Sunday, October 7, 2012

California Redemption Scam: Consumers Ripped-Off as State's Recycling Program Hit With $40 Million in Annual Fraud

I remember the first time I ever paid the "California Redemtion Value." It was back in 1989, in Fresno. I walked over to the Save Mart supermarket and bought some sodas, and I looked at the receipt and said, "what the...?" So I ask the cashier, "What is this, an extra tax"? He's says it's the new redemption value, "Do you vote"? As if that mattered. The state's environmental bureaucracy just squeezes this stuff by the electorate. Who knows when there's a new regulation? And they've been increasing the refund value to the point where it's almost 5 cents on a regular 12 ounce container. Unreal.

Of course, the promise of the "recycling" program is too good to be true. Redemption rates are in excess of 100 percent, with all kinds of scammers taking the state to the cleaners.

At the Los Angeles Times, "Recycling fraud costs state millions":
Just over 8.5 billion recyclable cans were sold in California last year. The number redeemed for a nickel under California's recycling law: 8.3 billion.

That's a return rate of nearly 100%.

That kind of success isn't just impressive, it's unbelievable. But the recycling rate for certain plastic containers was even higher: 104%.

California's generous recycling redemption program has led to rampant fraud. Crafty entrepreneurs are driving semi-trailers full of cans from Nevada or Arizona, which don't have deposit laws, across the border and transforming their cargo into truckfuls of nickels. In addition, recyclers inside the state are claiming redemptions for the same containers several times over, or for containers that never existed.

The illicit trade is draining the state's $1.1-billion recycling fund. Government officials recently estimated the fraud at $40 million a year, and an industry expert said it could exceed $200 million. It's one reason the strapped fund paid out $100 million more in expenses last year than it took in from deposits and other sources.

"The law says California has to make it easy to recycle … so anyone with a devious mind, it's so easy, they can just go right in," said Los Angeles County Sheriff's Deputy Dave Chapman, who has investigated fraud rings in recent months.

Under the state's 25-year-old recycling law, California charges consumers a deposit on most beverage containers sold within its borders. Anyone who brings empty containers back to one of about 2,300 privately run recycling centers can collect 5 cents for most cans and bottles and 10 cents for larger containers.

Only products sold in California are eligible. But a can is a can — and many recycling centers in California aren't that interested in where they come from.

Hence the influx from out of state. Last summer, the state Department of Food and Agriculture counted all vehicles driving into the state with used beverage containers through 16 border stations. The three-month tally was 3,500, including 505 rental trucks filled to capacity with cans.

Officials with the state Department of Justice said they have filed approximately 10 criminal cases this year against fraud rings bringing in cans from outside California.

Investigators looking into one case sometimes stumble across another.
More at the link.

The CRV is just one more unaccountable tax as far as I'm concerned. I pay it and grumble. Someone else is recouping the "deposits," and now there's evidence that it's criminals taking advantage of hard-working people. I blame the profligate state bureaucracy, a Democrat state bureaucracy.