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August 26, 2009

Long Island Press

LI Beverage Dealers Arrested In Bottle Deposit Scam

Eight Long Island men have been arrested for their involvement in an elaborate scheme to redeem cans, bottles and other recyclable beverage containers repeatedly as a way of stealing millions of dollars from Pepsi, Anheuser-Busch, Miller Brewing Company, their wholesalers and other corporations, Suffolk prosecutors announced Tuesday. And now, the investigation is going statewide.

“It’s a profitable perversion of New York’s beverage container recycling law and we suspect it’s been going on for years,” said District Attorney Thomas Spota.

Under the control and direction of 60-year-old Joseph Luzzi, owner and operator of Boro Recycling in Bayside, beverage dealers were recruited to illegally re-redeem bottles and cans. Peter Sidote, 53, of Dix Hills, the owner and operator of Party Time Beverage in Brentwood, is suspected of being the central Long Island broker for the operation.

Each bottle and can illegally re-redeemed, brought in a 7-cent profit. More than $1 million in cash has been recovered, some packed in cigar boxes hidden in the bottom of office paper shredders, according to investigators.

“This is Bernie Madoff meets the recycling industry,” said Attorney General Andrew Cuomo, who has broadened the investigation started by Spota to the entire state and issued a first round of subpoenas to companies in the bottle recycling business. “By all indications the alleged corruption being announced today is not limited to Suffolk County.”

The bottle and can recycling system is arranged so that beverage distributors pay beverage retailers for every empty bottle or can that the retailers return to the distributors. The distributors, in turn, send the empty bottles to be recycled. Some distributors hire a middleman recycling company to physically collect and transport the empty bottles to recycling centers. Each redeemed bottle is worth five cents—which comes from a deposit  that retailers pay when purchasing the bottle and then collect from consumers—plus an additional handling fee of two cents.

Under the new “Bigger, Better Bottle Bill,” 80 percent of the unclaimed deposits that distributors garner are now turned over to the NYS budget. The state has estimated that about $150 million per year will go back to the state in the form of those funds. On a statewide scale, this kind of scheme could be costing the budget millions of dollars, Cuomo says.

“It’s stealing from the people of this state,” he added. “When you steal from the state, you steal from the tax payers.”

Sidote and Luzzi were charged with grand larceny, as well as Robert Grady, 44, of East Stroudsburg Pennsylvania, an employee of Boro Recycling who allegedly acted as the liaison between Luzzi, Sidote and the other beverage retailers.

Other beverage dealers charged with grand larceny are Robert Almes, 48, owner and operator of Islip Cold Beer, in Islip, Kwang Jhong, 42, owner and operator of S&H Distributors in Central Islip, Joseph Sciara, 44, owner and operator of Bellmore Beverage in Bellmore, and Michael Lisi, 47, owner and operator of Monarch Beverage in Long Beach.


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