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Contractor Overbilled DWP Customers to Pay for Prostitutes

Attorneys for the Los Angeles Department of Water and Power filed court papers today alleging the contractor that handled the troubled rollout of the utility’s billing system three years ago intentionally over-billed the city and spent the money, in part, on prostitutes and two lavish bachelor parties in Las Vegas.

An attorney for PricewaterhouseCoopers, however, flatly denied the allegations, saying the company did not submit any false invoices to the city and “never received a single dollar from LADWP to which it was not due.”
The DWP originally sued PricewaterhouseCoopers in 2015, accusing the company of mismanaging the rollout of the billing system in 2013. The court papers filed today seek to amend the lawsuit to add allegations of conspiracy and fraud.

“PricewaterhouseCoopers not only misrepresented their qualifications and delivered a disastrously flawed billing system to LADWP, but based on the allegations in the court filing made today, they did so while violating public trust and engaging in reprehensible and potentially criminal conduct,” DWP General Manager Marcie Edwards said. “Even worse is the fact that the alleged fraudulent scheme was carried out by the PwC partner-in-charge and PwC’s senior managers working on the billing system project.

“Their alleged conduct is outrageous and our customers deserve to be repaid every dollar that the flawed billing system and fraudulent billings have cost them,” Edwards said.

According to the court papers, city investigators discovered in May that from 2011 through at least 2013, PwC and several of its top managers — including the partner leading the billing system project — conspired to defraud the city “by repeatedly submitting intentionally falsified PwC time records and invoices to the LADWP and city” for work that was never performed.

DWP officials allege in the court papers that PwC bilked the city out of “tens of thousands of dollars” and the money was used to pay for “the services of prostitutes and escorts,” along with a “lavish bachelor party” for the partner in charge of the billing system project, held July 15-17, 2011, in Las Vegas. The court document contends the party “included extravagant nights of partying, lavish hotel stays and thousands of dollars in ‘bottle service’ alcohol.”

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