Southern Californians arrested for container
Sacramento, CA— Attorney
General Bill Lockyer announced the California Department of Justice
(DOJ) arrested two Southern California men for defrauding the
state’s beverage container recycling program by using their
recycling center to falsely redeem more than $6 million worth
of ineligible cans and bottles.
The arrests by the Environmental
Crimes Unit of the DOJ’s Bureau of Investigation culminate
an investigation that began in 2004. The scheme involved Alameda
Metal Recycling, a Los Angeles-based recycling center owned by
D. Robert Schwartz, run by Santos Saenz and associates Jose De
Luna and Jose F. De Luna. The center was used to launder large
amounts of ineligible materials to defraud the container recycling
The alleged fraud was accomplished
in two ways: First, ineligible containers transported from outside
California were brought to Alameda Metals and then transferred
to Bestway Recycling, a certified processor, for redemption of
California Redemption Value (CRV). Second, previously redeemed
or “canceled” material was brought to Alameda Metals
and was immediately transferred to Bestway for a second, illegal
Santos Saenz was arrested and
is being held at the Los Angeles County Jail on a $5 million bail.
Jose F. De Luna was arrested in Desert Hot Springs and is being
held at the Riverside County Jail in Indio on $5 million bail.
His father, Jose De Luna, and D. Robert Schwartz both remain fugitives
from justice. They were charged with four felony counts of grand
theft, recycling fraud and conspiracy. Agents also seized more
than $50,000 in cash, two handguns, numerous semi-trucks, trailers
and personal vehicles.
California’s beverage recycling
program, administered by the Department of Conservation (DOC),
encourages recycling through the CRV fee on aluminum, glass and
plastic beverage containers. Consumers can redeem their containers
at privately owned recycling centers certified by DOC. It is the
responsibility of centers to ensure they redeem only eligible
bottles and cans sold in California. Recycling centers may purchase
non-redeemable bottles and cans for their scrap value, but may
not claim reimbursement from the DOC on those containers, since
no CRV was paid.
The suspects in this case brought
ineligible containers into California from out-of-state, including
Arizona and Mexico. They also obtained already redeemed (scrap)
material and resubmitted it for CRV and submitted the same material
more than once.
The DOC provides funding for
the DOJ’s enforcement in recycling fraud. DOC auditors and
enforcement staff also supply important technical assistance to
law enforcement organizations in building criminal cases related
to recycling fraud. The recycling act provides both civil and
criminal violations. DOC discovered the underlying activities,
and brought in DOJ’s criminal investigators and prosecutors
to pursue criminal actions in this case.
This is the fourth major recycling
fraud enforcement action conducted by the CBI Environmental Crimes
Unit. Lockyer formed the unit to hold accountable those who commit
environmental crimes by prosecuting them both civilly and criminally.