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Recycling fraud costs California millions

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POSTED October 7, 2012 8:11 p.m.

LOS ANGELES (AP) — Rampant fraud within California's recycling redemption program is costing the state millions of dollars, as scammers drive trucks full of cans across the border from Nevada and Arizona to collect nickels on deposits that were never paid.

California recyclers also are claiming redemptions for the same containers several times, or for containers that never existed, according to an investigation by the Los Angeles Times.

Government officials recently estimated the fraud at $40 million a year, and an industry expert told the newspaper it could exceed $200 million. The state's $1.1 billion recycling fund paid out $100 million more in expenses last year than it took in from deposits and other sources, the Times said.

More than 8.5 billion recyclable cans were sold in California last year and some 8.3 billion were redeemed for a nickel, making for an improbable return rate of nearly 100 percent. The Times said the recycling rate for certain plastic containers was even higher: 104 percent.

"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," Los Angeles County Sheriff's Deputy Dave Chapman told the newspaper. Chapman has investigated several recycling fraud rings in recent months.

Under a 25-year-old recycling law, California charges consumers a deposit on most beverage containers sold in the state. 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 cans sold in California are eligible, but many recycling centers don't ask where they come from. As a result, thousands of cans are arriving from out of state.

California is the only state in the region besides Oregon with a deposit program, making it a magnet for recycling fraud. And it is the only state besides Hawaii to directly administer the program through private recycling centers.

The Times cited state Department of Food and Agriculture numbers that showed 3,500 vehicles carrying used beverage containers arrived in California last summer.

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

Gov. Jerry Brown signed a law last month that will require those importing more than 25 pounds of aluminum or plastic or 250 pounds of glass to declare at the border what their purpose is and the source and destination of the material, the Times reported.

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