Parking Meter Revenues Are Fair Game

March, 2008

Larry Donoghue is a parking industry legend and a featured speaker at the Parking Industry Exhibition that begins March 30 in Chicago. His presentation will provide insights into on-street theft and methods you can take to avoid revenue loss. Editor.

Even though single-space parking meters accept just nickels, dimes and quarters, theft of parking revenue in some municipalities has ranged up to $5 million. Our research has revealed that theft by employees occurs in all regions of the United States and Canada and in municipalities of all sizes. Naturally, the larger thefts occur in the larger cities.
Some cities, after having caught their collection employees committing fraud, decided to have the collections done by armored service employees. That hasn’t eliminated the problem.
We served as an expert witness for a large city in the Northeast that had done that. When the collectors were caught red-handed and arrested, the crew of five men had $5,800 in quarters in their possession. That is more than $1,100 per man, and that was just one day’s take. The only reason they hadn’t taken more was the fact that $1,100 in quarters weighs 55 pounds! The five men went to jail and the city sued the armored service company. Our testimony was helpful in achieving an award of $2 million in compensatory damages and $5 million in punitive damages.
In one major California city, 19 of the 20 members of the collection crew, including the crew chief, stole $600,000 per year for six years, taking a total of $3.6 million. The one honest, relatively new collection crew member reported the fraud to the police department.
One coastal mid-Atlantic city also switched to an armored service company for its collections. In that instance, the armored service employees would turn in the meter keys to the city employee in charge of the keys. He would sign them in and take them to a men’s room and pass the keys out a window to one of the armored service employees. They then went back out on the street and what they collected was shared with the corrupt city employee. That fraud was estimated to be in the low seven figures.
The greatest meter thefts usually occur during the collection process. However, they also regularly occur in the counting and maintenance activities.
In one southeastern city, a trusted long-time female employee was caught leaving at the end of the day with $250 in coins in her oversize purse. A counting employee of a midwest Canadian city was suspected of theft when they searched her automobile and found $500 in rolled quarters in its trunk. The city estimated itsloss at about $20,000 before it was detected. A counting employee of a southwestern city removed the innards of a Thermos bottle that was in his lunchbox and filled it with about $30 to $35 worth of coins every day.
A maintenance employee was caught pilfering meters at a major airport in the Northeast. He was caught when one of the airport employees told the parking manager that one of his maintenance employees was very energetic. He saw him out checking the meters every day at 7:00 a.m., which was one hour before all the other parking meter employees started work. The parking manager checked into it; it turned out the man no longer worked in the parking operation. He had transferred to airport maintenance. However, he had kept the key that opens the top of the parking meters. What he would do is open several good meters and insert a bent bottle top ring at the bottom of the meter housings where the coins drop down into the meter vaults. It would trap the coins in the top part of the meters to which he had access with his key. Each morning, he would spend about one hour in the parking lot opening meter tops and removing the coins trapped in the upper compartment.
External theft is a major cause of meter revenue losses.
Professional meter theft rings operate all over the United States and Canada. They come into a city, and on the first night they cut meter heads off their posts and take them to a motel. One of the ring members is a locksmith; he makes keys for the meters. On the following night, the ring makes a raid and takes anywhere from $20,000 to $30,000 in coins in that one night.
In some cases, the members of the ring have uniforms of various colors, matching those worn by that city’s collection crew. They operate from about 2 to 4 p.m. after the regular collection crew is done for the day.
We have documented 97 different ways that meter theft can occur. We have devised defensive actions that can be taken to protect against the most damaging kinds of meter fraud. If you are responsible for a parking meter system, you should give consideration to receiving training in the various steps that can be taken to prevent the losses due to all of the types of fraud that have been perpetrated successfully in the past.

Contact Larry Donoghue at ldonogh@aol.com.