Metro employee Horace Dexter McDade typically spent his days traveling from one subway station to another, collecting bills and coins from fare machines.
Often, Metro Transit Police officer John Vincent Haile was nearby, watching over McDade as he made his rounds and trucked the cash to a collection facility in Alexandria.
But authorities allege that the two men have been taking an unofficial detour, driving to a spot near the Capital Beltway a few hundred yards from the collection building and hiding part of the day’s take. When their shift was done, they would return in their own cars and make off with the money.
On Wednesday night, federal authorities arrested the pair and charged them with conspiring to commit theft. According to an affidavit filed in U.S. District Court, the two have been conspiring since at least 2010.
Surveillance tapes and a confidential source revealed that Haile used bags of the collected coins to buy lottery tickets, according to the affidavit. He collected close to $63,000 in winnings over the past four years.
A federal judge released McDade, 58, of Bowie and Haile, 54, of Woodbridge with no bond after they made their initial appearance Thursday afternoon. A status conference is set for Monday.
McDade told Magistrate Judge T. Rawles Jones Jr. that he plans to hire a lawyer. Haile asked the judge to appoint one for him, according to federal officials. If convicted, McDade and Haile face a maximum penalty of five years in prison.
“They were stealing from the very system they’ve been entrusted to protect, defend and support,” Neil H. MacBride, the U.S. attorney for the Eastern District of Virginia, said.
It was unclear how much money may have been stolen. Prosecutors say that Haile’s bank records show unexplained cash deposits of more than $150,000 since 2008 and that the probe is ongoing.
The pair systematically worked stations on Metro’s rail lines in Maryland, the District and Virginia, according to officials involved in the case who spoke on the condition of anonymity because they were not authorized to discuss it publicly. Investigators found that Haile would often switch his security assignment with other officers so he could work with McDade.
According to the affidavit, surveillance teams observed McDade and Haile on three days in December and January. The two would ride through a parking lot at a Marriott Courtyard hotel on Eisenhower Avenue to an underpass and hide bags of money they would unload from a Metro van. Later, each man would return separately — Haile in a gray Jaguar and McDade in a green Ford — to get their stashed cash and go their separate ways, according to court records and those involved in the case. Investigators placed Global Positioning System tracking devices on their cars and the Metro van.
The underpass is about a quarter-mile from Metro’s revenue-collection facility and is in the opposite direction of Haile’s route home to Woodbridge, authorities said.
Haile used stolen money to buy Virginia Lottery tickets — sometimes paying with bags of change, authorities say. Between October and December, he used more than $28,000 in coins and cash to purchase tickets, according to the affidavit filed by Metro Transit Police Capt. Kevin P. Gaddis.
Gaddis wrote in the affidavit that the FBI was tipped off to the alleged scheme in September, when it learned about a man dressed in a police uniform who routinely bought several hundred dollars’ worth of scratch-off lottery tickets from a Woodbridge store. A source later told agents that the officer had been going into the store for about three years, at first carrying “what he could hold in his hands” — about 50 to 100 coins — and later bringing in bags containing about $500 in change, the affidavit says. The source reported that Haile spent $13,050 in October, $7,780 in November and $7,350 in December.
Haile won a lot.
Records from the Virginia Lottery show that Haile won $32,000 last year, $17,000 in 2010, $8,400 in 2009 and $5,400 in 2008, according to the affidavit. The document said an informant told officials that Haile had also cashed winning tickets for less than $600. Records aren’t required for the lesser amounts. Gaddis wrote that lottery officials said Haile “must be buying an extraordinary amount of tickets to win with such regularity, often multiple times a month.”
Metro chief spokesman Dan Stessel said Thursday that the two men were suspended without pay and that their jobs with Metro were “pending termination.” Stessel would not disclose their salaries, saying Metro releases that information only about its executive leadership team.
McDade had worked for Metro since February 1979. In 1989, he was convicted in Prince George’s County on two counts of possession of a controlled substance. He was fined $500 and was sentenced to two years, but most of it was suspended, according to court records.
Haile had worked for the Metro Transit Police since August 1997.
The supervisor of the revenue facility in Alexandria has “been relieved of his duties,” according to a Metro news media release. Stessel would not identify that person, saying that the “action is a personnel matter rather than a criminal matter.”
Metro General Manager Richard Sarles said Thursday afternoon that he was “thoroughly disgusted and dismayed” by McDade and Haile’s alleged actions. He described the alleged scheme as a “betrayal to all the honest employees of Washington Metro.”
Stessel said Metro collects about $38 million a month from rail fares — $18 million in cash, the rest from debit and credit cards.
Collecting the money is tricky. Metro uses a special train, known as the “Money Train,” that is made up of several rail cars and runs only at night. The only passengers are heavily armed Metro Transit Police officers and technicians who collect money in large silver cases on wheels. The train is taken to the rail yard in Alexandria, where there is a facility to collect and sort the cash.
McDade, the revenue technician, was part of a special team that supplements the Money Train. Known as “Emergencies,” those members are allowed to go out accompanied by just a single Metro Transit Police officer to “replenish money in the machines and retrieve money from the machines that are full,” according to the affidavit.
Stessel would not explain how Metro reconciles how much is collected at fare machines and then taken to the Alexandria facility, saying, “Those are details that pertain to an ongoing criminal investigation.”
It isn’t the first time workers handling Metro’s money have been accused of stealing.
In 2004, Metro switched from allowing patrons to pay with cash at its parking facilities to requiring that they use electronic SmarTrip cards after an investigation found cashiers hired by a contractor had stolen millions of dollars in revenue over several years.
Sarles said the transit agency’s chief financial officer will “immediately bring in forensic accountants to conduct a thorough review of control systems and management over revenue systems to fully understand how wrongdoing occurred and to implement tighter detection systems.”
The transit agency’s inspector general is also conducting reviews, and Metro Transit Police Chief Michael Taborn is expected to conduct a “top-to-bottom assessment of all policies and procedures” involving officers assigned to the revenue-collection unit, officials said.
The case comes as Metro considers asking riders to pay higher fares and parking fees to help fill a $116 million budget gap for fiscal 2013. Riders, already stressed from service delays, chronic equipment failures and constant maintenance work, are unhappy at that prospect.
Metro workers, angry at their colleagues, worried Thursday that the alleged thefts further tarnish the transit authority’s reputation.
“It all looks bad for those of us on the front lines,” said a train operator who spoke on the condition of anonymity because employees are not allowed to talk to the media without permission. “If you have on a Metro uniform, people already say things to you like: ‘You’re stupid. When are you going to finish this?’
“This just gives more of a negative perception.”
Staff researcher Jennifer Jenkins contributed to this report.