Home > Uncategorized > Recycling fraud is draining California cash – latimes.com

Recycling fraud is draining California cash – latimes.com

Just over 8.5 billion recyclable cans were sold in California last year. The number redeemed for a nickel under California’s recycling law: 8.3 billion.

That’s a return rate of nearly 100%.

That kind of success isn’t just impressive, it’s unbelievable. But the recycling rate for certain plastic containers was even higher: 104%.

California’s generous recycling redemption program has led to rampant fraud. Crafty entrepreneurs are driving semi-trailers full of cans from Nevada or Arizona, which don’t have deposit laws, across the border and transforming their cargo into truckfuls of nickels. In addition, recyclers inside the state are claiming redemptions for the same containers several times over, or for containers that never existed.

The illicit trade is draining the state’s $1.1-billion recycling fund. Government officials recently estimated the fraud at $40 million a year, and an industry expert said it could exceed $200 million. It’s one reason the strapped fund paid out $100 million more in expenses last year than it took in from deposits and other sources.

“The law says California has to make it easy to recycle … so anyone with a devious mind, it’s so easy, they can just go right in,” said Los Angeles County Sheriff’s Deputy Dave Chapman, who has investigated fraud rings in recent months.

Under the state’s 25-year-old recycling law, California charges consumers a deposit on most beverage containers sold within its borders. Anyone who brings empty containers back to one of about 2,300 privately run recycling centers can collect 5 cents for most cans and bottles and 10 cents for larger containers.

Only products sold in California are eligible. But a can is a can — and many recycling centers in California aren’t that interested in where they come from.

Hence the influx from out of state. Last summer, the state Department of Food and Agriculture counted all vehicles driving into the state with used beverage containers through 16 border stations. The three-month tally was 3,500, including 505 rental trucks filled to capacity with cans.

Officials with the state Department of Justice said they have filed approximately 10 criminal cases this year against fraud rings bringing in cans from outside California.

Investigators looking into one case sometimes stumble across another.

In the spring of 2010, special agents Jose Soto and Joe Somanek, part of the Justice Department’s recycling fraud unit, were driving east on Interstate 8 to tie up some details in a case in Arizona.

Around 5 a.m, they were drinking coffee and making plans for the day when a white Ford pickup and trailer sped past them, heading west. Suspecting the truck might be carrying cans, the agents flipped a U-turn and followed it more than 150 miles to San Diego, where it pulled into Ace Recycling. The driver and his passenger unloaded 21 large bags full of cans, were paid by the owner and headed back to Yuma.

The suspects made the same journey at least three more times over the next few weeks. Officials said that fraud ring brought in at least $189,000 worth of cans before they were caught.

via Recycling fraud is draining California cash – latimes.com.

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