The California Department of Justice reported they busted up a fraud ring with the arrest of five area residents, including three from Turlock, who were operating a beverage container recycling scam.
Agents from the department’s Sacramento Recycle Fraud Team said the five individuals were illegally claiming California Redemption Value refunds on beverage containers that had already been redeemed.
In late September and early October, agents served search warrants at 12 locations in Stanislaus County and took multiple suspects into custody. The fraud team seized records and $125,000 in cash. During a two-day effort CalRecycle personnel and the fraud team collected approximately 250,000 pounds — nearly 22 truckloads — of beverage containers from a ranch and a warehouse listed in the search warrants. The containers were sent to a processing facility.
Arrested were Michael Marchant and Leila Arretche of Hughson, Jonathan Andrino of Turlock, and recycling center owners Robert Nicastro and James Reese of Turlock. All were booked into the Stanislaus County Jail on charges of conspiracy, grand theft, and recycling fraud, with bail set at $250,000 each.
A sixth person, Joshua Gray, is suspected of working with Andrino and is being sought by authorities.
Arretche and Marchant have subsequently pled no-contest to a felony charge of recycling fraud and have agreed to pay restitution in the amounts of $4,990 and $370,492 respectively. They will each serve 120 days jail and will be placed on supervised probation for three years.
The remaining defendants each face a maximum of six years and four months in county jail and a $25,000 fine, plus restitution costs.
“There’s a right way and a wrong way to make money in beverage container recycling, and when people do it the wrong way, they can end up in jail,” CalRecycle Director Caroll Mortensen said. “Along with our partners in law enforcement, we take fraud very seriously and will aggressively pursue individuals who steal from the state’s recycling fund.”
California’s bottle bill provides an incentive for beverage container recycling by establishing a CRV of 5 cents for containers less than 24 ounces and 10 cents for containers 24 ounces or larger. CalRecycle is undertaking a major and multipronged effort to protect the recycling fund, including new approaches to curb fraud. Much of the emphasis is on preventing fraud before it occurs, such as enhanced training of recycling center owners and increased scrutiny of payment claims.
As a result of the investigation six recycling centers have been placed on “prepayment controls” by CalRecycle, so they are not reimbursed for CRV claims until each claim and its supporting documentation have been reviewed and determined to be legitimate.