Brown Files Charges Against Sham Electronic Waste Recyclers

Wednesday, August 25, 2010
Contact: (415) 703-5837,

SAN JOSE – Attorney General Edmund G. Brown Jr. today announced criminal charges against the owner and two managers of San Jose-based electronic waste recycler Tung Tai Group, after the company submitted $1 million in “fraudulent and fictitious” reimbursement claims for more than 2 million pounds of electronic waste that they never recycled.

“Tung Tai Group attempted to collect $1 million in fraudulent and fictitious state reimbursements for millions of pounds of electronic waste that didn’t exist,” Brown said. “This brazen scheme is a violation of state law and the public trust.”

Two managers, John Chen, 38, of Hillsborough, and Jason Huang, 65, of Foster City, were arrested last week and posted bail, set at $1 million each. The owner, Joseph Chen, 69, of Hillsborough, is in China and arrangements are being made for him to return to the U.S. to be arraigned on the charges.

Together, the men face 17 criminal counts for submitting false documents, attempting to defraud the state, forgery and hazardous waste storage and handling violations. If convicted, the men face a maximum of nine years in prison.

“These arrests show that this department is committed to keeping e-waste out of our landfills and to rooting out those who would defraud our system for private financial gain,” said Maziar Movassaghi, acting director of the Department of Toxic Substances Control.

Electronic waste recyclers break down televisions, computer monitors, laptop computers and other waste collected from California businesses and households. Recyclers break the waste into various recyclable parts and submit a claim for reimbursement to the Department of Resources Recycling and Recovery (CalRecycle). On average, CalRecycle pays 39 cents per pound of material recycled.

In late 2008, CalRecycle auditors contacted investigators at the Department of Toxic Substances Control after noticing discrepancies in the claims submitted by Tung Tai and the records kept by Golden State Records and Recycling, a company that collected and transferred materials to Tung Tai.

In July 2009, agents searched the Tung Tai facility and discovered two separate sets of records, which provided evidence that the company submitted claims to CalRecycle between January and September 2008 that grossly inflated the amount of pounds of recycled material eligible for reimbursement.

For example, one set of records showed that a collector delivered 62,000 pounds of material to Tung Tai, but forms submitted to CalRecycle for reimbursement listed nearly 555,000 pounds. This deception increased the amount Tung Tai sought from the state by more than $235,000.

In addition, Tung Tai submitted records to CalRecycle listing items that were never delivered to Tung Tai by any approved collector of electronic waste.

The state did not make payments on the falsified and inflated requests for reimbursement, which totaled $1 million.

These charges underscore Brown’s commitment to prosecuting fraud against state agencies. In May, Brown shut down three recycling fraud rings that smuggled cans and bottles worth more than $3.5 million in recycling fees into California.

John Chen and Huang are being arraigned at the San Jose Courthouse on September 9.

A copy of the complaint, which was filed in Santa Clara Superior Court, is attached.

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PDF icon n1983_tung_tai_complaint.pdf261.04 KB