Dive Brief:
- State officials in California announced the arrests of two men allegedly involved in recycling fraud. The duo received California Redemption Value payments for ineligible drink containers.
- The men filled a truck with containers in Arizona, then drove to Bakersfield, CA for the refunds. Containers from states other than California are not able to redeem the recycling fee.
- Through surveillance operations, it was discovered the men brought the containers to two recyclers, S&S Recycling and Gonzalez Recycling; both businesses are owned by James Gonzalez, who was also arrested for his alleged involvement.
Dive Insight:
Another recycler was involved by loaning over $20,000 per week to Gonzalez Recycling. According to the state agency, from November to April, Sequoia lent over $1 million in funds to Gonzalez; the monies were paid back using the fraudulent CRV fees.
Obtaining CRV in a fraudulent manner is widespread in California. This ongoing issue was addressed when a new bill was passed in September of 2012 to help identify people who are bringing containers for CRV redemption across state lines. Although the bill was established, it seems a large number of thefts still occur. New daily limits were announced in December to thwart fraudulent pay-outs, which were costing the state an estimated $200 million annually.
Two recycling centers in California were ordered to pay over $2 million in restitution and penalties stemming from their involvement in illegal claims for CRV payments. A scam that brought containers from Washington into California to collect CRV illegally cost the state an estimated $329,887 in illegal CRV payments.
