Two Arizona business owners were arrested Wednesday for allegedly taking part in a multimillion-dollar fraud scheme in which nine tons of empty, out-of-state beverage containers were trucked into California and taken to recycling centers in exchange for cash under the California Redemption program.
Jorge E. Olmos and Juan Gonzalez-Espinosa, who were taken into custody in the Phoenix area, are among eight defendants named in a criminal complaint in Los Angeles Superior Court. All are charged with conspiracy to commit grand theft and recycling fraud.
According to the state Attorney General’s Office, the alleged scheme began in 2021, with the defendants importing aluminum cans and plastic bottles from Arizona by the truckload to California recycling centers. Under the California Redemption program, cans and bottles can be redeemed at recycling centers for 5 or 10 cents, depending on their size. The money is a refund of a deposit that is added to the purchase price of the product in the containers at California retailers, and thus, out-of-state containers are ineligible for the refunds.
State prosecutors said the defendants’ redemption of out-of-state containers bilked the state CRV fund out of more than $10 million.
“No matter where you are, we will hold you accountable if you defraud our state,” Attorney General Rob Bonta said in a statement. “The California Redemption program is an important tool in our efforts to encourage recycling, reduce waste, and address climate change. We will continue to work with our law enforcement and state partners to protect California’s programs and resources.”