Recycler Will Plead Guilty to Fraud in Redemption Scam : Crime: Owner of Compton business faces 25 years in prison, $1.75 million in fines and a civil lawsuit after illegally obtaining refunds on cans and bottles.

One of the state’s largest beverage container recyclers has agreed to plead guilty to federal charges that he defrauded the state by obtaining refunds for phantom and out-of-state bottles and cans, U.S. Atty. George L. O’Connell announced Friday.

A federal grand jury indicted Norman L. Rockmaker and his company, Rockmaker Scrap Metal Corp. of Compton, on mail fraud and money laundering charges.

Rockmaker, who will become the second major California recycler to plead guilty to federal criminal charges, faces up to 25 years in prison and fines totaling $1.75 million.

In addition, the state Department of Conservation, which operates the recycling program, filed a civil lawsuit under the federal racketeering statute, seeking to recover $2.5 million from Rockmaker, his firm and company Vice President Diane Whearty.

O’Connell said Rockmaker’s company, which is also known as Compton Redemption Center, fraudulently recovered about $850,000 from the recycling fund over a three-year period. The amount represents a 2.5-cent per-container refund on 34 million cans.

“In truth, many of those cans didn’t exist at all,” O’Connell said. “Some of them had been recycled two, three, four times.” He said some were hauled from other states or from Mexico and were not eligible for the state’s $300-million recycling fund.

Both O’Connell and state conservation director Ed Heidig said they are continuing their investigation into alleged fraud among recyclers.

Heidig said that “the bad actors in the recycling industry” should get the message “that if you steal from this recycling fund and from the people of California, we will find you and we will recover the money.”

Under California’s complex beverage recycling system, distributors pay 2.5 cents per container into the state recycling fund, passing the cost along to retail customers. The customers can recover the money from recycling centers, which are repaid from the state fund.

O’Connell said that because the cans and bottles are crushed and recycled, the state depends on paperwork--and the honesty of recyclers and processors--to ensure proper payment.

The grand jury indictment charges that Rockmaker knowingly submitted fictitious documents to obtain refunds to which the company was not entitled.

Rockmaker could not be reached for comment Friday.

He is expected to enter his guilty plea in the next two weeks.

A year ago, similar charges were filed against the state’s largest recycler at the time, State Salvage Co. of Long Beach, and its general manager, Larry Lewinson.

The company agreed to a $1.8-million fine, and Lewinson was sentenced to four months in prison and four months in a halfway house. However, federal prosecutors wanted a longer sentence and filed an appeal.