14 Held in Recycling Fraud Case. Cali/Mexico scam.

LA TIMES ^ | October 23, 2002 | By Virginia Ellis, Times Staff Writer

[dennisw]

 

 

 

Excerpts below:

14 Held in Recycling Fraud Case

The ring made millions redeeming bottles and cans from Mexico, other states in California, authorities say.

By Virginia Ellis, Times Staff Writer

SACRAMENTO -- It was a crime ring straight out of the Hollywood mold -- fast cars, furtive trips across the border, the latest cell-phone technology, police lookouts and a haul estimated at more than $3 million. Only the payload was mundane: discarded bottles and cans.

After a yearlong investigation, law enforcement officers have arrested 14 people accused of defrauding the state's recycling program of millions of dollars by hauling bottles and cans from Mexico and neighboring states and redeeming them in Los Angeles..............................


The profit could be substantial. Discarded aluminum cans in Nevada, Arizona and Utah could be had for about $950 a ton and then sold in California for about $2,490 a ton. Plastic bottles netted even higher profits, selling for $90 a ton out of state and bringing in $910 in California.

The arrests were made by the California attorney general's Bureau of Investigations as part of a probe that involved 10 law enforcement offices and stretched to four states and Mexico.................................


Among those arrested was Migran Changulyan, 35, an unemployed truck dispatcher from Glendale who Callaghan said is believed to be the ringleader.

Changulyan and two others also were accused of collecting welfare while they took millions from the recycling program and used it to buy the accouterments of a middle-class lifestyle -- cars and homes.

"We found one defendant ... and his wife ... had been collecting welfare for 15 years while they owned a home, cars and a recycling business," Callaghan said..............................

Callaghan said Changulyan was identified early as the ringleader of the operation, but it took months of surveillance and investigation to determine how he operated and who else was involved..........................


She said lookouts would be used to search the sky for police helicopters. Cars parked near recycling centers would be checked for police insignia. Ring leaders who thought they were being followed would make quick turns or pull over and abandon their vehicles.............................

 

[Swordmaker]

They are smuggling garbage! hehehehe... only the liberal environmental crazies could make it profitable to smuggle garbage!

The market price for recycled aluminum is about $950 a ton... but the Socialist State of California will pay an artificial price of $2500 per ton. Recyclable plastic soda bottles have a market price of $95 a ton... the SSofC will pay $950 a ton!

These business people have found a cheap source of a commodity that the Socialist State of California seems to value above what it costs. They have ingeniously set them selves up as suppliers of that commodity to the state. What is criminal about this????

Perhaps the crime is COUNTERFEITING garbage? The cans and bottles may not have the CALIFORNIA recycling logo on them.

You can get out on bail much less than $2,500,000.00 for crimes of violence...

[Free the USA]

fyi

[dennisw]

Plus they were smuggling garbage from Mexico to redeem in California for a sky high price. They were arbitragers just like Ivan Boesky. 

Plus the ringleader is Hispanic. Mexican maybe? Doing the crimes that Americans are unwilling and too lazy to do?

[Great Dane]

This is strange, I keep hearing that recycling doesn't make money.

[FITZ]

Plus they were smuggling garbage from Mexico to redeem in California for a sky high price.

It shows how easy it is to get anything at all over the border ---but at least they weren't hauling illegal drugs and really if Californians are so stupid to pay too much for garbage, you can't really hold it against those willing to sell them garbage for too high a price. I kind of wish I had thought of doing this.

[Rocksalt]

I gotta admit,this was a pretty ingenious scam.I'm suprised there isn't a lot more crooks out there doing it too,as the profit margin was enormous.If the bottles didn't have the California stamp on them,I'm real suprised no one caught on,unless there was some kickbacks going on from the recycling centers.

[FITZ]

Bail for each of the 14 was set at $2.5 million and all are still in custody.

That is a ridiculous bail ---I guess when you commit a crime against something politically correct like recycling, it's taken very seriously.

[Great Dane]

I gotta admit,this was a pretty ingenious scam.I'm suprised there isn't a lot more crooks out there doing it too,as the profit margin was enormous.If the bottles didn't have the California stamp on them,I'm real suprised no one caught on,unless there was some kickbacks going on from the recycling centers. Yes there is money in them old bottles and cans, I remember in the old days, retired people would go along the highway and picnic areas and pick up money makers, it sure helped their retirement. But our City fathers keeps telling us, it will be years before they break even on recycling........ the reason for that could just be an excuse to keep raising garbage fees.

[Rocksalt]

"could just be an excuse to keep raising garbage fees"

Man you wouldn't believe how high the garbage fees are at our local dump.Fees for curbside service are steep too.They seem to do this to keep garbage out of the wastestream and encourage recycling.Here you can recycle virtually everything except little plastic wrappers.

[ikka]

Sue the state in Federal court. Interstate commerce clause.

[homeschool mama]

**The market price for recycled aluminum is about $950 a ton... but the Socialist State of California will pay an artificial price of $2500 per ton. Recyclable plastic soda bottles have a market price of $95 a ton... the SSofC will pay $950 a ton! **

Hmmm...are you sure on your prices?

[SicTransitGloriaMundi]

CA is paying the deposit refunds, I'd assume.

[RippinGood]

hmmm... this is similar to a Seinfeld episode a while back...

[Rocksalt]

I'm not remembering the episode you are refering to.How did it go?

[Swordmaker]

" Hmmm...are you sure on your prices?"

Yes. The same person who is credited with auditing Rush Limbaugh's accuracy rating, Tom Sullivan, of the Sullivan Group, was talking about it today on KFBK.

[lmr]

I am in the waste business. We exist in a free-enterprise market. There is absolutely no money in recycling. Period. Trash fees increase because of mandatory programs like recycling and skyrocketing disposal (landfill) costs. I have noticed that everyone who is pushing recycling as the way to go doesn't want to pay for it. They seem to think that if they are "saving the earth" that it should be done on someone else's dime, the attitude stinks. All of this government mandated recycling and these "bottle bills" that inflate the real price of these worthless commodities serve only as a detriment to the whole concept of recycling and encourages fraud. Recycling would not exist as it does now in a purely free market system. Despite rising landfill costs, this is still the cheapest method of disposal going. Recycling must be subsidized almost everywhere it exists.

[lmr]

I mean to say that local landfills are the cheapest method of disposal going right now. Waste to energy may be the wave of the future, but that remains to be seen. Incineration is costly (4 to 5 times the cost of landfill) because of the EPA regulations on the burning and emissions coming from these sites, and then the ashes must be disposed of properly too. I will agree that there is no simple solution to trash but I feel that (especially in my local market, Wichita Ks.) industry and not government is the solution. I understand in some areas government has always handled waste removal and disposal, but perhaps they should give private industry a crack at it, we can do better than the government. As a matter of fact, we have made proposals to our local government which will guarantee trash rates for 20 years (with cost-of-living increases only) and include a recycling program, but our city is rejecting it and pushing a "franchising" system which is guaranteed to put companies out of business, and makes no guarantees on level of service and price, especially in the future. With government it is rarely what is best for people, and more about what they can control. Government needs to stay out of the trash business because they have already screwed it up enough.

[RippinGood]

As I remember it, Newman and Kramer hatched a plan to collect bottles and cans in NYC and transport them to Michigan (?) where the redemption deposit is 10 cents rather than 5 cents. The big problem was the cost of transportation, but Newman was able to get a US Mail truck (needed to be driven to MI anyway as I recall and Newman was able to get himself to be the one to drive it) to transport the cans / bottles for free. There was a time constraint on how long they could have the truck and Kramer ends up throwing Newman out of the truck to be able to go faster… Pretty funny episode.