The owners of two recycling centers in California have been ordered to pay more than $2 million in restitution and penalties after a hearing before the California Office of Administrative Hearings established a pattern of illegal claims for California Redemption Value (CRV) payments. Paper Rush, based in San Francisco, and Recycle Today, Oakland, both also have been removed from the state’s beverage container recycling program.
During an investigation, the California Department of Resources Recycling and Recovery (CalRecycle)
found that the two recycling centers collected nearly $2 million in reimbursement from the state for ineligible materials, did not inspect the material they received, maintained improper records and filed fraudulent reports. At the hearing, an administrative law judge concurred with the CalRecycle findings, evidence and witnesses. The judge granted the department’s request for reimbursement of the illegally claimed CRV, penalties and the revocation of the centers’ certifications.
“There’s no room in California’s beverage container recycling program for those who cheat the system,” says Caroll Mortensen, director of CalRecycle. “We expect businesses that participate to operate ethically and make every effort to maintain the integrity of the Beverage Container Recycling Fund. CalRecycle will continue to go after those who don’t and to see that they are held accountable for their actions.”
June Tran Vahn and Hugo Centeno own and operate both Paper Rush and Recycle Today, CalRecycle reports.
From Oct. 1, 2008, through Dec. 31, 2009, Recycle Today and Paper Rush submitted 175 claims to collect CRV reimbursement from the beverage container recycling fund for a total of $1.97 million. Because each bale that includes ineligible material is defective in its entirety, all of the claims are void, CalRecycle says. Therefore, the companies have been ordered to pay restitution for the full amount.
As part of the decision, Paper Rush and Recycle Today have been ordered to jointly pay restitution of $1.97 million, plus $60,000 in interest and $36,000 in civil penalties. CalRecycle has filed for a clerk’s judgment based on the decision. The clerk’s judgment provides CalRecycle with the legal authority to pursue collection to the fullest extent of the law.
The investigation began following a CalRecycle inspection at a recycling facility in Fresno, after Recycle Today delivered a load of used aluminum beverage containers (UBCs). Along with the load, Recycle Today submitted to the processor a CRV reimbursement claim for $33,032.
CalRecycle inspectors found the load included previously baled aluminum cans, which are not eligible for CRV because they have already been redeemed. Upon further inspection, CalRecycle staff found that 69 percent of the UBCs in the load did not include the CRV message on the lid of the containers. Cans originally purchased within California contain the message; cans without the message were purchased outside the state and are not eligible for CRV.
As the investigation continued, both Recycle Today and Paper Rush submitted additional CRV reimbursement requests. Upon inspection, CalRecycle found that subsequent loads of material—plastic, glass and aluminum—contained previously baled and otherwise ineligible material, such as various types of plastic.
In interviews with CalRecycle investigators, owner Centeno acknowledged that bags of containers delivered to Recycle Today were not fully inspected to ensure the materials were eligible for CRV, the agency reports.
Centeno also said sellers of large volumes of material specifically instructed him to not record deliveries with a single receipt, which would reflect the entire weight of a delivery, according to CalRecycle. Rather, he was asked to fabricate multiple receipts to create the impression that several people had made a number of separate deliveries, each below the legal daily load weight limit for that particular material.