$16 Million Recycling Fraud Ring: Agents Track Suspects to Arizona: California Partners with Arizona in the First Ever Cross-Border Takedown

Office of Public Affairs
For Immediate Release: December 3, 2018
News Release #2018-22
Media Contact: Lance Klug

SACRAMENTO – The California Department of Resources Recycling and Recovery, in partnership with the California Department of Justice and the Arizona Department of Public Safety, is announcing the arrests of three suspects accused of using an Arizona trucking company as a front to defraud California’s Beverage Container Recycling Program.

Following a five-month investigation, culminating in the seizure of 27,860 pounds of empty beverage containers from a collection yard in Phoenix, Ariz., California DOJ Recycling Fraud Team agents believe the owner of Bustillos’ Trucking operated his company for the sole purpose of smuggling out-of-state containers into California to defraud the California Redemption Value fund.

California DOJ photos of evidence seized from a Nov. 5, 2018 property search in Phoenix, AZ

“The cross-border partnership between the California Department of Justice and Arizona’s law enforcement community sends a clear signal that organized criminal groups have no safe space to operate recycling fraud schemes,” CalRecycle Director Scott Smithline said. “CalRecycle and its law enforcement partners will continue to follow these investigations wherever they lead to protect public funds and the integrity of California’s Beverage Container Recycling Program.”

On Nov. 5, 2018, California DOJ agents coordinated with Arizona law enforcement authorities to serve three search warrants on known locations where used beverage containers were packed and loaded onto California-bound trucks. From one property, agents seized:

  • 19,300 pounds of aluminum empty beverage containers (potential CRV value: $30,880)
  • 8,560 pounds of plastic empty beverage containers (potential CRV value: $10,957)

On Nov. 7, Arizona DPS arrested owner Miguel Bustillos, 49, of Glendale, Ariz., and truck driver Anthony Sanchez, 57, of Tucson, Ariz., pursuant to warrants obtained in Los Angeles County. Both were extradited to California. On Nov. 8, California DOJ agents in Los Angeles arrested suspected broker Amaury Avila-Medina, 56, of Sylmar, Calif. All three suspects face charges of felony recycling fraud, attempted grand theft, and conspiracy. Based on evidence, agents believe the suspects, in collaboration with Arizona-based collection yards searched, are responsible for defrauding approximately $16.1 million from the CRV fund over the past three years.

Upon conviction, felony recycling fraud and related crimes carry a potential sentence of six months to three years incarceration in addition to fines, court-ordered restitution, and loss of license and/or vehicle.

At a Glance: CalRecycle’s Recycling Fraud Prevention Measures

California’s Beverage Container Recycling and Litter Reduction Act incentivizes recycling through a California Redemption Value (CRV) fee paid by California consumers at the time of purchase and refunded upon return of the empty beverage containers to CalRecycle-certified recycling centers. Because the fee is not paid on beverages purchased outside the state, those containers are not eligible for CRV redemption.

In addition to CalRecycle’s interagency agreements with CDOJ and CDFA, CalRecycle aggressively combats fraud and illicit payments through enhanced precertification training of recycling center owners; probationary reviews of recycling centers; oversight of certified processors; monitoring and tracking of imported materials; risk assessment of daily claims for reimbursement; daily load limits; application of prepayment controls; and post-payment reviews and investigations.

For more information contact, the Office of Public Affairs, opa@calrecycle.ca.gov

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CalRecycle provides oversight of California solid waste handling and recycling programs to protect human health, develop sustainable solutions that conserve resources, and reduce greenhouse gases that contribute to climate change.