LADWP Over-Billed Ratepayers $40M, Attorney Claims In New Court Filings

LOS ANGELES (CBSLA) — An attorney representing Los Angeles Department of Water and Power ratepayers claims the utility over-billed $40 million for its services.

Days after a raid related to a criminal investigation into wrongdoing by the utility was conducted by the FBI, Consumer Watchdog President Jamie Court points to court documents filed Wednesday by the newly appointed attorney representing ratepayers.

The filings read in part: "It is our preliminary conclusion that the customers and rate payers of the LADWP were in some manner victimized by the city's and/or outside counsel's actions ... We have already identified approximately $40 million which is owed to the customers."

The filings follow just days after FBI agents served search warrants at two LADWP offices in downtown L.A. Monday morning.

CBS2/KCAL9 spoke with a ratepayer who was over-billed in 2015. Savely Goreshter and his wife, Stella, told us his water was about to be cut off because he could't afford a $52,000 water bill — caused, according to the DWP, by a leaky toilet.

"I was very mad and nervous and I'm OK," Goreshter said. His wife, however, is recovering from brain surgery. Goreshter  says she was having nightmares at the thought of losing their home.

DWP General Manager David Wright told CBS2/KCAL9 the cause turned out to be a faulty meter.

"We completely apologize for putting that stress in their life," Wright said at the time.

Court, however, calls the issue "widespread."

"There was a criminal conspiracy to defraud the court and to defraud rate payers of money," he claimed.

Last November, the FBI raided L.A. City Councilman Jose Huizar's office and home as part of its investigation into possible bribery, extortion and money laundering at L.A. City Hall focusing on huge real estate investments from Chinese companies.

An investigation into the utility involves allegations that an attorney, hired by the City Attorney's office, was improperly representing the city and a ratepayer at the same time in a multi-million-dollar lawsuit involving over-billing in order to engineer a favorable settlement for the city.

In August of 2015, LADWP reached a $44 million settlement in a class-action lawsuit accusing the agency of over-billing as a result of problematic initiation of a new billing system.