California AG Files Charges Against Recycling Firm

Tung Tai strongly denies charges.

The office of California Attorney General Edmund Brown Jr. has announced the filing of criminal charges against the owner and two managers of Tung Tai Group, San Jose, Calif.

In announcing the filing, Brown claims that Tung Tai submitted $1 million in “fraudulent and fictitious” reimbursement claims for more than 2 million pounds of electronic scrap that the company never recycled.

Combined, Joseph Chen, owner, and John Chen and Jason Huang, managers of Tung Tai, face 17 criminal counts for submitting false documents, attempting to defraud the state, forgery and hazardous waste storage and handling violations. If convicted, the men face a maximum of nine years in prison.

A release from Attorney General Brown’s office says electronic scrap recyclers in the state process equipment and submit a claim for reimbursement to the Department of Resources Recycling and Recovery (CalRecycle). On average, CalRecycle pays 39 cents per pound of material recycled.

In late 2008, according to the Attorney General’s office, CalRecycle auditors contacted investigators at the Department of Toxic Substances Control after noticing discrepancies in the claims submitted by Tung Tai and the records kept by Golden State Records and Recycling, a company that collected and transferred materials to Tung Tai.

In July of 2009, agents searched the Tung Tai facility and discovered two separate sets of records, which, the AG’s office says, provided evidence that the company submitted claims to CalRecycle between January and September 2008 that grossly inflated the amount of pounds of recycled material eligible for reimbursement.

Additionally, Tung Tai submitted records to CalRecycle listing items that were never delivered to Tung Tai by any approved collector of electronic waste, according to the filing. The state did not make payments on the requests for reimbursement that it considers falsified and inflated, which totaled $1 million.

In a statement released by Tung Tai Group, the company, "Strongly denies recent charges made by the State that the company, its shareholder Joe Chen, its manager John Chen, and employee Jason Huang, submitted or participated in the submission of false claims for reimbursement for recycled computers and televisions.

"Such charges are completely without substance and are based on inaccurate information provided by Golden State Recycling, a collector of the materials, who has been cited by the State for recordkeeping and other violations relating to the handling of electronic waste, and who was sued for fraud in civil court by Tung Tai in 2009.

"Tung Tai is confident that the evidence, including financial records signed by the collector and corroborated by weight certificates issued by independent and licensed third party recipients of the recycled materials, will exonerate the company and its members. The company looks forward to having its day in Court and the opportunity to prove that the charges are false."

Arraignment for John Chen and Huang is scheduled for Sept. 9, 2010.

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