Environmental waste recycling company and 2 senior executives indicted by federal grand jury for fraud and international environmental crimes

September 19, 2011

The U.S. Immigration and Customs Enforcement (ICE) on September 16, 2011 released the following:

“DENVER — A local environmental waste recycling company, Executive Recycling Inc., its chief executive officer, and its former vice president of operations were indicted by a federal grand jury on Thursday on charges of wire and mail fraud, and environmental crimes.

Executive Recycling Inc., Brandon Richter, 36, of Highlands Ranch, Colo., who was the owner and chief executive officer, and Tor Olson, 36, of Parker, Colo., vice president of operations, were indicted by a federal grand jury on Sept 15. The indictment includes the following charges: wire and mail fraud; and environmental crimes in connection to the failure to file a notification to export hazardous waste; exportation contrary to law; and destruction, alteration, or falsification of records.

The indictments were announced by the following agency heads: U.S. Attorney John Walsh, District of Colorado; U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge David M. Marwell; and EPA Criminal Investigation Division Special Agent in Charge Lori Hanson. The criminal defendants and a representative of the corporation have been summonsed to make their initial appearance in U.S. District Court in Denver on Sept. 22, where they will be advised of their rights and the charges pending against them.

According to the indictment, Executive Recycling was an electronic waste (e-waste) recycling business located in Englewood, Colo., with affiliated locations in Utah and Nebraska. The company collected e-waste from private households, businesses, and government entities. Executive Recycling was registered with the Colorado Department of Public Health and Environment as a “Large Quantity Handler of Universal Waste.” Richter, as owner and CEO, was responsible for supervising all aspects of the company. Olson, the vice president of operations, was responsible for running day-to-day operations.

A significant portion of e-waste collected by the defendants was cathode ray tubes (CRTs). CRTs are the glass video display components of an electronic device, usually a computer or television monitor, and contain large amounts of lead. The defendants engaged in the practice of exporting e-waste, including CRTs, to foreign countries, including the People’s Republic of China. The defendants regularly negotiated the sale of e-waste to brokers who represented foreign buyers or who sold the e-waste overseas. The foreign buyers often paid the defendants directly. To transport the e-waste, the defendants used shipping cargo containers which were loaded at the company’s facility. The containers were then transported by rail to domestic ports for export overseas.

Executive Recycling appeared as the exporter of record in over 300 exports from the United States between 2005 and 2008, including at least 10 exports that departed from the Port of Tacoma, Wash. About 160 of these exported cargo containers contained a total of more than 100,000 CRTs.

Between February 2005 and continuing through January 2009, the defendants knowingly devised and intended to devise a scheme to defraud various business and government entities that wanted to dispose of their e-waste, and to obtain these business and government entities’ money by means of materially false and fraudulent pretenses. The defendants represented themselves on a website to have “extensive knowledge of current EPA requirements. The defendants falsely advertised to customers that they would dispose of e-waste in compliance with all local, state and federal laws and regulations. It was part of the scheme that the defendants falsely represented that they would dispose of all e-waste, whether hazardous or not, in an environmentally friendly manner. Specifically, the defendants falsely represented that the defendant company recycled e-waste “properly, right here in the U.S.” They also stated that they would not send the e-waste overseas.

The defendants’ misrepresentation induced customers to enter into contracts or agreements with the defendants for e-waste disposal. Each victim paid the defendants to recycle their e-waste in accordance with the representations made by the defendants. Contrary to their representations, the defendants sold the e-waste they received from customers to brokers for export overseas to the People’s Republic of China and other countries.

“The proper disposal of our electronic waste is not only critical today, but will also become more important in the future,” said U.S. Attorney John Walsh. “U.S. law requires proper disposal of this type of waste not only for the protection of Americans, but also so that we in the United States live up to our responsibility to be good international environmental stewards.”

“Our ongoing 30-month investigation included cooperation from law enforcement agencies in the United States, Hong Kong and Canada,” said David M. Marwell, special agent in charge of ICE HSI in Denver. “The investigation confirmed that Executive Recycling repeatedly and illegally exported used cathode ray tubes to China. In addition, Executive Recycling also made false promises to its customers who believed that Executive Recycling was properly disposing of their electronic waste. Homeland Security Investigations stands ready to prevent any company from circumventing U.S. controls to export hazardous waste.”

“As consumer demand for electronic goods continues to grow, communities and individuals will look for safe, recycling options for electronics that are no longer needed,” said Lori Hanson, Special Agent in Charge of EPA’s criminal enforcement program in Colorado. “EPA is committed to ensuring that companies that offer fraudulent recycling services, where e-waste is illegally shipped abroad, are caught and prosecuted.”

Potential Penalties upon conviction:

  • If convicted of wire fraud, the defendants face not more than 20 years in federal prison, and a fine of up to $250,000, or twice the gross gain or loss from the offense, per count, for each of the 10 counts.
  • If convicted of mail fraud, the defendants face not more than 20 years in federal prison, and a fine of up to $250,000, or twice the gross gain or loss from the offense, per count, for each of the three counts.
  • If convicted of the one count of RCRA, the defendants face not more than two years imprisonment and a fine of up to $500,000, or either twice the gross gain or loss, or $50,000 per day of offense.
  • If convicted on the one count of smuggling goods from the U.S., the defendants face not more than 10 years in federal prison, and a fine of up to $250,000.
  • If convicted of one count of destruction of records during the course of EPA’s administrative process, the defendants face not more than 20 years in federal prison, and a fine of up to $250,000. The indictment includes an asset-forfeiture allegation, which states that upon conviction the defendants shall forfeit to the United States any and all property or proceeds derived from their illegal activity.

This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the Environmental Protection Agency’s Criminal Investigation Division.

The defendants are being prosecuted by Assistant U.S. Attorney Suneeta Hazra and Special Assistant U.S. Attorney Lillian Alves, District of Colorado.

The charges contained in the indictment are allegations, and the defendants are presumed innocent unless and until found guilty.”

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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