Former Executives of Electronics Recycling Company Indicted

According to the U.S. Department of Justice (DOJ), two executives with Executive Recycling Inc., a defunct electronics recycling firm based in Colorado, have been indicted by a federal grand jury on charges of wire and mail fraud, environmental crimes in connection with the failure to file a notification to export hazardous waste, exportation contrary to law and destruction and alteration or falsification of records.

The two executives, Brandon Richter, owner and CEO, and Tor Olson, former vice president of operations, were summoned to make their initial appearance before the U.S. District Court in Denver on Sept. 22, 2011.

According to the indictment, Executive Recycling was an electronic scrap recycling business located in Englewood, Colo., with affiliated locations in Utah and Nebraska. The company was registered with the Colorado Department of Public Health and Environment as a “Large Quantity Handler of Universal Waste.”

A significant portion of electronic scrap collected by the defendants was cathode ray tubes (CRTs). According to the DOJ, the defendants engaged in exporting electronic scrap, including CRTs, from the United States to foreign countries, including China. The DOJ claims the defendants regularly negotiated the sale of electronic scrap to brokers who represented foreign buyers or who sold the electronic scrap overseas, and the foreign buyers often paid the defendants directly. To transport the electronic scrap, the DOJ claims the defendants used shipping cargo containers that were loaded at the company’s facility and transported to ports for export overseas.

Executive Recycling appeared as the exporter of record in more than 300 exports from the United States between 2005 and 2008, says the DOJ, adding that about 160 of the containers contained a total of more than 100,000 CRTs.

Between February 2005 and January 2009, the DOJ alleges that the defendants knowingly devised and intended to devise a scheme to defraud various business and government entities who wanted to dispose of their electronic scrap, and to obtain these business and government entities’ money by means of materially false and fraudulent pretenses.

The DOJ claims that the defendants represented themselves on a website as having “extensive knowledge of current EPA requirements.” The defendants, the DOJ notes, falsely advertised to customers that they would dispose of electronic scrap in compliance with all local, state and federal laws and regulations. It was part of the scheme that the defendants falsely represented that they would dispose of all electronic scrap, whether hazardous or not, in an environmentally friendly manner, according to the charges. Specifically, the defendants falsely represented that Executive Recycling recycled electronic scrap “properly, right here in the U.S,” the charges state. The DOJ also alleges the defendants stated to several customers that they would not send the electronic scrap overseas.

The defendants’ misrepresentation induced customers to enter into contracts or agreements with the defendants for electronic scrap disposal, according to the DOJ. Each customer paid the defendants to recycle their electronic scrap in accordance with the representations made by the defendants. However, the defendants sold the electronic scrap they received to brokers for export to China and other countries, the DOJ alleges.

“The proper disposal of our electronic waste is not only critical today, but will also become more important in the future,” says U.S. Attorney John Walsh. “U.S. law requires proper disposal of this type of waste, not only for the protection of Americans, but also so that we in the United States live up to our responsibility to be good international environmental stewards.”

“Our ongoing 30-month investigation included cooperation from law enforcement agencies in the United States, Hong Kong and Canada,” says David Marwell, special agent in charge of ICE HSI in Denver. “The investigation confirmed that Executive Recycling repeatedly exported used CRTs to China. In addition, Executive Recycling also made false promises to its customers who believed that Executive Recycling was properly disposing of their electronic waste. Homeland Security Investigations stands ready to prevent any company from circumventing U.S. controls to export hazardous waste.”

“As consumer demand for electronic goods continues to grow, communities and individuals will look for safe, domestic recycling options for electronics that are no longer needed,” says Lori Hanson, special agent in charge of EPA’s criminal enforcement program in Colorado. “EPA is committed to ensuring that companies that offer fraudulent recycling services, where electronic scrap is illegally shipped abroad, are caught and prosecuted.”

If convicted of wire fraud the defendants face up to 20 years in federal prison and a fine of up to $250,000 for each of the 11 counts. If convicted of mail fraud, the defendants face 20 years in federal prison, and a fine of up to $250,000, or twice the gross gain or loss from the offense, per count, for each of the two counts. If convicted of the one count of RCRA, the defendants face 2 years imprisonment and a fine of up to $50,000 a day or a fine of up to $500,000 or either twice the gross gain or loss. If convicted on the one count of smuggling goods from the United States, the defendants face 10 years in federal prison and a fine of up to $250,000.

If convicted of one count of destruction of records during the course of EPA’s administrative process, the defendants face 20 years in federal prison, and a fine of up to $250,000. If the corporation is convicted of wire or mail fraud it faces a fine of up to $500,000 or twice the gross gain or loss per count for each of 13 counts. If convicted of one count of RCRA, the corporation faces a fine of not more than $50,000 per day of violation or twice the gross gain or loss. If convicted of one count of smuggling goods from the United States, the corporation faces a fine of up to $500,000 or twice the gross gain or loss. The indictment includes an asset forfeiture allegation, which states that upon conviction the defendants shall forfeit to the United States any and all property or proceeds derived from their illegal activity.

This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Environmental Protection Agency Criminal Investigation Division.

Phone calls to Executive Recycling were not returned.