The problem, the lawsuit contends, is that Second Chance and NoVaStar have known for many years that (1) the IRS audited consumers and did not allow tax refunds or deductions for house donations made to Second Chance, and (2) that NoVaStar’s appraisals were IRS non-compliant. According to the complaint, despite this knowledge, Second Chance and NoVaStar concealed that information from Maryland consumers, including Gogtay and Dixit.
The primary way this occurred, according to attorney David Anton, involved misclassifying demolition and construction waste. Under state law, ground up raw construction material that is labeled as “fines” can legally be used to cover up the top of a landfill – in order to prevent pests, fires, and odors, for example. When construction waste is ground up and used this way, it counts as “alternative daily cover” – like a layer of frosting on a giant cake of garbage – and strangely enough, the state allows waste disposal companies to count that frosting as “diverted waste” even though it’s actually part of the landfill.
The lawsuit claimed that Recology tried to count a great many tons of its construction and demolition waste as “fines” when in reality it should have been labeled just plain garbage, because the tons of stuff that they were shipping to the Solano County landfill wasn’t being processed to a fine enough grade to comply with state requirements for what constitutes “fines.”