Los Angeles city attorney files lawsuit against two metal recyclers

Los Angeles City Attorney Mike Feuer has filed a civil lawsuit against Gonzalez Bros. LLC and Kinsbursky Bros. Supply Inc. (KBI), which allegedly received or sold stolen catalytic converters and failed to keep proper bookkeeping records to cover the illicit nature of the fencing operation.

According to a news relase issue by Feuer, in just the last four years, the Los Angeles Police Department (LAPD) has received more than 4,367 reports of catalytic converters stolen from vehicles, typically resold on the black market.

To curb the growing trend of catalytic converter thefts, the California legislature adopted Senate Bill 267 in 2009, requiring businesses or individuals who purchase used catalytic converter parts to follow strict record keeping and payment requirements. Unless otherwise exempted, purchasers of catalytic converters are to keep detailed records of the date, name, driver’s license number and description of the parts purchased and are prohibited from providing cash payments at the time of sale.

In April, 2015, the LAPD formed the Catalytic Converter Task Force (CCTF) to investigate, identify and target the illicit market for catalytic converters in Los Angeles. The lawsuit alleges that the CCTF identified Gonzalez Bros., Pacoima, California; and Kinsbursky Bros. Supply, Anaheim, California, for alleged violations of the law. 

The lawsuit alleges the operators of Gonzalez Bros. knowingly purchased thousands of stolen catalytic converters off the black market and resold them to other recyclers, including the operators of Kinsbursky Bros.The businesses allegedly avoided required recordkeeping and payment obligations to facilitate the fencing and laundering of stolen property.

During a 2015 surveillance investigation, CCTF allegedly observed employees with Gonzalez Bros. engage in numerous paperless, cash sales of used catalytic converters, often with known catalytic converter thieves. A subsequent search warrant of the location allegedly recovered tools used to remove catalytic converters, various records and more than 300 catalytic converters. None of the records involving catalytic converter sales were alleged to contain the identifying information required by law and investigators did not locate any written agreements with other businesses regarding accepting and recycling converters.

Further investigation by CCTF discovered Kinsbursky Bros. was one of the largest buyers from Gonzalez Bros., allegedly purchasing more than 7,000 catalytic converters over the course of two-and-a-half years. Between August 2015 and September 18, 2015, alone, Kinsbursky Bros. allegedly purchased 23,822 catalytic converters through 364 transactions from a variety of sellers.

The lawsuit alleges that none of the transactions included the legally mandated information that Kinsbursky Bros. was obligated to retain. CCTF officers also failed to locate, and were not provided, any written agreements between Kinsbursky and any other business regarding accepting and recycling catalytic converters, as required by law. 

Following the L.A. City Attorney’s charges, Kinsbursky Bros., through its attorney, released a statement refuting the charges. “KBI vigorously and categorically denies these allegations and is confident that it will be vindicated once this matter is fully litigated,” attorney Eliot Krieger says in the statement.

Krieger continues, noting that both the company and he were stunned by the accusations because he and KBI have been working with the Los Angeles City Attorney’s Office over the last six months demonstrating their compliance with all recordkeeping requirements.

In the statement, Krieger says, “KBI retains detailed records of all transactions it undertakes for used catalytic converters. This appears to be a shake-down by the City Attorney’s Office targeted at an Orange County business which has always worked with law enforcement in Orange County to stay in compliance with the law.”

Krieger explains that KBI also has used a reporting system established by the City of Anaheim police department to report purchases of catalytic converters.  

The statement also says KBI’s goodwill is essential to conducting its business and is concerned of the impact that the meritless accusations may have on its 60-year-old operation as a third-generation family business. Krieger says, “KBI looks forward to presenting its case and proving that the city’s claims are entirely without merit.”

The lawsuit seeks an injunction against the operators of Gonzalez Bros. and Kinsbursky Bros., prohibiting further illegal activity and enjoining them from operating as a clearing house for stolen catalytic converters. The lawsuit also seeks civil penalties up to $2,500 for each violation.  

Multiple phone calls to Gonzales Bros. for comment were met with a busy signal.