The Securities and Exchange Commission ("Commission") today filed a Complaint charging the founder and five other former top officers of Waste Management, Inc. ("Waste Management" or "Company") with perpetrating a massive financial fraud lasting more than five years. The Commission alleged that, beginning in 1992 and continuing into 1997, defendants engaged in a systematic scheme to falsify and misrepresent Waste Management's financial results and thereby enrich themselves and keep their jobs. The scheme was orchestrated and implemented by Waste Management's most senior officers:

• Dean L. Buntrock - Waste Management's founder, chairman of the Board of Directors, and chief executive officer during most of the relevant period;
• Phillip B. Rooney - president and chief operating officer, director, and CEO for a portion of the relevant period;
• James E. Koenig - executive vice president and chief financial officer;
• Thomas C. Hau - vice president, corporate controller, and chief accounting officer;
• Herbert Getz - senior vice president, general counsel, and secretary; and
• Bruce D. Tobecksen - vice president of finance.

The Commission brought its action in the United States District Court for the Northern District of Illinois. The Complaint alleges that the defendants violated, and aided and abetted violations of, antifraud, reporting, and record-keeping provisions of the federal securities laws. As relief, the Commission seeks final judgments permanently enjoining defendants from further violations of these provisions, ordering disgorgement of defendants' ill-gotten gains plus prejudgment thereon, imposing civil money penalties, and prohibiting defendants from serving as officers or directors of public companies.

In its Complaint, the Commission alleges the following:

Defendants fraudulently manipulated the Company's financial results to meet predetermined earnings targets. The Company's revenues and profits were not growing fast enough to meet these targets, so defendants instead resorted to improperly eliminating and deferring current period expenses to inflate earnings. They employed a multitude of improper accounting practices to achieve this objective. Among other things, defendants

• avoided depreciation expenses on their garbage trucks by both assigning unsupported and inflated salvage values and extending their useful lives,
• assigned arbitrary salvage values to other assets that previously had no salvage value,
• failed to record expenses for decreases in the value of landfills as they were filled with waste,
• refused to record expenses necessary to write off the costs of unsuccessful and abandoned landfill development projects,
• established inflated environmental reserves (liabilities) in connection with acquisitions so that the excess reserves could be used to avoid recording unrelated operating expenses,
• improperly capitalized a variety of expenses, and
• failed to establish sufficient reserves (liabilities) to pay for income taxes and other expenses.