Nov 7 - Border Stations Help Deter Recycling Fraud

While there have been some recent media scrutiny over fraud from out-of-state redemption to the Beverage Container Redemption fund, CalRecycle has already been taking actions to protect the integrity of the fund.

Last summer CalRecycle and California Department of Food and Agriculture (CDFA) conducted a pilot project at all 16 of CDFA’s border inspection stations. What they found was from June to August, 3,588 vehicles were identified as importing out-of-state beverage containers.

The pilot program supported a more comprehensive program. Since July 2012, under an interagency agreement with CalRecycle, CDFA agents who review vehicles at border inspection stations have have added a non-agricultural pest to their "no entry" list: fraudulent recyclers. The agents keep track of how much recyclable beverage containers being brought in from out-of-state (and who) in an effort to cut down on a particularly costly form of fraud.

Unscrupulous individuals defraud California taxpayers when they smuggle in and redeem comparable containers that were purchased outside California. Because no fee was paid into the California system for those containers, they don’t qualify for reimbursement which is a drain to CA's Bottle Bill Fund. The difficulty, of course, is that the containers are virtually indistinguishable once they make it into the state and into the recycling stream.

Some of the importers may be opportunist, looking for ways to make a quick buck. However, the main problem comes from organized entities driving rental trucks full of out-of-state beverage containers.

The partnership with CDFA will help inform unknowing importers and also help deter intentionally fraudulent importers. CalRecycle has also issued new regulations that will reduce how much recycling centers can accept from individual consumers per day.

In addition, CAW-sponsored bill AB 1933 by Assembly Member Rich Gordon, will help reduce out of state fraud by making it more onerous to import loose empty cans and bottles. This bill, signed into law in September, lowers the amount of beverage containers a person can bring into the state before reporting to CalRecycle, and also requires documentation of the source and destination of the material.