$6-Million Recycling Fraud Case Revealed

The owner of Alameda Metal Recycling in Los Angeles and three workers have been charged with defrauding the state out of $6 million with illegally claimed recyclables, the California attorney general’s office said Wednesday.

Arrest warrants charged plant owner D. Robert Schwartz and the employees with four felony counts of grand theft, recycling fraud and conspiracy in an alleged scheme in which “staggering amounts” of cans and bottles were either counted twice or were redeemed illegally because they were trucked in from outside of California, said attorney general spokeswoman Teresa Schilling.

Schwartz and one of the workers, Jose DeLuna, remain fugitives, she said.

On Monday, authorities arrested DeLuna’s son, Jose F. “Freddie” DeLuna, 23, of Desert Hot Springs, and Santos Saenz, 38, of Los Angeles.

Schilling said Saenz was taken to Los Angeles County Jail, and DeLuna to the Riverside County Jail in Indio.

Agents from the state Department of Justice, the police arm of the attorney general’s office, and the state Department of Conservation launched the investigation into Alameda Metal Recycling in 2004.

In addition to the arrests, authorities seized numerous semi-trucks, trailers, two handguns and $50,000 cash from different locations, Schilling said.

“These guys made so much money off of scamming the system” that bail for the younger DeLuna and Saenz was set at $5 million each, Schilling said, “because we were afraid they would flee.”

The Department of Conservation administers the state’s cash-for-recyclables program, through which 65% of the 20 billion containers purchased yearly are redeemed, spokesman Mark Oldfield said.

The volume of recycling by the suspects drew the attention of inspectors because it was so large for the size of the business’ property, Oldfield said.

The $6-million sum is the largest in any such case prosecuted to date, he said.