California's beverage container recycling program loopholed by fraudsters

Sacramento [US], July 29: California's beverage container recycling program has been constantly taken advantage of by scammers who have defrauded the state of millions of dollars.
The most recent case involved eight people, all family members in Southern California, who allegedly earned 7.6 million U.S. dollars by smuggling 178 tons of used bottles and cans from the neighboring state of Arizona to recycle them in California.
Their illegal activities lasted eight months until investigators busted their scheme. The agents also searched six locations and seized additional "illegally imported beverage containers" worth more than 1 million dollars, according to a press release of the California attorney general's office this week.
The suspects face multiple charges including recycling fraud, grand theft and conspiracy, which could lead to years behind bars.
When consumers in California purchase beverages in plastic, aluminum or glass containers, they typically pay an extra 5 to 10 cents in "California Redemption Value," or CRV.
The consumer can get back the money by returning the used containers to one of the state's more than 1,200 recycling centers. When the containers are recycled, the recycler can collect a refund of the CRV paid by the state.
This CRV fund, subsidized by consumers, aims to help offset the materials' impact on the environment. Only material from California is eligible for redemption under the state's recycling program.
Not all states in the country have such recycling programs, prompting smugglers to transfer used bottles from other states like Arizona to California for refunds.
However, there is no difference between cans and bottles sold in California and in other states, making it difficult for authorities to stop smugglers from bringing in containers sold elsewhere to be recycled in California.
California prosecutors said the program had been taken advantage of on a "chronic and ongoing basis" by fraudsters seeking reimbursement for out-of-state containers or containers that had already been redeemed within California.
In March, two business owners in Arizona were arrested for allegedly delivering tons of recyclables from Arizona to California to take advantage of the CRV program.
Their arrests are part of a large recycling fraud scheme, which the California Department of Justice has been investigating since 2021. The investigation led to the arrests of six people in the Los Angeles area in 2022.
A similar scheme involving another group in Arizona was busted in 2018. Three people were arrested for allegedly defrauding the California CRV program of a total of 16.1 million dollars in recycling value, according to the California attorney general's office.
Also in 2018, California authorities busted a multi-year scheme, in which five people in the San Francisco Bay Area were accused of defrauding the state's CRV program out of 80.3 million dollars from January 2012 to December 2015.
The easy money has led to increasing fraud, which prompted the California Department of Justice to launch a Recycle Fraud Program to detect and stop existing fraud against the CRV fund.
Between 2010 and 2019, the California Department of Resources Recycling and Recovery won 93 convictions related to recycling fraud, according to a report titled Cash for Trash released by the nonprofit Consumer Watchdog in January 2022.
Californians pay about 1.5 billion dollars a year in deposits for the beverage they purchased and get back little more than half that money, the report added.
Source: Xinhua