CDFA Border Stations Help Thwart Recycling Fraud

A commercial truck entering the Truckee station
A commercial truck entering CDFA’s Truckee border inspection station.

Under a $1.432 million interagency agreement (IAA) with CalRecycle, California Department of Food and Agriculture (CDFA) agents who review vehicles at border inspection stations have have added a non-agricultural pest to their “no entry” list:  fraudulent recyclers.  The agents are keeping track of recyclable beverage containers being brought in from out-of-state in an effort to cut down on a particularly costly form of fraud.

Why is it illegal to recycle these out-of-state containers in California? Beverage distributors pay into a fund used to reimburse consumers who redeem containers that have been purchased in California. Unscrupulous individuals defraud California taxpayers when they smuggle in and redeem comparable containers that were purchased outside California. Because no fee was paid into the California system for those containers, they don’t qualify for reimbursement. The difficulty, of course, is that the containers are virtually indistinguishable once they make it into the state and into the recycling stream. And that is where CDFA’s border agents come in.

This past summer the two agencies conducted a pilot project at all 16 of CDFA’s border inspection stations, and here’s what they found:  From June to August, 3,588 vehicles were identified as importing out-of-state beverage containers. 528 of the vehicles were rental trucks full of out-of-state beverage containers.  That was plenty of evidence to move forward with the interagency agreement, which is already inked and operative. The project is a model of efficiency and cooperation in government, and it is poised to save the state millions in the coming years.

Losing a nickel or a dime per beverage container may not seem like much, but the Department of Justice estimates that losses could be as high as $40 million annually. Perpetrators don’t just bring in bags or boxes of recyclable containers; they rent commercial-size trucks and pack them to the ceiling, among other methods.  It may seem to some like a lucrative “business opportunity,” but it’s fraud, just the same.

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