Dive Brief:
- Five people have been indicted on 166 criminal charges that allege they conspired to defraud California's state beverage container recycling program, Attorney General Xavier Becerra's office announced Thursday.
- The charges allege the five defendants conspired to create fraudulent weight tickets at Recycling Services Alliance (RSA) Corporation, a facility that was certified by CalRecycle for redemption in Sacramento County. The defendants allegedly took material from out-of-state and "engaged in an organized effort to illegally increase reimbursement claims from the [California Redemption Value] fund."
- CalRecycle concluded that RSA submitted claims to the CRV based on fraudulent weight tickets from Jan 2012-Dec. 2015, according to the agency. Claims totaled more than $80.3 million.
Dive Insight:
The investigation was a joint effort between the California Department of Justice's Recycle Fraud Program, CalRecycle, the Sacramento County Agricultural Commissioner's Weights and Measure Division and the California Department of Food and Agriculture's Division of Measurement Standards.
The 60-page indictment of the owner and four employees of RSA alleges the defendants conspired to submit claims ranging from $1,110 to $212,000. A hearing is scheduled for June 5 in Sacramento County.
This is not the first time the redemption program has been abused in California. Two men were sentenced to jail time and over $1 million in restitution in 2016 over recycling fraud. Like the events described in this indictment, the men in the 2016 case were bringing in aluminum and plastic containers from out-of-state.
"In California, those who criminally misuse public programs for personal gain will be held accountable," California Attorney General Xavier Becerra said in a statement. "[The defendants] are going to learn that the hard way."
California's container redemption continues to face regular financial challenges due to what many view as an outdated regulatory structure and payment formula. Multiple efforts to address this are underway at the state level, though more comprehensive legislative action is still seen as necessary.