Attorney General Bonta Holds Recycling Fraud Suspects Accountable, Five Managers Ordered to Pay a Total of $140.5 Million in Restitution and Fines

SACRAMENTO – California Attorney General Rob Bonta, along with CalRecycle Director Rachel Machi Wagoner, today announced that five managers of Recycling Services Alliance, Inc. (RSA), who together carried out a recycling fraud scheme in Sacramento County, have been ordered to pay a total of $140.5 million total criminal restitution and administrative fines for the purpose of replenishing the money stolen from the California Refund Value (CRV) Fund. In 2015, the California Department of Justice (DOJ), Division of Law Enforcement (DLE), Bureau of Investigation (BI), Recycle Fraud Team (RFT) initiated an investigation into RSA, and RFT and was able to prove RSA manipulated the scales at their recycling facilities and created fabricated weight tickets for CRV claims for almost four years.

"California's recycling program is funded by consumers, and helps protect our environment and our communities," said Attorney General Rob Bonta. "Those who try to undermine its integrity through criminal operations will be held accountable. I am grateful to my team of diligent investigators, and to our partners at CalRecycle, for uncovering this fraud scheme and for working together to protect funds that belong to California consumers who recycle." 

RFT’s case was presented to a grand jury in Sacramento County and indictments were issued for RSA and its operations managers; Shengchien Tseng, Maxamina Perez, Marlene Davalos-Mendez, Estella Veronica Castillo, and Alexandra Martinez. They were originally given criminal restitution ordered in the amount of $53.9 million. In addition to the criminal penalties, RSA and the defendants were ordered to pay an additional $86.6 million for administrative violations. In February 2024, a final $34 million administrative judgment was levied against RSA bringing the total criminal restitution and administrative fines to $140.5 million for the purpose of replenishing the money stolen from the CRV Fund.

The California Beverage Container Recycling Program is administered by CalRecycle. The program's California Redemption Value (CRV) fee incentivizes recycling at privately-owned centers with a 5- or 10-cent return on eligible beverage containers. California consumers subsidize the CRV program every time they purchase CRV-eligible bottles and cans in the state. Only material from California is eligible for redemption under this program.

The objective of the Recycle Fraud Program is to detect and stop existing fraud by organized criminal groups against the CRV fund and to deter future fraud through the successful prosecution of criminal activity. The RFT works throughout California and in neighboring states to investigate organizations that commit large scale fraud against California’s extremely important recycling program. Together with CalRecycle, the DOJ’s RFT have been responsible for the arrest and prosecution of individuals committing fraud against the CRV fund and for the seizure of tons of material that was destined to be illegally redeemed for payment by the State of California. 

A copy of the final agency decision by CalRecycle can be found here.

A copy of the Grand Jury Indictment can be found here.