KDKA Investigators

PITTSBURGH (KDKA) ― There are major new allegations leveled against city employees operating the city's tow pound auction.

A witness has told police and the KDKA investigators an alleged cheating scam went on for years – not months – and may involve numerous city employees.

This story broke the week before Christmas. A city controller office employee was arrested, accused of rigging city auctions and getting kickbacks in the process.

Now the KDKA investigators have learned the scam may have gone on for as many as 10 years.

A star witness talking to Pittsburgh Police tells detectives the scam went on for years and that taxpayers were ripped off every time there was a tow pound auction.

The witness also says everyone who works at the auctions knew about it but let it go on.

KDKA spoke to the witness for the first time.

Griffin: "So for at least five years you watched the men who were arrested last week, right?"

Witness: "Yes."

Griffin: "You watched them bid up cars."

Witness: "Yes."

Griffin: "Right? And then wink, wink, nod, nod to the auctioneers?"

Witness: "Wink and nudge, yeah."

Griffin: "Nudge them?"

Witness: "Uh huh."

Griffin: "And then they would go over and give him a couple hundred bucks?"

Witness: "Yeah. Sometimes it was more up to $500 if not more."

Griffin: "And then they would get the vehicle for a fraction of the cost?"

Witness: "Like $300, $400 bucks, $500 bucks sometimes."

Griffin: "For an $8,000 car?"

Witness: "Uh huh."

The witness speaks from firsthand experience. She says she saw the scam go down time after time, year after year at the city tow pound auction. The witness says all six of the men arrested already, including a city employee were involved.

The witness says she saw Michael Livingstone, with the city controller's office, and at least one other city employee actually take payoffs.

Witness: "That guy got money in his pocket every time. If [he says] he didn't, he's a liar I seen it. I've seen it. And I just shook my head and walked away and everybody down there knew it. Everybody down there knew what they were doing. And they just – nobody would say anything."

Sources tell me this witness has told Pittsburgh Police in great detail how the scam worked, how long it went on and how many employees were involved. She talks in specifics about the auction of a boat.

Witness: "A boat went for $8,500. I believe they paid $500 for the boat. And the guy got close to $300 pocked into his pocket. I've seen that."

Griffin: "The employee for the city?"

Witness: "The employee for the city got $300 put in his pocket."

Griffin: "And you watched that?"

Witness: "I watched it, I shook my head."

Investigators initially believed the scam went on for about six months earlier this year and involved only a small number of cars and one city employee.

Now the investigation widens to more than five years to hundreds of cars, several hundred thousand dollars and a number of city employees.

Griffin: "So you have personally seen this happen for at least five years?"

Witness: "Yes. "

Griffin: "You personally watched these deals go down?"

Witness: "Yes."

Griffin: "With city employees involved?"

Witness: "Yes."

No official comment from Pittsburgh Police tonight other than to suggest they are looking at new information in this case.

However, sources close to the investigation and they have talked to the witness in our story for at least seven hours and that the witness provided extensive, credible information that may lead to new charges and new arrests in the case. 

(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)

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