Recycler Sentenced to Prison for Defrauding State in CRV Case

The United States Department of Justice, Central District of California, has announced that the owner of two California recycling companies has been sentenced to 41 months in federal prison for defrauding the state California through falsifying its activities in regards to the company’s container recycling program.

Errol Segal, who controlled two California companies - Active Recycling and Worldwide Recycling - was sentenced Oct. 13th, and will begin the sentence Dec. 1. In addition to the imprisonment, Segal was ordered to pay $1.595 million in restitution to the California Department of Conservation.

Segal pleaded guilty in March to charges related to two schemes that defrauded the California Department of Conservation's recycling program out of more than $2.5 million.

Segal pleaded guilty to mail fraud and to conspiring to process non-CRV cans and bottles that were transported into California from other states and from Mexico, and then submitting falsified paperwork seeking reimbursement from California for processing those ineligible cans and bottles. The scheme led California to pay Segal and his corporations at least $1.15 million between September 1998 and February 2000.

In the second scheme, Active Recycling employees processed paperwork for non-existent bottles and cans that were never recycled. As part of this scheme, which cost California more than $445,000, Active Recycling's operations manager Memveluz Lampert oversaw employees who falsified the paperwork that allowed the company to receive CRV payments for non-existent bottles and cans.

Segal and Lampert also pleaded guilty to attempting to hinder the criminal investigation by trying to convince a key witness to lie to law enforcement agents and to the grand jury about their illegal activities.

In March, another defendant in the case, Arman Balabekyan pleaded guilty to mail fraud related to the scheme to bring recyclable materials from Mexico and elsewhere. In August and September of 2005, Artur Melikyan, Nver Nazinyan, Matevos Arzumanyan and Tigran Petrosyan each pleaded guilty to mail fraud and money laundering charges in relation to the scheme.

Also in March, Armen Khachatryan pleaded guilty to a felony for helping to conceal the scheme related to the foreign bottles and cans.

In total 11 defendants in this case have pleaded guilty

Pursuant to the terms of their guilty pleas, the guilty parties will be forbidden from ever participating in the ownership, management or operation of any entity engaged in the business of recycling beverage containers in California. Furthermore, the California Department of Conservation has revoked the recycling certifications of Active Recycling and Worldwide Recycling.