Cautious collectors

Karul’s yards primarily purchase end-of-life vehicles from other companies and the public, extracting catalytic converters during the dismantling process before sending the auto bodies to a shredder. Before that work takes place, proper documentation is required.

“We buy the car, which includes the paperwork and registration, and then we run that through the DMV [Department of Motor Vehicles],” he says. “When the car is cleared and all the paperwork is intact, we process the car.”

As a precious metals recycler specializing in platinum, palladium, rhodium and iridium from auto and industrial catalysts, spark plugs and electric or hybrid vehicle batteries, Accurate Converter also focuses on business-to-business transactions, says George Lucas, CEO of the Stoughton, Massachusetts-based company. Accurate has six locations across the U.S. and handles around 1 million converters per year.

Before accepting converters from a prospective customer, Accurate issues that customer a compliance packet requesting documentation including ownership details, licenses, business registrations and more. Last year, the company hired a chief compliance officer, Alysha Miller, to dive more deeply into its suppliers.

“Once we get the completed compliance packet back, it goes to [Miller], our in-house counsel,” Lucas says. “She does background checks on the owners and the company, making sure there [are] no red flags.”

Once Miller approves a customer, the information goes to Accurate’s chief financial officer for review. Lucas also conducts a review and gives final approval, completing the three-stage process before doing business with a customer, which has to pass a rigorous corporate and personal background check and have all business licenses in place and current.

Going a step further, Accurate does not pay its customers in cash to aid in the traceability of its transactions.

Lucas says the company typically works with automotive salvage, recycling and scrap metal companies, as well as muffler shops, service stations and dealerships.

“The bottom line is you have to look at something and say, ‘Does this entity have a reasonable expectation to have catalytic converters for recycling?’” Lucas says. “If it’s a paint shop and it has 20 catalytic converters for recycling, you have to look at that and say, ‘Something doesn’t add up.’ There’s no expectation of them having catalytic converters for sale. So, a total picture like that is what we want.”

With two locations in Quebec and another in Las Vegas, PMR can recycle 50,000 to 60,000 converters per week and typically buys them from dismantlers and scrap yards. Before accepting a load of converters, the company validates customers to ensure they meet anti-money laundering and know your customer guidelines and requires proof of licensing and registration from the states the customers operate in.

Sullivan says when a supplier books a sale, it’s usually done over the phone via PMR’s help desk. The supplier provides information to PMR, including the number of converters being sold.

“When we receive it, we have a BOL [bill of lading], we weigh everything in, and from there, we grade the converters,” she says. Before the recycling process begins, PMR employees conduct item counts and ensure the converters haven’t been tampered with.

Proper handling

“The best way to process the material is you just keep shipping it out,” he explains, adding that keeping valuable commodities moving also serves as a way to mitigate the possibility of internal and external theft.

Karul says all the facilities in his region have camera systems, and some locations even are staffed with armed guards.

Once converters are on-site, security becomes paramount for Accurate Converter, which equips each of its facilities with alarms and motion-detection camera systems.

Lucas says Accurate has one of the most advanced processing systems in the U.S. at its Stoughton and Phoenix locations. The company cuts incoming converters and mills the material inside to dust before sampling it at an in-house lab. Finally, that material is sent to a refining partner to complete the recycling process.

The company shares its refiners’ lab reports with customers. “We share that lab report with you so you see that everything is above board and transparent,” Lucas says. “There’s a lot of ways in this industry that you can get away with different things ... so transparency is probably the biggest thing you could do for your customers.”

When PMR receives converters for processing, surveillance cameras stationed throughout each of its facilities film the intake process.

“From the moment the truck backs up to the dock, it’s on video,” Sullivan says. “This includes unwrapping the boxes, weighing everything on the scale and then when the converters are being counted and placed into our machinery [for recycling],” she explains. “We have a bird’s eye view on everything that’s happening throughout our facility.”

Good neighbors

Sound working relationships with law enforcement can be just as important as those with customers when dealing with catalytic converters.

SA Recycling, for example, works directly with the LA Police Department, as well as other local departments in the region, Karul says.

Additionally, SA Recycling Director of Loss Prevention Roger Young is a former police officer who tours the U.S. educating law enforcement on converter theft.

“We work constantly with them,” Karul says of SA’s relationships with local law enforcement. “It’s not just the police department but any kind of government agency. We welcome that. We are really transparent. They can walk in anytime. We actually train a lot of police departments [on what to look for], and we have a good reputation.”

Lucas says Accurate also maintains consistent communication with law enforcement at its facilities and invites them in to view the operations. “We work with them on kind of a national level on theft and how to cut down on that kind of thing,” he says. “They’ve got some good ideas, and sometimes we implement what they ask us to implement, [and] sometimes we’ve had ideas of what they should be looking for.”

Lucas is part of the board of the Pensacola, Florida-based International Precious Metals Institute, which brings industry leaders together to discuss topics that include converter theft and often invites law enforcement to meetings.

Through its own thorough intake process, PMR says it can help its customers identify suspicious activity, reporting back those findings. For example, Sullivan says some suppliers will spray paint an “X” on top of a box of converters before shipping it to PMR. The company’s employees then take pictures of the loads as they come in and can tell if a box has been tampered with during transport.

It’s that combination of caution, attention to detail and collaboration that can ensure a safe and smooth process when handling catalytic converters.

The author is the associate editor of Recycling Today and can be reached at cvoloschuk@gie.net.