Southern California Recycling Fraud Ring Busted

Southern California Recycling Fraud Ring Busted

by ENS, SACRAMENTO, California

13th March 2006

Four Southern California men have been charged with defrauding the state's beverage container recycling program by using their recycling center to falsely redeem more than $6 million worth of ineligible cans and bottles.

"These con artists stole millions of dollars from California's recycling program, which is nationally renowned for its success in getting consumers to recycle more bottles and cans," said California Attorney General Bill Lockyer. "This kind of fraud endangers the program's great success, and I will prosecute lawbreakers to the fullest extent."

The Environmental Crimes Unit of the DOJ's Bureau of Investigation arrested two of the men earlier this month, while two others are still at large.

The arrests are the result of an investigation that began in 2004. The scheme involved Alameda Metal Recycling, a Los Angeles based recycling center owned by D. Robert Schwartz, run by Santos Saenz and associates Jose De Luna and Jose Freddie De Luna, that allegedly was used to launder large amounts of ineligible materials to defraud the container recycling fund.

The alleged fraud was accomplished in two ways. First, ineligible containers transported from outside California were brought to Alameda Metal Recycling and then transferred to Bestway Recycling, a certified processor, for redemption of California Redemption Value (CRV).

Second, previously redeemed material was brought to Alameda Metal Recycling and was immediately transferred to Bestway for a second, illegal CRV reimbursement.

Saenz, 38, was arrested and is being held at the Los Angeles County Jail on a five million dollar bail. Jose Freddie De Luna, 23 was arrested in Desert Hot Springs and is being held at the Riverside County Jail in Indio on five million dollars bail.

All four men are charged with four felony counts of grand theft, recycling fraud and conspiracy. Agents also seized more than $50,000 in cash, two handguns, numerous semi-trucks, trailers and personal vehicles.

"Recycling is important for California because it saves energy, provides valuable raw materials and conserves our natural resources," said Bridgett Luther, director of the Department of Conservation, which oversees the state's beverage container recycling program. "We take recycling fraud seriously and applaud the efforts of law enforcement officials to make sure that those who cheat the system face the consequences of their actio