Agents arrest 3 suspects in $16 million recycling fraud scheme

After a five-month investigation between cross-border agencies in California and Arizona, three suspects have been arrested after allegedly using a trucking company as a front to gain $16 million worth of recyclable products to defraud California’s Beverage Container Recycling Program over the last couple of years.

The California Department of Resources Recycling and Recovery along with the California Department of Justice and the Arizona Department of Public Safety partnered in the first ever cross-border takedown.

California DOJ Fraud Team seized 27,862 pounds of empty beverage containers from a collection yard in Phoenix. The investigation alleges the owner of Bustillo’s Trucking operated his company for the sole purpose of smuggling out-of-state containers into California to defraud the California Redemption Value fund.

“The cross-border partnership between the California Department of Justice and Arizona’s law enforcement community sends a clear signal that organized criminal groups have no safe space to operate recycling fraud schemes,” CalRecycle Director Scott Smithline said. “CalRecycle and its law enforcement partners will continue to follow these investigations wherever they lead to protect public funds and the integrity of California’s Beverage Container Recycling Program.”

The seizure of aluminum beverage containers totaled 19,300 pounds with a California Redemption Value of $30,880. Empty plastic beverage containers totaled 8,560 pounds with a CRV value of $10,957.

All three suspects face charges of felony recycling fraud, grand theft, and conspiracy. Agents with the investigation believe the suspects were in collaboration with Arizona-based collection yards and are allegedly responsible for defrauding nearly $16.1 million from the CRV fund over the past three years.

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