California Attorney General Edmund Brown Jr. has filed criminal charges against the owner and two managers of a San Jose electronic waste recycling firm, accusing them of submitting US$1 million in fraudulent reimbursement claims for more than 2 million pounds of waste they never recycled.
Two managers at Tung Tai Group were arrested last week, Brown announced late Wednesday. They are John Chen, 38, of Hillsborough, California, and Jason Huang, 65, of Foster City, California. They both posted bail, set at $1 million for each, Brown said in a news release.
Company owner Joseph Chen, 69, of Hillsborough, is in China, and Brown’s office is making arrangements for him to return to the U.S. to face the charges, the release said.
“Tung Tai Group attempted to collect $1 million in fraudulent and fictitious state reimbursements for millions of pounds of electronic waste that didn’t exist,” Brown said in a statement. “This brazen scheme is a violation of state law and the public trust.”
Tung Tai Group did not immediately return a message seeking comment on the charges.
The three men face 17 criminal counts for submitting false documents, attempting to defraud the state, forgery and hazardous waste storage and handling violations. If convicted, the defendants face a maximum of nine years in prison.
E-waste recyclers in California break down television sets, computer monitors, laptops and other waste collected from businesses and households in California. Recyclers submit claims for reimbursement to the state Department of Resources Recycling and Recovery (CalRecycle). On average, CalRecycle pays $0.43 per pound of material recycled.
In late 2008, CalRecycle auditors contacted investigators at the California Department of Toxic Substances Control after noticing discrepancies in the claims submitted by Tung Tai and the records kept by Golden State Records and Recycling, a company that collected and transferred materials to Tung Tai, Brown said in the release.
In July 2009, state agents searched the Tung Tai facility and discovered two separate sets of records, Brown said. Those records showed that Tung Tai had significantly inflated the pounds of recycled material it submitted for reimbursement to CalRecycle between January and September 2008, Brown’s office said.
For example, one set of records showed that a collector delivered 62,000 pounds of material to Tung Tai, but forms submitted to CalRecycle for reimbursement listed nearly 555,000 pounds. That change increased Tung Tai’s requested reimbursement from the state by more than $235,000, Brown’s office said.
Tung Tai also submitted records to CalRecycle listing items that were never delivered to the company by any approved collector of electronic waste, Brown said.
The state did not make payments on inflated requests for reimbursement, which totaled $1 million, Brown said.
John Chen and Huang are scheduled to be arraigned in Santa Clara Superior Court on Sept. 9.
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantusG. Grant’s e-mail address is email@example.com.