September 28, 2007

Michigan AG Cracks Down on Container Smuggling Ring

Michigan Attorney General Mike Cox announced the culmination of a successful investigation into a complex scheme to defraud Michigan taxpayers.

Operation Can Scam uncovered two Ohio-based smuggling rings that have bilked Michigan taxpayers out of hundreds of thousands of dollars by perpetrating a continuous fraud on the Michigan Bottle Deposit Fund.

The smugglers would collect non-redeemable beverage containers purchased outside of Michigan by the millions, crush them, bag them in Michigan redemption bags, and sell them to several stores at a discount in southeast Michigan.

"The 10 cents deposit that we all pay per beverage in this state is used to fund environmental cleanup efforts throughout Michigan. These defendants have not only perpetrated crimes against Michigan taxpayers but also against the natural habitat of Michigan itself," said Cox.

"Eighteen months of investigation by dedicated state police detectives and our partners uncovered a sophisticated ring of criminals who were exploiting Michigan's 10 cent bottle refund," said Colonel Peter C. Munoz, Michigan State Police Director. "Each year, this type of activity defrauds the state approximately $13 million."

The investigation by the Attorney General's Office, the Michigan Sate Police, the Department of Environmental Quality, and the Department of Treasury has resulted in 20 search warrants being executed today. The targets of the search warrants included the homes of the smugglers, the stores that participated in the scheme, and the store owner homes.

Fifteen arrest warrants were also issued for the smugglers and the owners of those stores. The charges include maintaining a continuing criminal enterprise, a 20-year felony, and fraud, a 5-year felony.

http://www.recyclingtoday.com/news/news.asp?ID=12017