$80.3M California Recycling Fraud Leads to Arrest of Five RSA Employees

SEATTLE (Scrap Monster): The owner and four former employees of Recycling Services Alliance (RSA) Corporation have been charged with their involvement in recycling fraud scheme. The California Department of Resources Recycling and Recovery (CalRecycle) has announced Grand Jury indictments and subsequent arrests of the five people. The culprits were found fraudulently processing out-of-state empty beverage containers for California Redemption Value refunds. In addition, they were also found to be making fraudulent weight tickets to justify state payments and reimbursement claims.

According to CalRecycle Director Scott Smithline, it had suspended RSA from its Beverage Container Recycling Program in 2016 itself, following internal audit and initiation of criminal investigation against the company by the California Department of Justice. CalRecycle will continue to work in partnership with law enforcement agencies to disrupt recycling fraud schemes in order to protect public fund.

An investigation was launched into RSA by the the California Department of Justice’s Recycling Fraud Team in May 2015, following reports that the Sacramento facility was illegally receiving out-of-state materials from various recycling centers. The CRV reimbursement claims and the weight tickets to support these claims were thoroughly investigated. In May 2016, a Notice of Suspension was issued to RSA. The investigation uncovered an organized effort to submit claims to the CRV based on fraudulent weight tickets from 2012 to 2015. The claims had totaled more than $80.3 million.

The five suspects-RSA owner Shengchien Tseng, 49, of Cupertino; weighmaster Maximina Perez, 50, of San Leandro; assistant weighmaster Alejandra Lazaro Martinez, 26, of Hayward; assistant weighmaster Veronica Castillo, 35, of Sacramento; and assistant weighmaster Marlene Davalos-Mendez, 28, of Rocklin, have already been booked into Sacramento County Jail.

The next hearing is scheduled for June 5, 2018.