UPDATED: Second whistleblower lawsuit filed against EPB

UPDATED: Second whistleblower lawsuit filed against EPB

September 24th, 2014 by Ellis Smith in Local - Breaking News

Don Lepard

Don Lepard

Photo by John Rawlston /Times Free Press.

Harold DePriest

Harold DePriest

Photo by Doug Strickland /Times Free Press.

Updated at 12:10 p.m. to reflect EPB's response to the second lawsuit.

A second whistleblower lawsuit filed against EPB alleges that the utility overbilled the cities of East Ridge and Red Bank over 20 years by charging the cities for streetlights that didn't exist or were misclassified.

The lawsuit, filed on behalf of East Ridge and Red Bank by onetime city lighting contractor Don Lepard, asks for $4.8 million in penalties for False Claims Act violations, and $1.23 million in treble damages.

Lepard alleges that when he discovered EPB's misclassified lights and told the utility, officials began reclassifying lights on its accounting sheets and billing en masse without informing city officials about what Lepard alleges could be as many as 20 years of overbilling.

The lawsuit largely mirrors an existing whistleblower lawsuit pending against EPB for the same alleged violations of the False Claims Act against the city of Chattanooga, which claims damages against city taxpayers of more than $10 million.

"It should concern all customers that the EPB was overcharging taxpayers in several cities," Lepard said. "This case, like Chattanooga's, needs to be vetted by an independent court so that the cities and their taxpayers can recoup tax dollars they should not have paid to the EPB."

EPB has pointed out previously that while Chattanooga could have taken the lead on the lawsuit, it instead allowed Lepard to proceed on its stead. The utility has been working for some months to settle allegations of overbilling with Chattanooga officials behind the scenes, though there remains significant disagreement between the two parties. City auditor Stan Sewell claims the city is owed $1.2 million for 7 years of overbilling - not 20 years as claimed in Lepard's lawsuit - while EPB claims the overbilling was offset by other mistakes, resulting in a complete wash.

Harold DePriest, president and CEO of EPB, rejected the claims made in Lepard's new lawsuit.

"Don Lepard's second lawsuit is just as frivolous as the first" said DePriest. "The fact that Chattanooga, East Ridge, and Red Bank have not joined Lepard in this filing speaks volumes. We are seeking the prompt dismissal of these frivolous lawsuits. In the meantime, we are continuing to work with our city partners."

The actual overcharges of East Ridge and Red Bank over the last 20 years amounts to just under $400,000, Lepard calculated. But though the amounts are smaller than in Chattanooga, he maintained that the alleged overbilling establishes a pattern.

"While the numbers are smaller, what we found when we looked at the billing for East Ridge and Red Bank was that the EPB's method of overcharging on the energy costs were virtually the same as occurred with Chattanooga," said Lepard. "These dollars are extremely important to smaller cities like Red Bank and East Ridge, but what is really important is the consistent pattern of the EPB's overcharges of all of its customers and not just the city of Chattanooga."

Read more in tomorrow's Times Free Press.

News report about the first lawsuit: