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Fraudulent recyclers allegedly shipped in cans and bottles from out of state

May 5, 2010 |  3:11 pm

A ring of recycling thieves trucked cans and bottles filled with sand to increase their weight from Arizona to California, prosecutors said Wednesday.

Another ring allegedly stored recyclables at a home in Las Vegas, trucked them to a house in Montclair, then sent them in smaller loads to recyclers in Southern California. A third ring was allegedly run by the owner of a San Diego recycling company.

In all, 31 people have been arrested after a four-month investigation by the California Department of Justice, officials announced Wednesday. The busts shed light on a crime that agents believe to be widespread and perhaps a sign of hard economic times: the fraudulent redemption of out-of-state recyclable materials, mostly glass and aluminum.

The three rings allegedly took in $3.5 million by fraudulently redeeming materials through the state’s recycling program, Justice Department officials said.

The recent investigations “were just scratching the surface. We’re talking truckloads of this stuff” being shipped to California for redemption at state recycling centers, said Tony Ladell, agent in charge of the department's San Diego office.

Most of the material came from Mexico, Arizona and Nevada, Ladell said.

Agents found that huge amounts of the recyclables were trucked in along Interstate 8, which runs from Arizona parallel to the U.S.-Mexico border. In one case, agents were looking for a fraudulent recycler on I-8 when they came upon a crew of two others.

The state’s CalRecycle program redeems aluminum for a minimum of $1.57 a pound, compared with a redemption value in Mexico of about 18 cents a pound. Nevada and Arizona have no redemption programs.

When a person buys a bottle or can in California, the California Redemption Value (CRV) is paid at the checkout stand, state officials said. When the container is redeemed at one of the state's 2,000 recycling facilities, the CRV is returned.

But when an out-of-state can or bottle is redeemed, the program loses money because cash is paid out for a container for which the CRV was never paid. Bringing recyclable materials worth more than $400 into California is a felony under state law.

The state fund had always had a surplus but went into the red last year, said Mark Oldfield, spokesman for the California Department of Resources Recycling and Recovery.

The main reason is because recycling has jumped statewide. Rates have increased from 67% in 2007 to an estimated 80% or more in 2009, Oldfield said.

He noted that illegal recycling has always occurred and said, "We don’t know if it’s increasing. We only know about the ones we catch. [And] we’ve had big cases in the past when the economy is good.”

But the fund’s recent shortfall has made investigations into illegal recycling more of a priority than ever, he said.

In one case, Nevada resident Mariano De Jesus Solis, 38, allegedly stored recyclables at his Las Vegas home. Twice a week, he and accomplices would fill 16-foot and 24-foot rental trucks with thousands of pounds of glass and aluminum and take them to a storage facility in Montclair, prosecutors said.

From there, accomplices would take smaller loads to recycling centers, they said. In all, the ring allegedly ran an estimated 1.6 million pounds of cans and bottles into the state for redemption, earning about $2.5 million.

Another ring, hauling recyclables from Phoenix to Moreno Valley, would fill cans and bottles with sand to add weight, according to Justice Department officials.

Department agents raided a Moreno Valley home April 20 and seized 50,000 pounds of bottles and cans with an estimated CRV value of $100,000. Many of them contained sand. Twelve people were arrested in the raid.

In February, agents near the California-Arizona border who were looking for a fraudulent ring of recyclers happened upon a crew from another ring driving into the state on I-8.

That triggered a two-month investigation into a ring that allegedly imported an estimated 40,000 pounds of cans with a redemption value of $135,000. Agents arrested Michael Barshak, the owner of ACE Recycler in San Diego, and charged him with buying the imported recyclables.

“In these economic times, people are looking for ways to make money,” Ladell said. “The crooks have figured out a way to organize this crime as well to make that quick dollar.”

-- Sam Quinones