Recycling Services Alliance, operations manager reach plea agreements related to CRV fraud

The company will pay more than $34 million for multiyear bottle and can smuggling scheme, while its operations manager was sentenced to seven years in prison.

Recycling Services Alliance Corp. (RSA), Sacramento, California, will pay more than $34 million for illegally filing claims for California Refund Value (CRV) based on thousands of fabricated weight tickets, according to a news release from CalRecycle, or the California Department of Resources Recycling and Recovery. RSA will pay $33 million in restitution to CalRecycle in addition to a $1 million criminal fine. The felony convictions for recycling fraud, forging/falsifying public documents and perjury are the result of plea agreements just approved by Sacramento Superior Court.

“California’s Beverage Container Recycling program reduces litter and trash pollution, recycling 426 billion bottles and cans since the 1980s,” CalRecycle Director Rachel Machi Wagoner says. “CalRecycle’s collaboration with the California Department of Justice (CDOJ) and other state and local partners protects funds that belong to consumers who recycle.”

The state’s Attorney General Rob Bonta says, “As a participant in the state’s Beverage Container Recycling Program, Recycling Services Alliance Corp. should have helped increase California’s environmental stewardship through conservation and waste reduction. Instead, the company employed a massive fraud scheme. Those who choose to take advantage of state programs in order to pad their pockets will be held accountable.”

Under the plea agreement, CalRecyce says RSA and its operations manager admitted to fraudulently submitting claims for CRV refunds between January 2012 and September 2016. During that time, RSA fabricated weight tickets and other documents used to justify state payments and reimbursement claims, including:

  • 44,555 weight tickets;
  • 44,555 shipping reports; and
  • 2,727 processor invoices.

CDOJ’s Recycling Fraud Team launched an investigation into RSA in May of 2015 after learning from CalRecycle investigators that the Sacramento facility may have been defrauding the Beverage Container Recycling Fund by receiving out-of-state beverage containers, then illegally redeeming the containers for CRV.

As CDOJ pursued its criminal inquiry, CalRecycle says the agency’s investigators completed an analysis of RSA claims and suspended the recycler’s certification, putting RSA out of business. CalRecycle says its investigators continued to work with the CDOJ, California Department of Food and Agriculture’s Division of Measurement Standards and the Sacramento County Agricultural Commissioner’s Weights and Measures Division to explore how RSA fabricated the weight tickets used to support their claims for CRV. 

  • Grand Jury proceedings from Dec. 4 through Dec. 7, 2017, resulted in criminal indictments against RSA and Operations Manager Maximina Perez. A copy of the indictment is available here.
  • On Sept. 2, RSA pleaded guilty to recycling fraud and will pay $33 million in restitution and a $1 million fine.
  • On Sept. 3, Perez pleaded guilty to recycling fraud, forging/falsifying public documents and perjury. She was sentenced to seven years in prison, which will be suspended if she successfully completes five years of probation, the news release from CalRecycle notes. Restitution for Perez will be decided at a future hearing.

The state encourages its residents to report suspected recycling fraud or bottle redemption violations to CalRecycle’s toll-free number (1-800-RECYCLE) or via email at complaints@calrecycle.ca.gov.

 

 

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