Stanislaus County residents arrested in recycling fraud scheme

Agents with the state Department of Justice’s Sacramento Recycle Fraud Team arrested five Stanislaus County resident believed to have been illegally claiming California Redemption Value refunds on beverage containers that had already been redeemed.

Hughson residents Michael Marchant and Leila Arretche; Jonathan Andrino, of Turlock; and recycling center owners Robert Nicastro and James Reese, both of Turlock, were arrested on suspicion of conspiracy, grand theft, and recycling fraud, according to a press release from CalRecycle.

A sixth person, Joshua Gray, is suspected of working with Andrino and is being sought by authorities.

After serving search warrants at 12 locations in late September and early October, the fraud team seized records and $125,000 in cash. As a result, six recycling centers were placed on “prepayment controls” by CalRecycle, which means they are not reimbursed for CRV claims until each claim and its supporting documentation have been reviewed and determined to be legitimate.

During a two-day effort nearly 250,000 pounds -- 22 truckloads -- of beverage containers were removed from a ranch and warehouse and sent to a processing facility.

Arretche and Marchant pleaded no contest to a felony charge of recycling fraud and have agreed to pay restitution in the amounts of $4,990 and $370,492, respectively. They will each serve 120 days jail and three years of probation.

If convicted, the others face a maximum of six years and four months in county jail and a $25,000 fine, in addition to restitution costs.

California’s bottle bill provides an incentive for beverage container recycling by establishing a CRV of 5 cents for containers less than 24 ounces and 10 cents for containers 24 ounces or larger.

CalRecycle is undertaking a major effort to protect the recycling fund, including new approaches to curb fraud. Much of the emphasis is on preventing fraud before it occurs, such as enhanced training of recycling center owners and increased scrutiny of payment claims.

This story was originally published October 29, 2014 at 4:17 PM with the headline "Stanislaus County residents arrested in recycling fraud scheme."