BAN uncovers worst e-scrap fraud in US history
One of the largest e-scrap recyclers in the US state of Washington has been convicted of sending large shipments of used computer and television screens to China instead of recycling them locally. The prosecution of Total Reclaim followed an investigation into illegal exports by the Basel Action Network.
Total Reclaim earned US$ 7.8 million (EUR 7 million) by sending broken electronics to Asia, The Seattle Times reports. Meanwhile, the recycler told customers it was a ‘friend of the Earth’. BAN found the recycling firm had exported around 3 765 tonnes of devices containing mercury – enough material to fill 430 shipping containers.
Not ‘gold standard’
The e-scrap was dismantled via manual labour at a site in Hong Kong. Workers were not aware of the health risks and were not wearing masks or other safety gear. The screens were simply smashed, BAN reports.
The organisation has its own independent recycling grading system and had previously recognised Total Reclaim with its ‘gold standard’. BAN founder Jim Puckett says he was ‘shocked’ when GPS trackers installed by BAN in selected devices indicated Total Reclaim material had travelled all the way to Hong Kong.
When Puckett confronted Total Reclaim, the recycler tried to cover up its wrongdoings. It created new shipping manifests to suggest that only plastic was being sent to Hong Kong, claiming the e-scrap had ended up there accidentally. Puckett didn’t believe this and travelled to China where he encountered many such shipments from Total Reclaim, including new ones from a recent Earth Day collection drive.
According to the US Attorney’s Office, Total Reclaim started the illegal shipments in 2008. The recycling company has customers spanning Washington, Oregon and Alaska and important clients included universities and city councils. This is the third time an American recycler has been prosecuted for fraudulent practices and the largest case in US history by volume.
Total Reclaim co-founders Craig Lorch and Jeff Zirkle were each sentenced to two years and four months in prison by a federal judge in Seattle. They also will pay US$ 945 000 in restitution and serve three years of supervised release.
‘This is a serious offence,’ US District Court Judge Richard Jones told the entrepreneurs. He said their actions had ‘struck a huge blow’ to the public’s trust in the recycling industry and was ‘a damage that can’t be recovered’.
Lead prosecutor Seth Wilkinson said the seven-year scheme didn’t only benefit Lorch and Zirkle by US$ 7.8 million. They had also saved the US$ 2.6 million they would have had to spend to properly dispose of the electronics.
Both Lorch and Zirkle pleaded guilty. They said the fraud started as a business decision to deal with extra recycling volume but it had ‘snowballed’. The company’s defence attorney told the court that the recycler processed 97% of its e-scrap properly.
Total Reclaim has 740 customers with revenue of over US$ 5 million last year.