Three managers from Barrow-based waste firm CAW have been jailed for trying to cheat Cumbria County Council out of £100,000 by charging for rubbish not collected.
Managing director David Armer, general manager Donald Kershaw and transport manager Peter Newton were jailed for between six and 15 months.
Carlisle Crown Court heard they took advantage of lax council systems.
CAW were contracted to the county council to run seven local household waste recycling centres mainly in the south of Cumbria and to collect and dispose of household waste from them. But CAW was stripped of its contract in January 2007 after the allegations were made.
The firm was paid on the basis of a fixed fee plus an additional payment for tonnage in excess of an agreed amount. Through a variety of means, the company defrauded the council by over-inflating the tonnage it was dealing with to increase the level of payment. The councils contract management and audit procedures identified the risk and triggered an investigation by Trading Standards officers and the police.
The CAW managers admitted invoicing the county council for around £100,000 more than they should have done.
Armer was sentenced to 15 months imprisonment and ordered to pay £60,000 in costs, Kershaw was sentenced to eight months and Newton to six months imprisonment.
All three men pleaded guilty.
Judge Peter Hughes QC, said the men took advantage of a lax system and criticised county council officials who inspected the firms weighbridge and transfer station in Barrow.
Cumbria County Council acting chief executive Jill Stannard said: There are important lessons we have learned from these events. The issue was not identified and acted upon quickly enough by council officers. A management review of what took place has been carried out, and a number of recommendations regarding practices and culture within the organisation have already been taken forward including improvements to audit and monitoring arrangements and more effective promotion of whistleblowing policies. Our fraud strategy has also been reviewed and new technology put in place to detect early signs of fraud.
This investigation took place three years ago and many of the staff who were involved in waste at the time have now left the council. As is normal in cases of this type, investigations to determine if any question of capability and or disciplinary actions arises have been on hold pending criminal proceedings, but will now resume.
There is no suggestion that any council officers were involved in corruption of criminal activity. But it is absolutely right that the public should expect the highest standards from public servants.
We intend to continue with the civil proceedings which we hope will claw back considerable amounts of the money defrauded from us by this operation.