NEW YORK California scrap
metals recycler Tung Tai Group Inc. and two of its managers
have accepted a plea agreement on charges that they
fraudulently sought reimbursement from the states
Electronic Waste Recovery and Recycling Program.
The San Jose-based company,
executive vice president John Chen and yard supervisor Jason
Huang pleaded no contest in Santa Clara County Superior Court
last month, according to the Department of Toxic Substances
Control (DTSC), the Department of Resources Recycling and
Recovery (CalRecycle) and the California Attorney General.
As part of the plea agreement,
Tung Tai, Chen and Huang must withdraw as certified recyclers
and approved collectors in the program, and must stop
shredding, dismantling or processing electronic scrap. The
defendants must also pay $75,000 in penalties to the court and
$50,000 to the California Attorney Generals Office, which
prosecuted the case.
"While there have been several
administrative actions taken for noncompliance with the
recycling payment system and hazardous waste rules, this is the
first criminal prosecution in California," the agencies
However, Chen told AMM
that he still believes the company would have been exonerated
if the case had gone to trial.
"As in many plea bargains, we
weighed the high costs of trial and the uncertainty and time
spent for a trial, and came up with what we feel is a
settlement (in) which we can continue business as usual," he
Chen claimed that his company
was actually the victim of an "unscrupulous supplier," and that
their legal defense would have contained evidence proving
"We intend to take legal action
against these persons and would be interested in working with
the DTSC and the Attorney General to provide evidence we have
gathered and clear our name," he said.
The defendants were accused of
attempting to collect more than $1 million from the program for
electronic waste that the company never collected or recycled.
The alleged fraud was uncovered by the DTSCs Office of
Criminal Investigations following a tip from CalRecycle staff,
which review electronic waste payment claims for discrepancies
(amm.com, Aug. 30, 2010).
CalRecycle pays a rebate of 39
cents per pound to recyclers for material recycled from
"This case demonstrates that
those who make false claims for payment from CalRecycle will
not only have their claims denied, but face the prospect of
severe consequences resulting from criminal prosecution,"
CalRecycle director Caroll Mortensen said.