizations, non-profit organizations, insurance companies,
retail stores, electronic manufacturers, real estate companies, golf courses,
construction companies, banks, corporations, and the Federal Public Defenders’
Office in Los Angeles and Orange County. I consult, and sometimes conduct
investigations for my clients on issues regarding; conflict of interest, management
malfeasance, alleged laundering of monies, and purported embezzlement and
laundering of the proceeds by government employees, corporate officers and
contractors. I have consulted for the Federal Public Defenders Office in Los
Angeles and Orange County, California on tax fraud cases and mail fraud, wire
fraud, embezzlement schemes (sometimes known as Ponzi Schemes). I have also
consulted with CJA Panel attorneys, in their defense of clients accused of complex
financial crimes such as tax fraud, Medicare Fraud, bankruptcy fraud, mail fraud,
money laundering, identity theft and wire fraud and have testified in Federal and
State court proceedings regarding my findings and opinions.
2. As a consultant, I have also been engaged as an expert witness in connection
with federal and state court proceedings in approximately 100 cases. I have
testified as an expert witness at trial in eleven cases. My expert witness
engagements have been in the following areas: Medicare fraud, tax fraud, federal
and state money laundering schemes, federal money structuring schemes, wire
fraud schemes, mail fraud schemes, bankruptcy fraud schemes, SEC violations,
bank fraud schemes, loan fraud schemes, mortgage banking fraud, narcotics
trafficking, Ponzi schemes, Pyramid schemes, Telemarketing schemes, Identity
Theft schemes, Political Corruption schemes, and embezzlement schemes.
3. Prior to becoming a consultant, from June 1997 to October 2000, I was
employed as a director in the Financial Advisory Service practices at the Big 5
accounting firms of Price WaterhouseCoopers and KPMG. As a director, I
managed and conducted engagements into internal embezzlement schemes by
corporate officers employed at high tech companies, construction companies,
insurance companies, hotel management companies, hospitals, HMO’s, not-for-
profit organizations, city government and casinos. I coordinated investigative and
forensic accounting efforts with external counsel, general counsel, human
resources and the internal accounting staff. I traced flow of embezzled funds
through corporate books and records, bank accounts and internal backup
documents. As a director, I also consulted with national banking institutions
regarding purported money laundering schemes that had occurred at their bank(s)
and suspected malfeasance by a bank officer.
4. From May 1973 to June 1997, I was employed as a special agent with the
IRS, Criminal Investigation Division (“CID”). As a special agent, I conducted
numerous investigations into money structuring and money laundering cases
relative to narcotic traffickers and organized crime subjects. I worked with
banking institutions and local regulators in providing guidance into the
implementation of money structuring (USC, Title 31) and money laundering laws
(USC, Title 18, section 1956) and related banking regulations. I also conducted
joint investigations with the Federal Bureau of Investigations (FBI) related to
public corruption.
5. In connection with my employment with the organizations described in the
preceding two paragraphs, I received extensive training on auditing, accounting
and financial investigative techniques. In those positions, I participated in, and
conducted, hundreds of investigations of alleged criminal offenses, including tax
crimes, money laundering, structuring, wire fraud, mail fraud, health care fraud,
bankruptcy fraud, Ponzi schemes, pyramid schemes, bank fraud, embezzlement,
public corruption and other fraud related offenses.
6. As a result of my experience and training as shown above in paragraphs 2
through 4, I have become familiar with conducting the financial analysis of a
business operation; and the financial analysis of a person’s wealth and net worth.
As a result of my experience, employment and training, I have become aware of
how a business operates, generates revenue and pays its operating expenses. As a
result of my employment, I have reviewed financial records and bank documents
showing the financial status of individuals or companies. I have also analyzed tax
returns and tax return information in order to reconstruct the financial viability of
individuals and companies.
7. I have a Bachelor of Science degree in business administration. I am a
licensed private investigator in the State of California and a Certified Fraud
Examiner (CFE).
THE INVESTIGATION
Custodian of Record
Department of Toxic Substance Control (DTSC)
1001 “I” Street
P.O. Box 806
Sacramento. Ca 95812-0806
Custodian of Records
San Luis Obispo County Integrated Waste Management Authority
(IWMA)
870 Osos Street
San Luis Obispo, CA 93401
Kelly Wetmore
Director of Legislative and Information Services
City of Arroyo Grande
300 East Branch Street
Arroyo Grande, CA
Cold Canyon Landfill, Inc.
Waste Connections
Custodian of Record
2268 Carpenter Canyon Road
San Luis Obispo, CA
Reichert Pictures
24. Interview of Paul Schmidt, Arroyo Grande Citizen who provided the
following information:
• He had been in business with Tenborg in 2009 and had invented a paint can
crusher that Tenborg used to crush paint cans.
• He lives on the street where Tenborg parked his ECO Solutions commercial
vehicles, and saw e-waste and hazardous waste barrels in trailers on Plomo
street, but he didn’t know if the barrels were full or empty.
• He recalled that Tenborg had a contract with PG&E to clean waste out of
their electrical vaults and had a special nozzle attachment that was designed
to suck up the waste from the vaults.
“In May of 2013 I learned that EcoSolutions Inc., which runs the HHW
facility for the County at our Cold Canyon Landfill, had dumped some soil over
the NE portion of the HHW facility. This area is an unlined, non- landfill
portion of the Cold Canyon property.
I investigated the area in question and confirmed that some type of soils
appeared to have been dumped in the area described above. I then obtained
analytical data of the material from Charles Tenborg, the owner of
EcoSolutions, which he admitted to have dumped by the HHW area. Charles said
the soil in question was “build up” from wind and animals in transformer boxes
owned by PG&E that EcoSolutions had serviced.
After reviewing the analytical data, our Environmental Specialist for the
Western Region informed me that the sampled material did not meet
“unrestricted” use and needed to be placed into a lined portion of the
landfill. The material was not hazardous waste, but could not be dumped in the
area that it had been. I provided Charles a special waste application which he
completed and provided to our Environmental Specialist, who then issued special
waste permit….Charles then cleaned up all soils that were dumped by the
HHW and disposed of the soil on September 18, 2013 into Cold Canyon
Landfill under special waste permit ColdCanyon-13-003.”
28. The email from Lodge talked about a video that had been posted on Youtube
that “claimed to show Tenborg dumping soils at the Cold Canyon recycling area
that may be toxic.” However, there was no indication in the attached email string
that any further action had been taken?
29. I have reviewed the video that is on the YouTube website and is narrated by
a purported EcoSolutions employee at the HHW work site at the Cold Canyon
Landfill. In the video I noticed images of barrels that were double-stacked in the
HHW area and bore a striking resemblance to the pictures taken by Mr. Reichert of
a barrel marked “Hazardous Waste” (page 12 of this report) contained in a Tenborg
vehicle parked on a street in Arroyo Grande in 2009.
30. The evidence provided by the Water Board indicates that the 2013 incident
was not reported to the Water Board by Waste Connections until November 2015,
over two years later and only after an inquiry from Ryan Lodge. Further, from the
emails between the Water Board and Waste Connections, there is no discussion as
to whether the Water Board or Waste Connections independently sampled the soil
at the HHW site in order to confirm that the site was free and clear of any of the
chemicals listed on the PG&E chemical analysis.
31. Moreover, it appears, from the information that we have gathered that
Tenborg had been collecting Vault Waste from PG&E beginning at least in 2009,
and there is no indication where he was properly disposing of this waste. I have
reviewed sworn statements of Mr. Tenborg where he admitted to disposing of
“clean” soils from PG&E in 2013, and that PG&E were not clients prior to 2013.
These sworn statements from Mr. Tenborg seem to conflict with the evidence cited
in this report where Cold Canyon described the soils as “restricted” and could not
be dumped at the HHW site where they had been dumped. Tenborg’s own billing
statements to the IWMA and a statement from a prior business partner indicated
that PG&E was a client dating back to 2009.
32. In or about October 6, 2017, we attempted to interview employees at the
Cold Canyon Landfill and were referred to Waste Connections counsel Mr. John
Perkey. On October 9, 2017, I spoke with Mr. Perkey who advised me that he did
not want us talking to the employees of Cold Canyon Landfill.
33. On October 13, 2017, we sent a PRA request to the Cold Canyon Landfill
(Waste Connections) asking for information related to Charles K. Tenborg or his
companies. I was subsequently contacted by Mr. John Perkey, counsel for Waste
Connections on October 27, 2017 who advised me that Waste Connections was not
a public company and therefore they would not be responding to my request.
34. On October 18, 2017, we sent a PRA request to PG&E for information
related to Charles K. Tenborg and was subsequently contacted by the PG&E legal
department who advised me that they were not a public company and would
therefore not be responding to my request regarding Charles Tenborg or his
companies.
It does not appear that the $300 charge for the PGE Vault Cleaning Lompoc was
charged to the IWMA. The Reichert photographs taken of Tenborg’s trucks and
trailers parked on the residential streets of Arroyo Grande in or about March of
2009 shows propane tanks and what appears to be electronic equipment all
together in containers or trailers (page 12, pictures).
36. Based upon my research of Borg Building Consultants, 429 2nd Street, Des
Moines, IA it appears that this business is associated with Maurice Tenborg, the
brother of Charles Tenborg.
CONCLUSIONS
37. Based upon our initial investigation and the documents obtained from
CalRecycle, Water Board, and the DTSC it is clear that Charles K. Tenborg was
cited numerous times for the violation of California’s Hazardous Waste Laws,
which were related to his business operation located at the Cold Canyon Landfill.
Further, the evidence provided by the Water Board documented the dumping of
“restricted” PG&E soils at the HHW facility located at the Cold Canyon Landfill in
May of 2013. The evidence obtained during the investigation showed that
beginning in 2009 and ending in 2013, Tenborg and his companies were collecting
vault waste from PG&E vaults but we found no evidence documenting where this
vault waste was discarded except for the one incident in May of 2013. The
evidence shows that Mr. Tenborg acknowledged the DTSC notices of violations
that were sent to him by certified mail.
38. Although this is a preliminary report, we have concerns that the
environmental consequences of the unauthorized dumping of “restricted” or
potentially hazardous materials at the HHW site at the Cold Canyon Landfill by
Mr. Tenborg have not been thoroughly investigated.
RECOMMENDATIONS
39. I would recommend that this report be shared with local law enforcement
authorities to determine whether Tenborg should be prosecuted for repeatedly
making false statements on seventeen (17) consecutive payment claims to
CalRecycle during the period March 2014 to July 2015, which were made under
the penalty of perjury.
40. Further, I would recommend that law enforcement authorities investigate the
unauthorized dumping of PG&E vault waste at the Cold Canyon Landfill by the
Tenborg companies to determine whether “hazardous” waste was being collected at
the PG&E vaults, transported by the Tenborg companies to the HHW site at the
Cold Canyon Landfill, and stored at the HHW site without the proper permitting by
the Cold Canyon Landfill or approval of the appropriate government agencies. .,
Further, it is our recommendation that a comprehensive sampling by a certified
laboratory be conducted of the HHW located at the Cold Canyon Landfill in and
around the area where the “unauthorized” dumping was documented.
41. I would further recommend that the witness names identified in this report
be redacted unless waivers are received from them personally.
Respectfully submitted,
TABLE OF CONTENTS
Page
INTRODUCTION ….………………………………………………………… 1
QUALIFICATIONS AND BACKGROUND ………………………………… 1
THE INVESTIGATION ……………………………………………………… 4
CALRECYCLE ………………………………………………………………. 6
DEPARTMENT OF TOXIC SUBSTANCES CONTROL (DTSC) ………….. 8
INTERVIEW OF ANDY REICHERT ………………………………………… 10
INTERVIEW OF PAUL SCHMIDT ……………………………………….…. 12
CITY OF ARROYO GRANDE
……………………………………………….. 13
CENTRAL COAST REGIONAL WATER QUALTIY CONTROL
BOARD .. 14
SAN LUIS OBISPO COUNTY AUDITOR …………………………………… 15
CONCLUSIONS ………………………………..……………………………… 18
RECOMMENDATIONS …………………………………………………….….19
LIST OF EXHIBITS …………………………………………………………… 21