2 New Arrests in $10 Million, Interstate Recycling Fraud Case

Office of Public Affairs
For Immediate Release: March 08, 2023
News Release #2023-01
Media Contact: Lance Klug
916-341-6293 | lance.klug@calrecycle.ca.gov

Department of Justice
916-210-6000 | agpressoffice@doj.ca.gov

LOS ANGELES – Two Arizona business owners arrested this morning for recycling fraud and grand theft face extradition to California as part of the California Department of Justice’s ongoing investigation of a recycling fraud plan to defraud California’s beverage container recycling program. Agents believe the suspects were part of a ring that brought more than nine tons of empty beverage containers from Arizona to Los Angeles for fraudulent redemption.

In addition to arresting the suspects in Phoenix and Mesa, DOJ served an order to freeze more than $800,000 from the suspects’ bank accounts.

“No matter where you are, we will hold you accountable if you defraud our state,” said Attorney General Rob Bonta. “The California Redemption program is an important tool in our efforts to encourage recycling, reduce waste, and address climate change. We will continue to work with our law enforcement and state partners to protect California’s programs and resources. I thank CalRecycle, and the Arizona Department of Safety for their work in this investigation and in apprehending these suspects.”

“CalRecycle works with our partners at the Department of Justice to root out fraud and safeguard this program that helped California recycle 463 billion bottles and cans and reduce trash pollution across the state,” CalRecycle Director Rachel Machi Wagoner said. “Beverage deposits belong to Californians and the state will actively continue to protect their funds.”

CalRecycle oversees California’s Beverage Container Recycling Program that incentivizes recycling at privately-owned centers with a 5- or 10-cent return on eligible beverage containers. Since consumers outside of California do not pay CRV deposits on beverage purchases, those containers are not eligible for CRV redemption.

Beginning in 2021, a California Department of Justice investigation revealed a group importing aluminum cans and plastic bottles from Arizona to redeem the California recycling refund value of those items illegally. The defendants allegedly brought truckloads of ineligible materials from Arizona to recycling centers in Southern California where they were estimated to have defrauded the CRV fund of more than $10 million.

Note: a criminal complaint contains charges that are only allegations against a person. Every defendant is presumed innocent unless or until proven guilty.

A copy of the complaint can be found here.

At a Glance: California’s Beverage Container Recycling Program

The Beverage Container Recycling and Litter Reduction Act of 1986 set a financial value on beverage containers to encourage recycling and reduce litter.

Californians have recycled more than 463 billion bottles and cans since 1986.
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 over 357 arrests since 2010.
Enhanced precertification training of recycling center operational requirements to deter fraud, including documentation requirements and enforcement of daily load limits.
Probationary reviews and site inspections of recycling centers.
Certified processor oversight, including load inspections of recycling center shipments.
Tracking of imported material reports, submitted by anyone hauling more than 25 pounds of aluminum, bimetal, or plastic, or over 250 pounds of glass into California.
Internal monitoring and risk assessment of daily claims for reimbursement and post-payment reviews/investigations of Beverage Container Recycling Program participants.

Californians can report suspected recycling fraud or bottle redemption violations to CalRecycle by calling 1-866-CANLOAD (226-5623) or emailing complaints@calrecycle.ca.gov.