Nine Metro employees have been arrested for their part in an elaborate scheme to load SmarTrip cards with leftover passenger fares and resell the cards fraudulently, News4 has learned.

Seven Metro station managers and two custodians had been collecting paper fare cards from riders and allowing those riders to exit the system for free. After the employees collected a sizable stack of paper fare cards -- which still contained value -- the employees would transfer the balance of those fare cards to plastic SmarTrip cards and then sell the SmarTrip cards at a discounted price.

"It was happening because -- let's say late at night -- riders didn't have enough fare to exit the system on their fare card. The station manager would just tell them give me the card and go," a source with direct knowledge of the events tells News 4. "They were collecting all these paper fare cards."

If a Metro rider gets off a train and doesn't have enough fare loaded onto their fare card to pay the exit price, they are directed to an exit fare machine to load the correct fare and then they can exit. But the station managers and custodians were turning a blind eye to that process and were instead keeping the paper fare cards, which still contained value, for themselves.

"It's theft," Metro Chief Spokesperson Dan Stessel told News4 in an interview Wednesday. "It wasn't a coordinated effort. These appear to be employees who made a bad decision and engaged in a violation of public trust."

Not only did they steal money, but they stole from Metro, which finds itself clawing for every penny it can get as it embarks on a massive rebuilding effort.

In many cases, multiple SmarTrip cards loaded up with fraudulent money would be turned around and sold for less.

"I'm aware of one case where a $100 SmarTrip card was re-sold for $60," said Stessel.

Some of the SmarTrip cards were turning up for sale on Craigslist or eBay.

Metro says the entire issue was detected internally.

It's not clear exactly how much money Metro lost overall, but the transit agency quantified it as a relatively low amount.

The illegal activity happened in D.C., Maryland and Virginia between July and October last year. All the employees involved were arrested, fired and face misdemeanor charges.

Metro hired a new general manager late last year and has talked about the need to change its culture. The news that this scheme involved station managers, a position that requires seniority to achieve, seems to underscore that point.

"We have 13,000 employees. I defy you to find an organization with 13,000 employees where you don't have occasional issues like this," said Stessel.

Metro is currently phasing out all of its paper fare cards. The last day paper fare cards can be used at fare gates is March 6.