Civil complaint filed against Santa Barbara environmental company for fraud

Posted: Jul 9, 2012 4:19 PM by KSBY News (staff)
Updated: Jul 9, 2012 4:30 PM

The State Attorney General's Office has filed a civil complaint against Santa Barbara based Hayden Environmental, Inc. and husband and wife co-owners Kurt Hayden and Julie Hayden seeking damages, civil penalties and injunctive relief. This, after criminal charges were filed back in May.

The couple and HEI are believed to have obtained over $1 million from the State Water Board's Underground Storage Tank Cleanup Fund.

HEI is a Santa Barbara-based environmental consulting firm that performs investigations and cleanups at about 20 petroleum contaminated underground storage tank sites in places such as Santa Barbara, Lompoc and Solvang.

The civil complaint alleges that HEI and the Haydens fraudulently and negligently misrepresented invoices submitted to the Cleanup Fund to obtain overpayments or payments they were not entitled to receive. Specifically, the complaint alleges that the Haydens billed for: hours not worked; equipment not used; markup on invoices from Julie Hayden's subcontracting company, Clean Earth Equipment Corporation; and visiting multiple sites in a single day and then billing full, daily-rate vehicle charges for each of those sites.

The State Attorney General's Office also filed a criminal complaint against the Haydens in the Santa Barbara County Superior Court a few months ago. On May 10, 2012, as part of the criminal complaint, Kurt Hayden was arrested at the couple's multi-million home in Santa Barbara and Julie Hayden was arrested at a traffic stop nearby. Both served time in the county jail until they were released at a May 14, 2012 hearing on their own recognizance with ankle monitors.

"This is the latest action in a series of actions the Office of Enforcement is preparing. This back-end auditing function, coupled with the front-end preventative measures being developed and implemented by the Cleanup Fund, will help to root out consultants that are taking advantage of the system," said Cris Carrigan, Director of the Office of Enforcement.

The Cleanup Fund is financed by a two-cent per-gallon gasoline storage fee and is used to reimburse up to $1.5 million per site for cleanup of petroleum releases at underground storage tank facilities. There are approximately 3,700 active claims to the Cleanup Fund for reimbursement. The Cleanup Fund has reimbursed $2.9 billion for eligible costs since 1992. Approximately 6,500 Cleanup Fund sites have been cleaned up and closed since the program's inception in 1989.