CalRecycle awarded $1.74 million in settlement

The California Department of Resources Recycling and Recovery (CalRecycle) has reached a $1.74 million settlement agreement with San Leandro, California-based Alco Iron & Metal Co., following an investigation that revealed the scrap metal company claimed refunds on California Redemption Value (CRV) beverage containers it later sold to a company that redeemed them a second time. As a result, the state refunded CRV twice on the same beverage containers.

“CalRecycle will remain vigilant in rooting out behavior that defrauds the state and the consumers who pay CRV,” says CalRecycle Director Carroll Mortensen. “The CRV program provides a proven incentive to maximize beverage container recycling in California. Companies that fail to follow requirements put in place to safeguard the integrity of the fund will be held accountable for their negligence.”

According to CalRecycle, Alco has been under investigation since 2011, after the agency received documents obtained during an investigation by the California Department of Justice. During its own investigation that followed, CalRecycle reviewed Alco transactions that occurred between December 2009 and February 2011. During that time, records show Alco processed 2.23 million pounds of aluminum used beverage containers (UBCs) and 2.82 million pounds of plastic containers, resulting in $6.6 million in payments from the state’s beverage container recycling fund.

Instead of shipping all of the previously redeemed materials to legitimate end users as required by law, Alco resold 487,926 pounds of the aluminum and 496,121 pounds of the plastic containers to a noncertified recycler, Wan Best Trading, located in Daly City, California.

As part of the settlement filed on March 11, 2015, Alco agreed to pay $1.54 million in restitution and interest resulting from CalRecycle’s payment on the previously redeemed materials. Alco also will pay $21,452 in restitution and interest for other violations discovered during CalRecycle’s investigation, including splitting loads of aluminum in order to circumvent daily load limits and filing claims on ineligible material, including out-of-state containers.

Alco facilities in San Leandro, Vallejo and Stockton will retain their CRV program certification on a Last Chance Reinstatement basis for the next five years, according to CalRecycle. Any illegal or fraudulent claims or conduct committed by Alco will result in immediate certification revocation. Alco also will be responsible for costs arising from CalRecycle’s monthly reviews, audits, and/or investigations of its processor and recycling center operations during this five-year probationary period.

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