This was no nickel-and-dime operation.
California has uncovered massive fraud at Recycling Services Alliance Inc. that it says took the state's bottle bill system for millions of dollars by illegally manipulating scales that were weighing containers eligible for container refunds.
Five managers carried out what the state called a "recycling fraud scheme" impacting the California Beverage Recycling Fund at their Sacramento County location. They must repay $140.5 million in criminal restitution and administrative fees.
In a case that goes back more than a decade, the state began investigating Recycling Services in 2015. A state unit called the Recycle Fraud Team "was able to prove RSA manipulated the scales at their recycling facilities and created fabricated weight tickets for CRV (California Refund Value) claims for almost four years," the California attorney general's office said. The fraud occurred between 2012 and 2016, the state said in an indictment.
Operations managers listed by the state March 6 in an announcement about the case are Shengchien Tseng, Maxamina Perez, Marlene Davalos-Mendez, Estella Veronica Castillo and Alexandra Martinez.
The defendants were ordered to pay $53.9 million in restitution and an additional $86.6 million for administrative violations, the state said. An administrative judgment for $34 million was tacked on last month, bringing the total of $140.5 million.
Private companies in California are used to collect and process containers that have either a 5-cent or 10-cent deposit that's used to incentivize consumers to return them for recycling. These companies are paid by the state through the deposits collected at the time of sale of the products to operate within the program.
"California's recycling program is funded by consumers, and helps protect our environment and our communities," California Attorney General Rob Bonta said in a statement. "Those who try to undermine its integrity through criminal operations will be held accountable."