LOS ANGELES- Two men from the Los Angeles area will spend time behind bars and pay $1.25 million in restitution to the California Department of Resources Recycling and Recovery (CalRecycle) for operating multi-state recycling fraud rings from two public storage facilities in South Gate.
"Partnering with Cal Recycle, DOJ special agents can get in, witness the illegal activity, trace its tracks and arrest those responsible," said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona.
California Department of Justice special agents conducted a five-month investigation into a fraudulent recycling scam in which two men used the storage facilities as hubs to smuggle out-of-state, used beverage containers into California for the purpose of defrauding the California Redemption Value (CRV) Fund.
“Californians expect and deserve vigorous fraud-prevention efforts to ensure the nickel or dime they pay at the cash register for CRV doesn’t wind up in the hands of criminal organizations,” CalRecycle Director Scott Smithline said. “CalRecycle and its enforcement partners won’t stop until we put these smugglers out of business for good.”
Acting on a tip from CalRecycle, the California Department of Justice’s Recycling Fraud Team launched an investigation into Nova Storage and South Gate Public Self Storage in December 2015. During the investigation, agents observed used beverage containers from Phoenix, Arizona being illegally transported to the South Gate storage facilities, then taken to local recycling centers and fraudulently redeemed for California Redemption Value.
During the first week of May, special agents searched a total of 18 storage units at the two locations and seized 35,479 pounds of aluminum used beverage containers worth an estimated $70,958 in potential CRV and 9,125 pounds of plastic used beverage containers worth an estimated $11,406 in potential CRV. They arrested Francisco Flores, 59, of Los Angeles and Guillermo Chavez, 62, of Anaheim.
At a hearing on May 11, 2016, Flores pleaded guilty to charges of felony recycling fraud and was sentenced to one year in jail and ordered to pay $800,000 in restitution. Chavez pleaded guilty to grand theft and was sentenced to four months in jail and $225,000 in restitution.