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Arrests Made In Alleged Tow Pound Auction Scam

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Dec 18, 2008 8:56 pm US/Eastern

Arrests Made In Alleged Tow Pound Auction Scam

Reporting
Marty Griffin
PITTSBURGH (KDKA) ― Several people have been arrested for an alleged scam involving city tow pound auctions.

According to officials, five citizens are behind bars and one city employee from the Controller's Office is at the center of the alleged scam, which allowed the five citizens to pay a lot less for vehicles than they were really worth.

Every year hundreds and hundreds of cars are towed and abandoned at the city auto pound, and if not claimed they are at some point auctioned off.

According to police, six men including a Controller's Office employee, Michael Livingstone, as well as Donald Tollan set up the alleged scam to pay much less for the cars than they actually were worth.

"It was a scam that started with an honest mistake," said Sgt. Rich Begenwald, of Pittsburgh police. "There was an honest mistake made, and what happened was Mr. Livingstone made an honest mistake and afterward the individual approached him and said, 'Thanks for hooking me up, you did me a favor, you cut me $1,000 off that car.' And then it went from there.

A few examples include a car bid at $8,500, the suspect in the scheme paid $2,000. Also, a motorcycle bid at $1,200, the suspect in the scheme paid $200.

"Through this continued investigation, detectives identified a city of Pittsburgh employee working out of the Controller's Office who was falsely recording final bid amounts for the purchase of those vehicles," said Diane Richard, Pittsburgh Police spokesperson.

According to investigators, central to the alleged scam was Controller employee Livingstone, who had control of all of the paperwork.

"I'm angry. I'm angry as the Controller. I'm angry as a public employee," said City Controller Michael Lamb. "This kind of thing makes all public employees look bad, and I'm angry as a tax paying citizen of this city that someone violated the public trust."

Lamb says his employee is now suspended without pay. He also says the policy will change immediately and there will be more checks and balances.

It is estimated that the city of Pittsburgh is out about $17,500.

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

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