4 recycling centers shut down due to fraud investigation

The four recycling centers in Oildale that were voluntarily shut down by the owner are connected to a state-wide investigation into recycling fraud.

23ABC obtained a search warrant from the Department of Justice outlining the probable cause for the investigation and arrest of the suspects involved.

State officers said they served search warrants for S&S Recycling in Oildale, Gonzalez Recycling in Taft and Sequoia Resources in east Bakersfield. Between those companies, there are four total locations that were shut down.

READ | SEARCH WARRANT FOR RECYCLING CENTERS

Officers said they believe those companies engaged in a scheme to defraud the CRV program by redeeming used beverage containers for California redemption value at Sequoia resources causing fraudulent claims to be sent to the state of California.

Special agents from the California Department of Justice learned that several Bakersfield individuals were actively trying to collect CRV on non-eligible bottles and cans from out-of-state, according to the warrant.

California Redemption Value is a deposit paid on sales of certain recyclable beverage containers in California. The bottler pays CRV on the purchase of beverages with aluminum, plastic and glass containers. Anyone can receive the same amount in exchange for the container by bringing it to a recycling center. The symbol on beverage containers eligible for reimbursement is "CA CRV". Currently, CRV is 5 cents for containers less than 24 ounces and 10 cents for containers 24 ounces or larger. 

In April, agents with  the Department of Justice followed a semi truck leaving Arizona transporting used beverage containers to Bakersfield. 

Once in Bakersfield, the semi truck stopped at a dirt lot off of Panama Lane, according to the affidavit. Agents said they saw several individuals unload  large plastic bags into a U-Haul rental truck.

The U-Haul truck then transported the material to Sequoia Resources, the court order showed. 

The U-Haul then drove back to Panama Lane to get another load and then transported that load back again to Sequoia resources, according to the report.

Officers said that they talked to the manager at Sequoia resources who told them that the delivery belong to S & S Recycling.

The driver of the U-Haul was placed under arrest for conspiracy, grand theft and recycling fraud.

Officers then made contact with the individuals unloading the semi truck. 

Those workers told officers that they worked for James Gonzales and Gonzalo Rodriguez of Gonzalez Recycling and admitted to knowing that the recyclable material originated from either Nevada or Arizona and both of those states do not have a CRV program, according to the report. 

The workers also told agents that the work had slowed down a bit recently, that they went from unloading two 53 foot semi trailers a day down to one, according to the report. 

According to the workers, Gonzalez was aware they were being watched by agents and were encouraged to do counter surveillance by making unnecessary turns while transporting the loads to see if they were being followed, according to the report. 

The workers also told agents there was an insider at Sequoia Resources known as "Three Stacks" would facilitate the illegal deliveries, according to the report. 

Through previous investigations conducted by the Department of Justice, it is been determined that a 52 foot semi-truck can transport between 5,000 to 8,000 pounds of aluminum cans with a value of $10,000-$16,000 per delivery.

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