LOS ANGELES (KNX) — A report from Consumer Watchdog has determined that fraud aimed at state beverage-container recycling programs has cost California taxpayers between $40 million and $200 million a year.
The report’s authors scoured investigations by state auditors, and found that fraudsters were padding loads, falsifying weight tickets, and engaging in other deceptive practices to enrich themselves from the state programs that offer refunds for recycled glass bottles, plastic bottles, and aluminum cans.
Consumer Watchdog claimed fraudsters were importing non-California Redemption Value (CRV) containers from out of state for illegal redemption by scheme organizers. It also found that processors, including waste haulers authorized to process recyclables on behalf of state programs, would claim the CRV on the same container more than once by running a load-bearing truck over a weight scale at least a second time. The same load would subsequently be given two different serial numbers.
Fraudsters would additionally load-up CRV hauls with broken-up non-CRV containers, such as empty wine bottles, to increase weight.
CalRecycle, the agency that oversees the state’s CRV program, has won more than 93 convictions over the last decade, with around $167 million in restitution ordered from fraudsters, including corporate processors.
But ordered restitutions are not always recovered. The report highlighted a case in which CalRecycle won $80 million in restitution against processor Recycling Services Alliance for doctoring weight tickets and other violations in 2018. When civil penalties, costs, and interest were calculated, the total came to more than $541 million. But CalRecycle and the state Department of Justice ultimately settled the case in 2021 for just $34 million.
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