Plastics Recycling Update

California seeks millions for container-deposit fraud

California’s recycling program is aiming to recoup more than $14 million it says it’s owed by 12 companies, including a subsidiary of Waste Management.

The accusations, issued between 2013 and 2016 and involving the redemption of out-of-state plastic containers, were noted last month in a presentation by the Recycling Program Enforcement Branch of the California Department of Resources Recycling and Recovery (CalRecycle). CalRecycle spokesperson Mark Oldfield confirmed that each case remains unresolved at this time.

“Any suspected improper payments from the program are a concern, and CalRecycle takes such matters very seriously,” Oldfield stated.

While the details of 11 of the allegations totaling about $10.3 million are unknown at this time, CalRecycle’s accusations against Sacramento Recycling & Transfer Station are detailed in a 28-page document CalRecycle filed on Feb. 16. Sacramento Recycling is owned by publicly traded Waste Management and serves as a certified recycling center under the state’s deposit program.

American Metals Market first reported on the accusations last week.

CalRecycle claims WM’s subsidiary owes just under $4 million for filing fraudulent claims in 2013 and 2014, including the collection of processing payments for out-of-state containers and intentionally mislabeling PET and HDPE containers as aluminum, a far more valuable commodity under the program.

CalRecycle has placed the company on probation for five years, which allows Sacramento Recycling to continue to participate in the deposit program but results “in a lower threshold for CalRecycle taking disciplinary action,” Oldfield stated.

“WM denies all allegations of fraud,” Paul Rosynsky, a WM spokesperson, said in a statement. “The company has a strong commitment to recycling and is working with CalRecycle to resolve this matter.”

The 11 other companies that are the subject of CalRecycle accusations are American Green Recycling, Dougherty’s Recycling, Eagle Recycling, Enviro Recycling, J&S Recycling, Jayden’s Recycling, Junior Recycling, Mejia’s Recycling, PNL Recycling, USA Recycling and Valero Recycling.

In recent years, CalRecycle has attempted to identify fraud under the state container deposit program through its enforcement branch. Working in conjunction with the Department of Justice, CalRecycle has recently announced a number of prosecutions for fraudulent activities.

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