A California recycling firm will pay $34 million in penalties for allegedly running a fraud scheme that inflated refunds for used bottles and cans, authorities announced Monday.
Recycling Services Alliance Corp., a Sacramento-based waste management firm, and its operations manager, Maximina Perez, pleaded guilty earlier this month to recycling fraud, according to a statement from the California Department of Resources Recycling and Recovery and the office of state Attorney General Rob Bonta.
The scheme involved defrauding a state program allowing recyclers to receive payments in return for loads of California Redemption Value (CRV) eligible beverage containers.
Under a plea agreement with Bonta’s office, the company and Perez admitted to submitting fraudulent claims for CRV refunds between January 2012 and September 2016. During those years, tens of thousands of weight tickets, shipping reports and invoices were forged to obtain payments and reimbursements from the state.
Former employees told prosecutors Perez also allowed the recycling of non-CRV eligible materials, and that she took cash payments personally from individual recyclers, siphoning that money away from the company.
A forensic audit of Perez’s bank account indicated she profited more than $418,000 from the scheme.
“As a participant in the state’s Beverage Container Recycling Program, Recycling Service Alliance Corp. should have helped increase California’s environmental stewardship through conservation and waste reduction,” Bonta said in a statement. “Instead, the company employed a massive fraud scheme. Those who choose to take advantage of state programs in order to pad their pockets will be held accountable.”
According to the statement, Recycling Services Alliance will pay $33 million in restitution and a $1 million fine. Perez has been sentenced to seven years behind bars, which will be suspended if she successfully completes five years of probation. Perez will also owe restitution, the amount of which will be settled at a future court date.
