AG files charges against sham e-waste recyclers
Attorney General Edmund G. Brown, Jr. announced
criminal charges against the owner and two managers of San Jose-based
electronic waste recycler Tung Tai Group, after the company submitted
$1 million in “fraudulent and fictitious” reimbursement claims
for more than 2 million pounds of electronic waste that they
“Tung Tai Group attempted to collect $1 million in fraudulent
and fictitious state reimbursements for millions of pounds of
electronic waste that didn’t exist,” Brown said. “This brazen
scheme is a violation of state law and the public trust.”
Two managers, John Chen, of Hillsborough, and Jason Huang of
Foster City, were arrested last week and posted bail, set at
$1 million each. The owner, Joseph Chen of Hillsborough, is in
China and arrangements are being made for him to return to the
United States to be arraigned on the charges.
Together, the men 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.
“These arrests show that this department is committed to keeping
e-waste out of our landfills and to rooting out those who would
defraud our system for private financial gain,” said Maziar Movassaghi,
acting director of the Department of Toxic Substances Control.
Electronic waste recyclers break down televisions, computer monitors,
laptop computers and other waste collected from California businesses
and households. Recyclers break the waste into various recyclable
parts 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, 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 2009, agents searched the Tung Tai facility and discovered
two separate sets of records, which provided evidence that the
company submitted claims to CalRecycle between January and September
2008 that grossly inflated the number of pounds of recycled material
eligible for reimbursement.
For example, one set of records showed that a collector delivered
62,000 pounds of material to Tung Tai, but forms submitted to
CalRecycle for reimbursement listed nearly 555,000 pounds. This
deception increased the amount Tung Tai sought from the state
by more than $235,000.
In addition, Tung Tai submitted records to CalRecycle listing
items that were never delivered to Tung Tai by any approved collector
of electronic waste.
The state did not make payments on the falsified and inflated
requests for reimbursement, which totaled $1 million.
This follows a recent May incident in which Brown shut down three
recycling fraud rings that smuggled cans and bottles worth more
than $3.5 million in recycling fees into California.