The Los Angeles Criminal Law Blog

Recycling Fraud Costs California Millions - It's All Seinfeld's Fault

Recycling fraud: what is it? Why read an explanation when you could have Seinfeld’s Cosmo and Kramer explain the process?

If Seinfeld isn’t your thing, here’s the quick and dirty summary. California charges $0.05 per can or bottle purchased. That deposit is returned when the bottle is recycled. Arizona and Nevada do not have these types of deposit programs. The common sense scheme is obvious, right?

Obviously, in order for the excursion to be profitable, you'd have to move a lot of cans. Lots of cans mean millions in deposits. The extent of the fraud is obvious to the state: 104% of plastic bottles sold were returned last year, reports the Los Angeles Times, and 8.3 billion out of 8.5 billion recyclable cans were "returned".

What is not obvious is whether and how to fight the fraud. Stopping the recycling rouges is made difficult by one simple fact: transporting cans and bottles across state lines is not illegal. Turning them in for nickels is illegal. So, the investigators have to follow the trucks, wait for them to divide the loads into smaller, less suspicious bundles, and then arrest them at the recycling center. That's a lot of labor for a bundle of nickels. Still, the extent of the fraud is estimated anywhere between $40 million and $200 million per year.

The punishment for those who are caught also makes the risk seem worthwhile. Defrauding another person (or the state) of money amounts to theft in California. Grand theft is any theft over $950. However, depending on the defendant's criminal record and other sentencing factors, he might only get less than a year in jail. Even if the crime is charged as a felony, the maximum sentence is three years.

Considering most offenders do not receive the maximum sentence, plus they receive credits for good behavior, most won't even serve the maximum of three years. Is the risk of a year or two in prison worth millions in bottle deposits? Is it worth it for the state to surveil every suspicious truck?

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