The U.S. Department of Justice (DOJ), Northern District of Illinois, has announced the arrest of Brian Brundage, the former owner of Intercon Solutions Inc. and the current owner of EnviroGreen Processing LLC over allegations that he operated a multimillion-dollar fraud scheme involving the illegal landfilling or reselling of potentially hazardous electronic scrap.
According to an 11-count indictment returned in U.S. District Court in Chicago, Brundage, through both companies, caused thousands of tons of electronic scrap and other potentially hazardous materials to be landfilled, resold to customers that shipped the materials overseas or stockpiled in his facilities. The indictment claims that Brundage fraudulently misrepresented to customers that the materials had been disassembled and recycled in an environmentally sound manner.
The indictment was returned earlier in December and ordered unsealed after Brundage's arrest Dec. 19.
The indictment against Brundage includes five counts of income tax evasion, four counts of mail fraud and two counts of wire fraud. He is scheduled to make an initial appearance before U.S. Magistrate Judge David Weisman in Chicago.
The indictment seeks forfeiture of $10 million in cash.
According to the indictment, several private companies and governmental entities hired Chicago Heights-based Intercon and Gary, Indiana-based EnviroGreen for the disassembly, recycling or destruction of electronic scrap and other materials. The customer agreements stipulated that Intercon and EnviroGreen would handle all materials in an environmentally sound manner, without landfilling or exporting and without reselling the materials in whole form. Intercon specifically represented that it engaged in “absolutely no reselling, no remarketing, no landfilling, no incineration and no exportation,” the indictment states.
Unbeknownst to customers, according to the DOJ, for more than a decade, Intercon and EnviroGreen knowingly sold the electronic scrap and other materials, including potentially hazardous glass and batteries, to vendors whom Brundage knew would ship the materials overseas. Some of the materials contained cathode ray tubes (CRT), which contain potentially hazardous amounts of lead, according to the indictment.
The indictment further alleges that Brundage caused multiple tons of CRT glass and other potentially hazardous materials to be destroyed in environmentally unsafe ways and later landfilled, all in direct contravention to Intercon’s public representations regarding its recycling practices.
At one point in 2011, Intercon was publicly accused of shipping potentially hazardous materials to Hong Kong. In response, Brundage began a fraudulent effort to publicly deny and conceal Intercon’s involvement in the shipment, the indictment states. Brundage destroyed business records related to the shipment and made efforts to conceal other overseas shipments of large quantities of e-scrap, according to the indictment. The fraud scheme continued for another five years.
The tax charges relate to Brundage’s efforts to evade paying thousands of dollars in income taxes during the scheme, according to the indictment.
Each count of income tax evasion is punishable by up to five years in prison. The wire fraud and mail fraud counts each carry a maximum sentence of 20 years.
To view the indictment, click here.