California's E-Waste Program Plagued by Fraud and Smuggling

Date: August 2, 2010

Source: News Room

California's groundbreaking electronics recycling (e-waste) program is plagued by fraud and smuggling from out of state. A McClatchy Newspapers investigation found that recyclers and collectors may have submitted $30 million worth of ineligible claims that were paid out by the state, in addition to $23 million in rejected claims deemed to be fraudulent to begin with. Unknown is how many ineligible claims have escaped notice. Unlike other states that have adopted e-waste programs, California's program, started in 2005, uses fees paid by consumers upon the purchase of new consumer electronics which it pays to recyclers based on the volume of material they accept. Other states make the manufacturers responsible for collecting and recycling electronics in accordance to their sales. So far some 840 million pounds of monitors and TVs, about 17 million units, have been recycled in California, far more than in any other state. Overseeing the flow are two agencies: CalRecycle, which scrutinizes claims and pays recyclers, and the Department of Toxic Substances Control, which investigates fraud and environmental violations. Investigators found that with over 500 collectors funneling e-waste to recyclers, it has been difficult to verify all the accompanying documentation, which in some cases, includes the names of dead people, celebrities, and even dead celebrities.

Problems McClatchy Newspapers found:

  • Recyclers and collectors have submitted $23 million in faulty and fraudulent e-waste claims that have been rejected by the state. But state and industry officials estimate that other ineligible claims, totaling as much as $30 million, may have inadvertently been paid.

  • More than two dozen e-waste firms have been investigated for fraud by the state Department of Toxic Substances Control over the past two years, but none has been fined or prosecuted.

  • Even though California officials know that illegal e-waste is flowing into the state and acknowledge that public funds are being wasted recycling some of it no state official has traveled out of state to investigate.

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