Bloomberg News Aug. 6, 2005 12:00 AM
WASHINGTON - Former Waste Management Inc. Chairman Dean Buntrock agreed to pay almost $20 million to settle U.S. regulators' claims he helped orchestrate an accounting fraud at the trash-hauling company, people familiar with the matter said Friday.
Buntrock, 74, will be fined $2.3 million by the Securities and Exchange Commission and forfeit his profits from the alleged $1.7 billion fraud, said the people, who declined to be named.
Under SEC policy, Buntrock must pay the fine out of his own pocket.
Waste Management may have to cover the remainder of the settlement, the people said.
The SEC accused Buntrock in 2002 of leading a "massive" fraud from 1992 to 1997 that cost shareholders $6 billion.
He denied the allegations and said the company never should have restated earnings. He also countersued then-SEC Chairman Harvey Pitt in a complaint that later was dismissed in federal court.
The SEC alleged that Buntrock and five executives, including former Chief Financial Officer James Koenig, "driven by greed," failed to report expenses, postponed costs and filed false financial statements for five years.
Waste Management restated its results for that period in 1998, cutting profit by $1.7 billion in what the SEC said at the time was the largest-ever accounting correction.