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NR 2003-03
February 14, 2003

Contact: Ed Wilson
Mark Oldfield
Don Drysdale
(916) 323-1886

FOUR-YEAR SENTENCE FOR MAN GUILTY
OF DEFRAUDING STATE RECYCLING PROGRAM
Ten-month Investigation Led to Breakup of Fraud Ring

SACRAMENTO -- A Glendale man thought to be a ringleader in the largest fraud case of its kind in California history was sentenced today to four years in prison for defrauding the state’s Beverage Container Recycling Program of more than $2.5 million.

Migran Changulyan, 35, was arrested along with 17 others on Oct. 17 and charged with conspiracy, grand theft, perjury, recycling fraud, and welfare fraud. He pleaded guilty to grand theft and recycling fraud, and agreed to the four-year term that was handed down today in Los Angeles Superior Court.

“This should serve as a wakeup call to those engaged in recycling fraud that they will be held accountable for their actions,” said Darryl Young, director of the California Department of Conservation, which oversees the Beverage Container Recycling Program. “Along with our law enforcement partners, we will continue to pursue and bring to justice individuals who take advantage of a system meant to help the environment and conserve natural resources.”

Officers and investigators from the Department of Justice, along with the California Department of Conservation, Los Angeles Interagency Metropolitan Police Apprehension Crime Task Force (LA-IMPACT), the Los Angeles District Attorney's Office, the California Department of Motor Vehicles, the Los Angeles Sheriff's Department, the California Department of Insurance, the California Department of Corrections, the United States Secret Service, and the United States Immigration and Naturalization Service, assisted with the 10-month investigation that culminated in the arrest of Changulyan and the others.

California consumers pay a fee, the California Refund Value (CRV), for every beverage container purchased in the state. This money is refunded to the consumer when containers are redeemed at a recycling center certified by the Department of Conservation. Recycling centers then reclaim the CRV payments from the DOC. It is the responsibility of each Certified Recycling Center to ensure that it pays and reclaims CRV only for eligible bottles and cans that were sold in California. Recycling centers may purchase non-CRV bottles and cans for their scrap value, but may not claim CRV reimbursement from the Department of Conservation on those containers, since no CRV was paid on them in the first place.

The Department of Conservation provides funding to the California Department of Justice to pursue criminal cases of recycling fraud. DOC auditors and enforcement staff supply important technical assistance to law enforcement organizations in building criminal cases related to recycling fraud. The recycling act includes both civil and criminal violations, and the DOC discovered the underlying activities and brought in the criminal investigators and prosecutors to pursue criminal actions in this case.

Primarily dealing with aluminum and plastic materials, the organization targeted in these arrests brought into California ineligible containers from Arizona, Nevada, Oregon, Utah and Mexico, and also purchased already redeemed (scrap) material and resubmitted it for CRV. Some of the individuals arrested are recycling center operators who are charged with knowingly claiming reimbursement from the state for ineligible containers.

For additional information on California’s recycling programs, contact Mark Oldfield, Department of Conservation at (916) 323-1886. For additional information on the other individuals charged in this case, contact Diana Callaghan, Los Angeles Deputy District Attorney, at (213) 580-3396.

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