DOJ arrests five in California recycling fraud case

Agents with the state Department of Justice’s (DOJ’s) Sacramento Recycle Fraud Team in California have arrested five individuals from the Modesto-Turlock, California, area believed to have been illegally claiming California Redemption Value (CRV) refunds on beverage containers that had already been redeemed, according to a CalRecycle news release.

Among those arrested were Hughson, California, residents Michael Marchant and Leila Arretche, Jonathan Andrino of Turlock and recycling center owners Robert Nicastro and James Reese of Turlock. All were booked into the Stanislaus County (California) Jail on charges of conspiracy, grand theft and recycling fraud, with bail set at $250,000 each.

If convicted, they each face a maximum of six years and four months in county jail and a $25,000 fine, plus restitution costs.

A sixth person, Joshua Gray, is suspected of working with Andrino and is being sought by authorities.

Arretche and Marchant have pled no-contest to a felony charge of recycling fraud and have agreed to pay restitution in the amounts of $4,990 and $370,492, respectively. They will each serve 120 days jail and will be placed on supervised probation for three years.

“There’s a right way and a wrong way to make money in beverage container recycling, and when people do it the wrong way, they can end up in jail,” CalRecycle Director Caroll Mortensen says in the press release. “Along with our partners in law enforcement, we take fraud very seriously and will aggressively pursue individuals who steal from the state’s recycling fund.”

According to CalRecycle, after serving search warrants on 12 locations in late September and early October 2014, the fraud team seized records and $125,000 in cash. As a result, six recycling centers have been placed on “prepayment controls” by CalRecycle, so they are not reimbursed for CRV claims until each claim and its supporting documentation have been reviewed and determined to be legitimate.

During a two-day effort that included CalRecycle personnel, nearly 250,000 pounds—22 truckloads—of beverage containers were removed from the ranch and warehouse and sent to a processing facility.

California’s bottle bill provides an incentive for beverage container recycling by establishing a CRV of 5 cents for containers less than 24 ounces and 10 cents for containers 24 ounces or larger. CalRecycle says it is undertaking a major and multipronged effort to protect the recycling fund, including new approaches to curb fraud. Much of the emphasis is on preventing fraud before it occurs, such as enhanced training of recycling center owners and increased scrutiny of payment claims.