LADWP sues firm, claims taxpayer money was used on prostitutes, bachelor party

Los Angeles Department of Water and Power is shown in this undated file photo.

Lawyers for the Los Angeles Department of Water and Power filed a lawsuit claiming PricewaterhouseCoopers, a firm hired to handle the troubled rollout of the utility's billing system, intentionally over-billed the city and spent money on prostitutes and a bachelor party in Vegas.

In a statement to Eyewitness News, the company denied the allegations. The statement read in part: "PricewaterhouseCoopers never submitted falsified time records to LADWP and never received a single dollar from LADWP to which it was not due."

The DWP originally sued PricewaterhouseCoopers in 2015, accusing the company of mismanaging the rollout of the billing system in 2013. The court papers filed Thursday seek to amend the lawsuit to add allegations of conspiracy and fraud.

DWP officials alleged in the court papers that PwC withheld "tens of thousands of dollars" from the city, and the money was used to pay for "the services of prostitutes and escorts," along with a "lavish bachelor party" for the partner in charge of the billing system project, held July 15-17, 2011, in Las Vegas. The court document contends the party "included extravagant nights of partying, lavish hotel stays and thousands of dollars in bottle service' alcohol."

The DWP also alleged the PwC partner who master-minded and personally directed the fraudulent billing conspiracy openly talked about his intention, telling fellow co-conspirators "We are going to cover a lot of this trip with LADWP money," the court papers alleged.

Daniel Thomasch, attorney for PwC, blasted the allegations raised in the court documents, insisting - as he did when the original lawsuit was filed - that the case has no merit.

The flawed rollout of the DWP billing system resulted in inaccurate and sometimes inflated bills being sent to numerous customers, while others did not receive any bills at all.

The city agreed last year to pay $44 million to settle a class-action lawsuit on behalf of DWP customers who were inaccurately billed as a result of the flawed billing system.

City News Service contributed to this report.
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