City losing out on recycling funds amid fraud investigation

State reimbursement program is off amid fraud investigation of recycle center owner.

August 23, 2011|By Mark Kellam, mark.kellam@latimes.com

A front-end loader pushes a mountain of recyclable materials…

California is no longer reimbursing Burbank for its curbside recycling because the operator of the city’s recycling center is accused of making more than $48 million in fraudulent claims.

The city received nearly $20,500 in curbside recycling revenues from the state last fiscal year, according to a statement released Tuesday by the city. It will not receive any additional funds until a new operator is certified by the state and a new curbside application is approved.

The California Department of Resources, Recycling and Recovery — known as CalRecycle — denied Burbank’s application in January, but the city appealed. An administrative judge upheld the state decision, which took effect June 25.

Burbank Recycling Inc. and its owner, Geoff Folsom, face allegations that the company bilked the state out of $32 million by submitting claims for out-of-state recyclables.

Over a three-year period, CalRecycle spokesman Mark Oldfield said Burbank Recycling Inc. filed more than $48 million in fraudulent claims.

CalRecycle also alleges that another company, Mission Fiber Group, used another recycling company’s certification number in its transactions with Burbank Recycling — an illegal arrangement that Folsom was allegedly aware of, Oldfield said.

The city has not been charged with any wrongdoing.

Burbank Senior Assistant City Atty. Terry Stevenson said officials were aware of the accusations when it renewed a five-year contract with Folsom in 2009.

Burbank Recycling has had a contract with the city since 2004.

When the contract was renewed, Stevenson said city officials thought a hearing on the allegations would be held in a timely manner, but with the case still pending, the decision was made to cut ties with the company. Folsom was notified in March, Stevenson added.

Oldfield said environmental cases often involve a labor-intensive process with a lengthy discovery period before a hearing is set.

In an email, Folsom said Burbank Recycling would continue to cooperate with the city.

“We have been an important part of the business community for many years and will continue to process the city's material until our services are no longer required,” he said.

CalRecycle’s decision does not impact recyclables brought into the center on Flower Street. And Burbank Recycling will also continue to operate the center until a new operator is found, Stevenson said.

“It’s either them or we shut it down,” he said. “And we don’t want to shut it down.”

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