U.S. Department of Justice|
Debra Wong Yang
United States Attorney
Central District of California
United States Courthouse
312 North Spring Street
Los Angeles, California 90012
Release No. 06-035|
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FOR IMMEDIATE RELEASE
March 22, 2006
For Information, Contact Public Affairs|
Thom Mrozek (213) 894-6947
Los Angeles, CA - Two individuals and two corporations pleaded guilty yesterday to federal criminal charges that they defrauded California's beverage container recycling program by seeking millions of dollars in refunds for bottles and cans that either did not exist or did not qualify for California recycling refunds.
Errol Segal, two corporations under his control – Active Recycling and Worldwide Recycling – and Memveluz Lampert pleaded guilty to various charges in two schemes that defrauded the California Department of Conservation's recycling program out of approximately $2.5 million.
California consumers pay into the state's beverage container recycling system every time they purchase certain beverages – such as soda – in glass, plastic and aluminum containers. This money is refunded to the consumer when containers are redeemed at privately-owned recycling centers, which then reclaim California Redemption Value payments from the state Department of Conservation. Only cans and bottles sold in California are eligible for the CRV refund. Segal, Lampert and the other defendants defrauded the program by seeking and obtaining payments for recyclable goods that came from outside California or simply did not exist.
Appearing before United States District Judge A. Howard Matz last night, Segal pleaded guilty to mail fraud and to conspiring with several individuals to process non-CRV cans and bottles that were transported into California from other states and from Mexico, and then submitting falsified paperwork seeking reimbursement from California for processing those ineligible cans and bottles. The scheme led California to pay Segal and his corporations more than $2 million between September 1998 and February 2000.
Appearing yesterday morning before Judge Matz, Lampert pleaded guilty to conspiracy in a second scheme to defraud the State of California. Lampert admitted that, at the direction of Segal, she oversaw Active Recycling employees who processed paperwork for non-existent bottles and cans that were never recycled. As part of this scheme, which cost California more than $400,000 in less than a year, Lampert directed Active Recycling employees to falsify paperwork that allowed it to receive CRV payments for non-existent bottles and cans.
Segal and Lampert also pleaded guilty yesterday to attempting to hinder the criminal investigation by trying to convince a key witness to lie to law enforcement agents and to the grand jury about their illegal activities.
On Monday, another defendant in the case, Arman Balabekyan pleaded guilty to mail fraud related to the scheme to bring recyclable materials from Mexico and elsewhere. In August and September of 2005, Artur Melikyan, Nver Nazinyan, Matevos Arzumanyan and Tigran Petrosyan each pleaded guilty to mail fraud and money laundering charges in relation to the scheme.
Also yesterday, Armen Khachatryan pleaded guilty to misprison of a felony for helping to conceal the scheme related to the foreign bottles and cans.
Ten defendants in this case have pleaded guilty. They are:
- Errol Segal, 61, of Encino, the president and chief executive officer of Active Recycling, who faces a maximum sentence of 20 years in federal prison and is scheduled to be sentenced by Judge Matz on July 19;
- Memveluz Lampert, 48, of Redondo Beach, the operations manager of Active Recycling, who faces a maximum sentence of five years imprisonment and is scheduled to be sentenced on July 26;
- Active Recycling Co., Inc., which is located at 2000 West Slauson Avenue in Los Angeles and which faces a maximum sentence of five years probation and a maximum fine of $1 million, is scheduled to be sentenced on July 19;
- World Wide Recycling Co., Inc., which is located at 2000 1/2 West Slauson but was in the same space as Active Recycling, and which faces a maximum sentence of five years probation and a maximum fine of $1 million, is scheduled to be sentenced on July 19;
- Tigran Petrosyan, 37, of Burbank, who faces a maximum sentence of 50 years imprisonment and is scheduled to be sentenced on June 15;
- Artur Melikyan, 37, of Reseda, who faces a maximum sentence of 50 years imprisonment and is scheduled to be sentenced on June 15;
- Nver Nazinyan, 38, of Tujunga, who faces a maximum sentence of 50 years imprisonment and is scheduled to be sentenced on June 15;
- Matevos Arzumanyan, 44, of Hollywood, who faces a maximum sentence of 50 years imprisonment and is scheduled to be sentenced on June 16;
- Arman Balabekyan, 35, of Tujunga, who faces a maximum sentence of five years imprisonment and is scheduled to be sentenced on July 20; and
- Armen Khachatryan, 48, of Sun Valley, who faces a maximum sentence of three years imprisonment and is scheduled to be sentenced on July 27.
An eleventh defendant has agreed to plead guilty to assisting Segal and Lampert in their attempts to hinder the investigation. Rosario Lim, 54, of Buena Park, the bookkeeper for Segal's companies, is scheduled to plead guilty before Judge Matz on Friday in United States District Court.
Pursuant to the terms of their guilty pleas, Segal, Lampert, Petrosyan, Melikyan, Nazinyan, Arzumanyan, Balabekyan and Khachatryan will be forbidden from ever participating in the ownership, management or operation of any entity engaged in the business of recycling beverage containers in California. Furthermore, the California Department of Conservation will revoke the recycling certifications of Active Recycling and Worldwide Recycling.
These convictions are the result of an investigation by the Federal Bureau of Investigation, the United State Postal Inspection Service, IRS-Criminal Investigation Division, the California Department of Conservation and the California Department of Justice's Bureau of Investigation.
Release No. 06-035
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