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SACRAMENTO – Two men
have been arrested by the Department of
Justice in Southern California for
alleged recycling fraud involving $6
million worth of ineligible bottles and
cans. Two other suspects in the case
remain at large.
“Recycling is
important for California because it
saves energy, provides valuable raw
materials and conserves natural
resources,” said Department of
Conservation Director Bridgett Luther.
“We take recycling fraud very seriously,
and applaud the efforts of law
enforcement officials to make sure those
who cheat the system face the
consequences of their actions.”
Santos Saenz, 38, and
Jose F. “Freddie” De Luna, 23, are being
held on charges of recycling fraud,
grand theft, and filing false or forged
documents involving the state’s beverage
container recycling program,
administered by the California
Department of Conservation. The DOC
assisted in building the case for the
charges and arrests, which were carried
out by the Environmental Crimes Unit of
the DOJ California Bureau of
Investigation.
The arrests culminate
an investigation that began in 2002. The
scheme involved Alameda Metal Recycling,
a Los Angeles-based recycling center
owned by D. Robert Schwartz and run by
Saenz and associates Jose F. De Luna and
his father, Jose De Luna. The alleged
fraud was accomplished in two ways:
First, ineligible containers transported
from outside California were brought to
Alameda Metal Recycling and then
transferred to Bestway Recycling, a
certified processor, for payment of
California Redemption Value (CRV).
Second, previously redeemed or
"canceled" material was brought to
Alameda Metal Recycling and was
immediately transferred to Bestway for a
second, illegal CRV reimbursement.
“These con artists
stole millions of dollars from
California's recycling program, which is
nationally renowned for its success in
getting consumers to recycle more
bottles and cans," said Attorney General
Bill Lockyer. "This kind of fraud
endangers the program's great success,
and I will prosecute lawbreakers to the
fullest extent.”
Saenz, 38, was
arrested and is being held at the Los
Angeles County Jail on a $5 million
bail. Jose F. (“Freddie”) De Luna, 23,
was arrested in Desert Hot Springs and
is being held at the Riverside County
Jail in Indio on $5 million bail. His
father, Jose De Luna, and Schwartz both
remain fugitives from justice. They were
charged with four felony counts of grand
theft, recycling fraud and conspiracy.
Agents also seized more than $50,000 in
cash, two handguns, numerous
semi-trucks, trailers and personal
vehicles.
Saenz previously
owned a recycling center that was
decertified by the DOC in 2003 for
noncompliance with regulations. The
younger De Luna is currently on felony
probation for recycling fraud
convictions in 2002.
California consumers
pay 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 they pay and reclaim CRV only for
eligible bottles and cans that were sold
in California.
The DOC provides
funding for the CBI Environmental Crimes
Unit enforcement efforts. DOC auditors
and enforcement staff also supply
important technical assistance to law
enforcement organizations in recycling
fraud cases. The recycling act provides
both civil and criminal violations.
This is the fourth
major recycling fraud enforcement action
conducted by the DOJ Environmental
Crimes Unit. Other participants in the
investigation included additional DOJ
units, the Los Angeles County Sheriff’s
Department, the Hawthorne Police
Department, and the Department of
Homeland Security, Immigration and
Customs Enforcement.
For additional information on
California’s beverage container
recycling program, contact Mark Oldfield,
Department of Conservation at (916)
445-0608. For additional information on
the individuals charged in this case,
contact Teresa Schilling, California
Department of Justice at (916) 324-5500.
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