An Encino man pleaded guilty to running a recycling scheme straight out of a “Seinfeld” episode – one that bilked California out of $2.5 million, authorities said Wednesday.
Errol Segal, 61, president of Active Recycling, trucked more than 50 million cans and bottles into California from neighboring states and Mexico, then falsified records to bill the state for the California Redemption Value. The company also billed the state for more than 10 million bogus bottles.
“This is the largest (recycling scheme) my office has done in a long, long time, if ever,” Assistant U.S. Attorney Scott Garringer said. “We’re talking scores, if not hundreds, of loads.”
The scheme is reminiscent of a “Seinfeld” episode in which Kramer and Newman try to bring a truckload of cans from New York, which has a 5-cent redemption value, to Michigan, which offers 10 cents.
The plan goes awry when Kramer and Newman spot Jerry’s stolen car on the freeway in Ohio. Instead of going to Michigan, Kramer decides to pursue the car.
“We’ve all seen that `Seinfeld,”‘ Garringer said. “I can just picture Kramer in the back of the truck, throwing out bags of cans to lighten the load.”
In California, the redemption value is much less than Michigan – 2 cents to 4 cents per can or bottle, depending on weight. Consumers are charged the fee when they buy the can, then bring the can to a privately owned recycling center. The center then bills the state for each can.
Segal pleaded guilty Tuesday to mail fraud, conspiring to process ineligible cans and bottles and falsifying paperwork. He faces a maximum of 20 years in federal prison and is scheduled to be sentenced July 19.
Seven of Segal’s co-conspirators, five from the San Fernando Valley, also pleaded guilty to participating in the scam, as did two recycling companies – Active Recycling and World Wide Recycling. The companies could face $1 million fines.
Josh Kleinbaum, (818) 713-3669
