City of Compton Files Lawsuit Seeking Repayment of More Than $22,000,000 Paid to Convicted Felon and His Company

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The City of Compton is engaged in a lawsuit with convicted-felon Michael Aloyan and his company Hub City Solid Waste Services. In this lawsuit, the City is seeking the repayment of more than $22,000,000 that was paid to Hub City under a contract signed by the former Compton administration.

We are seeking the repayment of over $20,000,000 made to Mr. Aloyan and his company. These millions of dollars were paid pursuant to a waste hauling franchise agreement signed by the City’s prior administration.

The City of Compton has filed a lawsuit against convicted-felon Michael Aloyan and his company Hub City Solid Waste Services.

According to Paul J. Loh of Willenken Wilson Loh & Stris LLP, counsel for the City, "We are seeking the repayment of over $20,000,000 made to Mr. Aloyan and his company. These millions of dollars were paid pursuant to a waste hauling franchise agreement signed by the City’s prior administration."

The following history of events is excerpted from official papers filed in the lawsuit (Los Angeles Superior Court Case No. BC323801). For a copy of these and any other public filings, please contact Mr. Loh at the address below.

CITY OF COMPTON ENTERS INTO HUB CITY CONTRACT.

In late 2000 and early 2001, the prior Compton City Council voted to award a 15-year, no-bid residential and commercial waste-hauling contract to Hub City. This franchise agreement was entered into on February 8, 2001. It was signed on Hub City’s behalf by Michael Aloyan.

Among those on the City Council who voted in favor of awarding the Franchise Agreement to Hub City were then-Mayor Omar Bradley, councilman Amen Rahh, and councilwoman Delores Zurita.

In early 2004, Bradley and Rahh were convicted on state criminal charges for misappropriation of City funds.

ALOYAN CONVICTED OF BRIBING CARSON OFFICIAL TO GET HUB CITY CONTRACT.

In February 2003, Aloyan was convicted of bribing an official of the neighboring city of Carson, California, in an effort to secure Carson’s municipal waste hauling contract for Hub City.

Several years earlier, former City Mayor Walter Tucker was tried on federal criminal corruption charges. In this trial, Aloyan testified and admitted under oath that he passed bribes to Tucker and/or his agents on behalf of a company called Murcole to secure Tucker’s vote on a rate hike. Tucker was ultimately convicted and sentenced to prison.

Around the same time, former City councilwoman Patricia Moore was tried on federal criminal corruption charges. In this case, Aloyan testified and admitted under oath that he passed bribes to Moore and/or her agents to secure her vote concerning a casino franchise. Moore was ultimately convicted and sentenced to prison.

NEW COMPTON ADMINISTRATION TAKES OFFICE AND INVESTIGATES ALOYAN.

In 2003, the current Compton administration began to take office. Omar Bradley, Amen Rahh and Delores Zurita were ultimately voted out of office and replaced by others on the City Council. The new administration commenced an audit and investigation into the formation and performance of the Hub City agreement.

The audit and ongoing investigation revealed evidence that City officials who awarded, or otherwise participated in making, the agreement with Hub City held a direct and/or indirect financial interest in the franchise agreement--a violation of California Government Code Section 1090, et seq.

This includes evidence that Hub City and/or Aloyan provided monetary payments, gifts, employment and other benefits to or on behalf of such officials and/or their relatives.

NEW COMPTON ADMINISTRATION TERMINATED HUB CITY CONTRACT AND HUB CITY FILES LAWSUIT.

On September 7, 2004, the current Compton City Council voted to terminate the Hub City franchise agreement. Up to that point, the City had paid Aloyan and/or Hub City more than $22,000,000 pursuant to the agreement.

In response to this termination, Hub City filed a lawsuit against the City of Compton. Incredibly, Hub City claimed that the City had improperly terminated the agreement.

THE CITY SEEKS REPAYMENT OF $22 MILLION PREVIOUSLY PAID TO HUB CITY.

In response to Hub City’s baseless lawsuit, the City on January 5, 2005 filed a cross-complaint seeking the recovery of millions of dollars from Aloyan and Hub City.

Because the franchise agreement was secured under circumstances indicative of conflict of interest and corruption, California Government Code Section 1090, et al., provides that the City is entitled to recover all monies paid under the agreement.

This amounts to over $22,000,000.

For additional information, contact:

Paul J. Loh, Esq.

Willenken Wilson Loh & Stris LLP

725 South Figueroa Street; Suite 1690

Los Angeles, CA 90017

(213) 955-9240 (phone)

(213) 955-9250 (fax)

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Paul J. Loh, Esq.
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