In sworn depositions taken as part of a civil lawsuit, a former and a current employee of Euphrates allege that the cheese manufacturer has defrauded the Gloversville-Johnstown Joint Wastewater Treatment Facility out of large amounts of revenue since 2006.
The Daily Gazette has obtained copies of depositions given by former Euphrates director of operations Joseph Andrews and David Blakeslee, currently an electrician for Euphrates. Both were deposed May 20 in the village of Malta by attorneys representing Pennsylvania-based Environmental Management Group International. EMG has filed a civil lawsuit in the U.S. Eastern District Court of Pennsylvania against Euphrates and its sister corporation, Agro Farma, both controlled by Hamdi Ulakaya.
EMG’s lawsuit alleges breach of contract for the terms of service of an anaerobic digester built by EMG and leased to Euphrates for the purpose of treating waste generated during the cheese-making process.
Fulton County District Attorney Louise Sira has confirmed that a criminal probe of Euphrates is under way after allegations arose that the company has somehow masked the amount of waste it has been sending to the wastewater treatment plant.
In his testimony, Blakeslee said after he started working for the company in 2005, he became aware of a policy to cut the electric power to the permanent monitoring station installed by the waste treatment facility inside in a shed on company property. The purpose of the monitoring station was to gauge the amount of pollutants contained within Euphrates’ waste stream so that the company’s bill for sewage treatment could be calculated.
Euphrates controls the flow of electricity to the station, according to wastewater treatment plant manager George Bevington. And the station does not operate constantly; it takes random samples.
Blakeslee said wastewater treatment plant officials placed a padlock on the monitoring station, which made it more difficult to tamper with the monitoring process until he built an amp meter, a device that he said was able to determine when the monitoring station was turned on and taking samples of Euphrates’ waste. He said the amp meter was his idea but it was approved by his superiors at the company. He said it became the policy of Euphrates to cut power to the monitoring station when it was taking samples and to dump heavy waste saturated with whey — a milk component discarded during the cheese-making process — down the sewer drain while it was off.
“Whenever we knew the monitor was on, we shut the, shut the power off to the monitor. They never knew this was happening,” Blakeslee said in his deposition.
Authorities have questioned Euphrates’ sewer bills in the past. In 2006, the city of Johnstown settled a dispute with Euphrates for $156,000, which included penalties and interest for unpaid sewer bills dating back to 2002, when the Turkish cheese maker first began operations in the city’s industrial park.
Andrews, who himself is suing Euphrates, claiming that it owes him money, testified that he worked for Euphrates from November 2006 until he quit in April 2008. He said Hamdi Ulakaya showed him how the alleged amp meter scam worked. He said the monitoring station was turned off “virtually every time that whey was going down the drain. That was part of the training.”
Bevington could not be reached for comment Thursday, but in prior interviews he explained that the wastewater treatment plant operators have no way of knowing how much whey waste has been sent down the sewer drain except for the monitoring station.
Bevington said Euphrates is the plant’s second largest customer, paying more than $100,000 annually for sewage treatment.
In his deposition, Andrews testified that while he was plant director, Euphrates’ sewage bills should have been more than $100,000 a month.
“So you see the vested interest in wanting to do something, because you are taking a bill that you are saying is high, at $30,000, and if you weren’t [tampering with the monitoring station], the bill would be at a magnitude of five times higher than that, so you see why you do those extraordinary circumstances,” he said. “The sewer bill would be well over a million dollars more every year if you didn’t do that. So, that’s why you do something like that. It doesn’t justify it. I’m just saying why.”
An official at Euphrates said the company was aware of Andrews’ allegations but refused to comment on the issue.
Blakeslee said Andrews ordered the alleged monitor station scam stopped while he was plant manager. He testified that he removed the amp meter during Andrews’ tenure and it has not been replaced.
“He didn’t want us doing that anymore. It was wrong,” he said.
Neither man’s deposition gives a time frame for the shutoff. Blakeslee wasn’t sure when the practice ended; Andrews said the practice might have continued at night, when he wasn’t there, even after he ordered the practice discontinued.
Both Andrews and Blakeslee declined to be interviewed for this story.
The Daily Gazette has filed a Freedom of Information Law request to obtain access to Euphrates’ sewer bills. Access to the public records was at first granted but then quickly retracted by Bevington, who said he couldn’t allow access to the information because of an ongoing investigation. The Gazette has appealed the denial.