2 Indicted in Hauling of Toxic Waste to Mexico : Environment: Charges are the first under a federal law involving smuggling of hazardous material.

Federal, state and Los Angeles County law enforcement officials announced Thursday the first federal felony indictment under an environmental law in a case involving the smuggling of toxic wastes from California into Mexico.

Citing growing trafficking of hazardous garbage from California across the border, the officials also announced the creation of a new multi-agency task force intended to remove jurisdictional problems that have hampered such smuggling investigations in the past.

“There are a lot of types of crime that have gone global--white collar crime, terrorism and drugs, just to name a few,” said William Stollhans, assistant special agent in charge of enforcing environmental laws for the FBI. “The indictment today is an example of where environmental crimes have now gone international. They know no international boundaries.”

The indictment charges that Raymond Franco, 57, a licensed waste hauler from El Toro, accepted money from California businesses to take their wastes to legal landfills or recycling facilities. But instead of going to the designated sites, the indictment says, Franco and an accomplice, David Torres, 39, of Huntington Park, loaded drums of the dangerous materials into enclosed trucks destined for Mexico, concealing the barrels under cardboard and wood and surrounding them with empty drums.

Much of the dangerous material allegedly was dumped at a Tijuana warehouse owned by Torres, and investigators fear some of the barrels later may have been used by nearby residents to store water. Prosecutors said the government of Mexico cooperated fully in the inquiry.

Among the firms whose waste ended up in Tijuana was Barmet Aluminum Corp. of Torrance, which paid Franco a total of $12,000 in 1988 to haul 57 drums of hazardous material to a treatment facility and a licensed hazardous-waste landfill, according to the indictment.

Had the material actually gone to a legal landfill, the cost would have approached $28,000, more than twice as much as the firm paid Franco, investigators said. The division manager of the Torrance facility, which was not charged, said the company trusted Franco to dispose of the material lawfully.

On Wednesday, The Times reported that increasingly strict environmental laws and the escalating costs of legal disposal are prodding more and more hazardous waste generators in Southern California to send their toxic garbage illegally into Mexico, where it is dumped or used in industrial processing.

The indictment announced Thursday marked the first time transporters of hazardous waste have been charged with illegal smuggling under the U.S. Resource and Conservation Recovery Act, which prohibits, among other things, disposing of hazardous waste without a permit.

In a similar case in 1986, three Americans were indicted by a federal grand jury in San Diego for falsifying shipping documents. That case was filed under federal mail fraud statutes.

“This is the first time that California law enforcement officers have in fact witnessed the unlawful smuggling of toxic waste into Mexico and have documented it,” said William Carter, a Los Angeles County deputy district attorney who helped investigate the case. “This is just one set of players out of dozens who are out there operating in similar fashion. We just have to take them one set at a time.”

In a separate case stemming from the Franco investigation, the federal grand jury also indicted Laminating Co. of America, a Garden Grove firm, accusing it of conspiracy to dispose of and transport hazardous waste and 46 counts of illegal transportation and disposal of toxic waste--all within Orange County.

Rex Scatena, an attorney for Laminating, said the company is “an old, family-run business.” He said he had not yet seen the indictment, but he defended the firm.

“They have all the necessary permits to dispose of and handle the materials they use there,” Scatena said.

Franco, who authorities said disappeared from his Orange County home a year ago, was arrested in New York on Wednesday. He was arraigned before a federal magistrate in Brooklyn on Thursday and was held pending a bail hearing today. Authorities said they were planning to summon Torres to appear before a federal magistrate in Los Angeles. Torres is believed to be cooperating with investigators.

Franco and Torres could not be reached for comment, but a woman who identified herself as Franco’s wife said her husband is innocent.

Reached by telephone at the couple’s El Toro home, the sobbing woman said, “He did nothing wrong. . . . He is a good person.”

Franco was charged with one count of conspiracy, seven counts of illegal transportation and disposal of hazardous waste and one count of illegal export of hazardous waste to Mexico. Torres was charged with one count of conspiracy, six counts of illegal transportation and disposal of hazardous waste and one count of illegal export of hazardous waste to Mexico.

If convicted, Franco faces a maximum sentence of 32 years in prison and a fine of $250,000 on each count. Torres faces a maximum of 27 years in custody, and a fine of $250,000 for each count.

Investigators said they placed Franco under surveillance in 1988 after he was identified as a possible suspect during routine monitoring by county health department officials of local waste generating companies.

While under surveillance in October, 1988, Franco and Torres met at Laminating Co. of America in Garden Grove and loaded 16 drums of hazardous waste onto two trucks. Torres headed north in his truck but investigators lost track of him before he made any stops.

The other truck, driven by a Mexican national, headed to the border, investigators said. The CHP stopped the vehicle before it reached the border and the driver was arrested and subsequently prosecuted by Orange County authorities for illegally transporting hazardous waste, according to Los Angeles County investigators. The man served jail time and eventually returned to Mexico.

As undercover investigators continued to watch Franco, prosecutors said, they saw repeated illegal activities at Laminating Co. According to the indictment, the firm’s employees were seen on several occasions illegally disposing of hazardous wastes in trash bins destined for a municipal landfill in the city of Orange. Franco also was seen dumping hazardous materials into an ordinary trash bin.

The waste, eventually picked up by the municipal garbage company and taken to Santiago Landfill, should have been put into special containers and taken to a licensed hazardous waste facility.

In the meantime, Barmet Aluminum Corp. notified the U.S. Environmental Protection Agency that hazardous waste facilities where Franco and Torres were supposed to have taken Barmet’s materials had not, in fact, received them. The corporation, based in Ohio, has aluminum recycling plants across the nation.

“The guy (Franco) did something wrong,” said Jorge Eulloqui, division manager of the corporation’s Torrance facility. “We trusted him, we hired him under good conscience and he defrauded our company.”

Eulloqui, who said his plant budgets about $50,000 a year for the treatment, recycling and disposal of hazardous waste, said the company employee who contracted with Franco is no longer with the firm. Eulloqui said he does not believe that the former employee suspected anything was amiss even though the fees paid to Franco were unusually low for legal disposal.

Los Angeles County and federal prosecutors, who announced the filing of the indictments at a news conference in Los Angeles, said they hope they will deter illegal dumping in the future.

“Companies realize it’s cheaper to pollute than to dispose of hazardous material properly,” said Assistant U.S. Atty. Adam B. Schiff, who is helping to prosecute the cases. “We hope the announcement of the indictments and the task force will impress individuals that the calculus is changing dramatically, that the costs are going up dramatically.”

The new environmental task force will include representatives of the FBI, the EPA, the U.S. Department of Transportation, the California Highway Patrol and the California Department of Health Services.

Officials said halting waste trafficking into Mexico will be a top priority of the task force, which will have jurisdiction over much of Southern California. Previously, law enforcement investigators told The Times that little was being done to stop toxic waste smugglers because of jurisdictional problems and lack of adequate staffing. Officials from the various agencies pledged Thursday to provide enough resources to give the task force muscle.

“We have to be as diligent at the border in stopping those poisons that are going south as we are in trying to stop the drugs that are coming north,” said Los Angeles County Dist. Atty. Ira Reiner. “In both cases, it comes back to haunt us.”

Reiner said crops imported from Mexico may be contaminated by toxic ground water and poisons that have been dumped in Mexican rivers.

State officials also have worried that toxic waste dumped by Americans in Mexico is contributing to contamination in California. An internal state government memo obtained Thursday by The Times warned a year ago that the illegal disposal of hazardous waste in Mexico posed ground water contamination and air pollution threats not only to Mexico, but also to the United States.

The May 30, 1989, memo to state Health Director Kenneth W. Kizer said the potential for environmental problems “appears to be extreme,” both from the illicit trafficking of hazardous waste into Mexico, and from waste generated in Mexico by American-owned factories along the border.

Times staff writer Catherine Gewertz in Orange County contributed to this story.