11 Arrested in $2 Million Recycling Fraud Scheme

Office of Public Affairs
For Immediate Release: January 27, 2020
News Release #2020-01
Media Contact: Lance Klug

Agents Seize 27,600 Pounds of Evidence in Cross-Border Crackdown

SACRAMENTO–Following a four-month investigation, California has successfully disrupted a multi-million dollar recycling fraud operation that stretched from Nevada and Arizona to Los Angeles County. The California Department of Resources Recycling and Recovery (CalRecycle) joined the California Department of Justice to announce the arrest of a Pacoima, Calif., recycling center operator and 10 additional suspects on charges of felony recycling fraud, conspiracy, and grand theft.

The suspects are accused of smuggling out-of-state empty beverage containers into California to defraud the state’s Beverage Container Recycling Fund out of more than $2 million. Since consumers in Nevada and Arizona do not pay California Redemption Value (CRV) deposits on their beverage purchases, those containers are not eligible for CRV redemption funds.

“CalRecycle’s fraud prevention strategies are constantly evolving to protect public funds and make clear that fraudulent CRV redemption schemes will result in arrests, fines, and jail time,” said CalRecycle Acting Director Ken DaRosa. “We are grateful to the California Department of Justice for their collaboration in these enforcement activities.”

“Our state’s recycling program is subsidized by our consumers and gives back to Californians who take conscious action to recycle,” said Attorney General Xavier Becerra. “We won’t allow cheaters to defraud our publicly funded recycling programs for their selfish gain. My office will continue to hold perpetrators accountable.”

Evidence 2 of seized cans in large plastic bags Evidence of seized cans

California DOJ photos of evidence seized during the execution of search warrants conducted at Los Angeles area storage yards and recycling centers from January 13 to January 17, 2020.

CalRecycle’s law enforcement partners within the California Department of Justice uncovered evidence of a large-scale recycling fraud ring during a four-month investigation. Agents learned empty beverage containers from Nevada and Arizona were being illegally transported to Los Angeles-area self-storage facilities before being fraudulently redeemed at 15 local recycling centers, including Yulissa Recycling in Pacoima.

From January 13 through January 17, agents executed search warrants and seized 17,669 pounds of aluminum, 7,554 pounds of plastic, and 2,430 pounds of glass empty beverage containers with a potential redemption value of $38,899. Based on evidence and interviews, the scheme is estimated to have defrauded the California Redemption Value fund out of more than $2 million.

The 11 defendants arrested and charged with felony recycling fraud, conspiracy, and grand theft are Yajaira Rojas (39), Isaiah Rojas (20), Raul Fernandez (48), Catalina Hernandez (40), Enrique Morado-Amador (57), Jaime Bojado Perez (63), Jose Orozco-Lopez (48), Selvin Rodriguez (44), Amnel Ruano (31), Arturo Reyes (47), and Carlos Grimaldi (60). Upon conviction, the charges carry a potential sentence of six months to three years behind bars in addition to fines, court-ordered restitution, and possible loss of driver’s license and/or vehicle.

At a Glance: California’s Beverage Container Recycling Program

Californians have recycled more than 400 billion bottles and cans since the passage of its Bottle Bill in 1986, increasing the state’s beverage container recycling rate from 52 percent in 1988 to its current rate of 76 percent. Californians recycled 18.5 billion of the 24 billion CRV beverage containers they purchased in 2018. The state is on track to match that recycling volume in 2019.

California’s Beverage Container Recycling and Litter Reduction Act incentivizes people to recycle 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 or obligated retailers.

CalRecycle safeguards California’s Beverage Container Recycling Program through:

Interagency agreements with the California Department of Justice and the California Department of Food and Agriculture to combat recycling fraud, resulting in 267 arrests since 2010.
Nearly 2,500 CRV beverage dealer inspections throughout 2019 to make sure obligated retailers are providing redemption of containers in-store.
A $3.6 million administrative action against CVS Health Corp. and prioritized enforcement against non-compliant retailers with the largest number of violations and penalties owed.
Issuance of enforcement orders and administrative accusations against non-compliant program participants, resulting in more than $599 million in assessments served.
Streamlined recycling center application certifications resulting in 124 new application approvals since August 1, 2019.
Delivery of statutorily mandated payments to recyclers and other program participants to support the recycling of clean, high quality beverage containers that can be easily made into new products.
Allocation of additional $15 million in funding to support recycling centers and local programs to explore new redemption models that could include mobile collection.
Enhanced precertification training of recycling center operators to ensure program compliance, including documentation requirements and enforcement of daily load limits.
Probationary reviews and site inspections of recycling centers.
Certified processor oversight measures, including load inspections of recycling center shipments.
Monitoring and tracking of imported material reports, submitted by anyone hauling more than 25 pounds of aluminum, bimetal, or plastic, or more than 250 pounds of glass into the state of California.
Internal monitoring and risk assessment of daily claims for reimbursement and post-payment reviews/investigations of Beverage Container Recycling Program participants.
Maintenance of online databases directing consumers to their nearest certified recycling centers or retailers required to redeem CRV deposits in-store.

Californians are encouraged to report suspected recycling fraud or bottle redemption violations to CalRecycle’s toll free number (1-800-RECYCLE) or via email at complaints@calrecycle.ca.gov.

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