Family made $7.6 million by smuggling 178 tons of Arizona cans, bottles into California and redeeming them in recycling fraud scheme, officials say

A family made $7.6 million by smuggling 178 tons of cans and bottles from Arizona into California and redeeming them over an eight-month period in a recycling fraud scheme, the California Department of Justice said.

What are the details?

Officials on Tuesday announced multiple charges — including recycling fraud, grand theft, and conspiracy — against eight family members who carried out the caper in Riverside County and defrauded California’s beverage container recycling program, the state DOJ said.

Image source: California Department of Justice

The CalRecycle program and its California Redemption Value fee incentivize recycling at privately owned centers with a 5- or 10-cent return on eligible beverage containers, the state DOJ said, adding that only material from California is eligible for redemption under the program.

More from the state DOJ:

In October 2022, the California Department of Justice (DOJ) launched an investigation into a group of recycling centers in Riverside County operated by the suspects. The investigation found that over the course of eight months, the suspects smuggled 178 tons of aluminum cans and plastic bottles from Arizona and delivered them to undocumented lots in Riverside County. The suspects then unlawfully redeemed $7.6 million in CRV funds. Arizona does not have a recycling program that provides redemption value for bottles and cans.

Today, DOJ's Bureau of Investigation Recycle Fraud Team (RFT) filed charges against the eight defendants. Its agents also served search warrants on six locations, which resulted in the seizure of $1,061,499 and additional illegally imported beverage containers. All suspects will be booked at the Riverside County Sheriff’s Department Jail.

The state DOJ added that CalRecycle also will take action against the involved recycling centers.

"California's recycling program is funded by consumers and helps protect our environment and our communities," state Attorney General Rob Bonta said. "Those who try to undermine its integrity through criminal operations will be held accountable. I am grateful to my team of diligent investigators, and to our partners at CalRecycle, for uncovering this fraud scheme and for working together to protect funds that belong to California consumers who recycle."

CalRecycle Director Rachel Machi Wagoner added that “California will not tolerate fraud against our recycling deposit system that has kept nearly a half-trillion bottles and cans from being littered or landfilled in our state. CalRecycle’s partnership with the California Department of Justice (DOJ) is working to stop criminals and protect funds that belong to Californians.”

Felony grand theft in California is punishable by up to three years in state prison, Business Insider said, adding that redeeming out-of-state containers to the level the family is accused of could increase the sentence by an extra three years.

The outlet added that six people were charged last year in a similar Arizona-to-California recycling scheme that prosecutors said amounted to more than $10 million in fraudulently redeemed beverage containers.

Business Insider, citing a report from the nonprofit Consumer Watchdog, also said at least 93 people in California were convicted of recycling fraud between 2010 and 2019.

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