California recycling company ordered to pay $140M for bottle bill fraud

Recycling Services Alliance Inc. (RSA), Sacramento, California, and its operations manager have been ordered to pay $140.5 million in total restitution and penalties for defrauding California’s Beverage Container Recycling and Little Reduction Act.

The final agency decision by the California Department of Resources Recycling and Recovery (CalRecycle) requires RSA to pay $86.6 million in restitution and interest for illegally filing claims for California Refund Value (CRV) on bottles and cans with fabricated weight tickets. The decision is in addition to prior criminal judgments of $53.9 million against RSA and its operations manager. 

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“This decision sends a message that criminals are held accountable for defrauding California’s Beverage Container Recycling Program, which has kept 491 billion bottles and cans out of our streets and waterways,” CalRecycle Director Rachel Machi Wagoner says.

In 2015, CalRecycle notified the California Department of Justice (CDOJ) that the Sacramento RSA facility could be redeeming out-of-state beverage containers illegally. As CDOJ pursued its criminal inquiry, CalRecycle completed an RSA claims analysis, suspending the recycler’s certification to do business.  

CalRecycle investigators worked with CDOJ, the California Department of Food and Agriculture’s Division of Measurement Standards and the Sacramento County Agricultural Commissioner’s Weights and Measures Division to explore how RSA fabricated weight tickets for CRV claims.   

After a grand jury indictment in 2017, RSA and its operations manager were convicted of recycling fraud and ordered to pay $53.9 million in damages.

California’s Beverage Container Recycling and Little Reduction Act has recycled more than 491 billion bottles and cans since its inception in 1986. The bill incentivizes Californians to recycle by refunding a fee paid at purchase when beverage containers are returned to recycling centers or certain retailers.

CalRecycle has made 377 arrests related to the state’s bottle bill since 2010.