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Defendants are estimated to have defrauded the CalRecycle Program of over $10 million in interstate scheme out of Arizona
LOS ANGELES – California Attorney General Rob Bonta, along with CalRecycle Director Rachel Machi Wagoner, today announced two additional arrests in an ongoing investigation of a recycling fraud scheme defrauding California’s beverage container recycling program. The scheme involved bringing more than nine tons of out-of-state materials to the Los Angeles area from Arizona for redemption. The defendants, who were arrested on March 8 in Phoenix and Mesa, Arizona, are Arizona business owners who will be extradited to California for prosecution. The defendants have been charged with recycling fraud and grand theft. In addition to arresting the suspects, the California Department of Justice served an order to freeze more than $800,000 from the bank accounts of the suspects.
“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,” said CalRecycle Director Rachel Machi Wagoner. “Beverage deposits belong to Californians and the state will actively continue to protect their funds.”
The California Redemption Value (CRV) program is California’s beverage container recycling program administered by CalRecycle and incentivizes recycling at privately-owned centers with a 5- or 10-cent return on eligible beverage containers. California consumers subsidize the CRV program every time they purchase CRV-eligible bottles and cans in the state. Only material from California is eligible for redemption under this program. Beginning in 2021, a California Department of Justice investigation revealed a scheme by the individuals to import aluminum cans and plastic bottles from Arizona to the state of California to unlawfully redeem the California recycling refund value of those items.
Arizona does not have a recycling program that provides redemption value for bottles and cans. The illegal redemption of out-of-state beverage containers drains California’s CRV fund and takes funds that are subsidized by the beverage container purchases of California consumers.
The defendants allegedly brought truckloads of ineligible materials from Arizona to recycling centers in Southern California where the scheme is estimated to have defrauded the CRV fund of more than $10 million.
It is important to note that 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.