Alleged $10K bottle redemption scam spurs criticism of system

AP PHOTO BY JOEL PAGE

A truck carrying bottles and cans pulls into Green Bee Redemption, a recycling center in Kittery on Friday. A couple that runs the center and a Massachusetts man were indicted this week for allegedly redeeming beverage containers in Maine that were bought in other states without a redemption fee.
Joel Page | AP
AP PHOTO BY JOEL PAGE A truck carrying bottles and cans pulls into Green Bee Redemption, a recycling center in Kittery on Friday. A couple that runs the center and a Massachusetts man were indicted this week for allegedly redeeming beverage containers in Maine that were bought in other states without a redemption fee.
Posted Feb. 11, 2011, at 10 p.m.
Last modified Feb. 12, 2011, at 11:16 a.m.

SOUTH PORTLAND , Maine— Recent indictments connected to an alleged scheme to dupe the state’s bottle redemption program highlights weaknesses in the system, officials in the beverage distribution business said Friday.

The group, led by the Maine Beverage Association and the Maine Beer and Wine Wholesalers Association, held a news conference to discuss incidents of fraud — the most recent case of which involves a Kittery couple allegedly passing off more than $10,000 worth of out-of-state containers as if they had been purchased in Maine.

Industry officials noted the significant annual costs to the industry and proposed a review of the bottle redemption system in Maine.

“If our goal as a state is to significantly reduce the cost to recycle and increase the number of items that are recycled, it might be a good time to explore other possible options, as has been done and is going on in other states, including Vermont, Iowa and specifically Delaware, who repealed their bottle bill last year and replaced it with a comprehensive recycling program,” said Newell Augur, executive director of the Maine Beverage Association, speaking at Coca Cola Maine’s distribution facility.

Augur said Sen. David Hastings III, R-Fryeburg, has filed a resolve to convene the stakeholders and look at the bottle redemption system.

The groups used the indictment, said to be the first time criminal charges have been filed in the state regarding bottle-refund fraud, as a backdrop in their efforts to have the bottle bill revisited.

Thomas and Megan Woodard, who run Green Bee Redemption in Kittery, face the more serious charge of allegedly passing off more than 100,000 out-of-state containers — with a value of more than $10,000 — as if they had been purchased in Maine.

The Woodards did not return calls to their home seeking comment.

They are accused of knowingly accepting containers at their redemption center that were purchased in another state, and therefore not eligible for a refund in Maine, and then selling them to distributors for the combined handling and redemption fees.

Peter Prybot, a 62-year-old lobsterman and writer from Gloucester, Mass., denied the allegations in the indictment, which charges him with redeeming more than $1,000 of empty containers in Maine that weren’t eligible to be redeemed.

Prybot said he accumulated cans and bottles during road trips to Maine and later cashed them, but said they all came from Maine.

The investigation started last year, when Ray Dube, redemption recovery manager for Coca Cola Northern New England, got a tip that someone was bringing loads of bottles into Maine. Dube, who attended Friday’s press conference, told the Bangor Daily News that he looked into the allegation and then contacted state officials in Maine.

He watched the suspect for several nights, and then, last spring, observed him backing his SUV up and loading a trailer full of bottles. He followed the man across the bridge into Maine, having previously contacted the state and Kittery police. The man pulled into a Kittery address and began to unload his trailer, and police ap-proached him, Dube said.

Dube would not reveal more details, but did say that the man he followed was not one of the people indicted. Augur said during the news conference that he believed more indictments may be forthcoming.

Dube said it was “absolutely” gratifying to see this sort of resolution on a bottle case. He said he investigates a number of different scams, including the trucking in of out-of-state bottles.

“There is so much of this, it’s so expensive for us — it’s organized,” he said.

Augur said the state estimates the system contains about $8 million in fraud annually.

Roughly a billion containers under the bottle bill are sold in Maine each year, he said. Ninety percent of those bottles are recycled through the bottle bill system. Roughly 10 percent of those, or 90 million containers, are fraudulently brought in from other states, Augur said.

“It’s a tremendous cost. More significantly, it’s a cost that’s ultimately passed on to the Maine consumer in the form of higher prices,” he said.

The system also is inefficient, he said. There are essentially two, duplicative systems for recycling — one to handle bottle bill containers, the other to handle other recyclables.

Three fleets of trucks collect and ship bottles under the bottle bill — one for members of the Maine Beverage Association, one for Maine Beer and Wine Wholesalers and one for companies without an organization.

The distributors would prefer to have a robust recycling system, wherein they would not be processing the empties. Rather, those would be handled by communities and co-ops such as a nonprofit waste management company owned and operated by 21 municipalities in southern Maine. And the money for recycling the aluminum and plastics would go to the communities, offsetting costs, Augur said. Currently, the distributors are getting $1,600 per ton of aluminum, he said.

There are 800 licensed redemption centers in Maine, and roughly 500 of them are in operation at a time, Augur said. He said he thought the legislation his group sponsored suggests that stakeholders look at how those businesses could be compensated if the bottle bill changes, or at ways those businesses could evolve to handle new recycling needs.

“We don’t claim to know the answer to that, but we do think that given the level of inefficiency, given the amount of fraud, it ought to be something we look at,” said Augur.

Christian Milneil, communications manager for Maine Audubon, questioned the need to change the current system. His group was involved in passing the original bottle bill decades ago. And, he said, the bottle redemption system has been improved recently with the addition of automation through companies such as Clynk of South Portland.

“The private sector is taking care of a lot of efficiency issues. There are probably better things for government to focus on — this is not the most pressing issue facing the state’s economy,” he said. “I think a lot of people would prefer if we left well enough alone.

The Associated Press contributed to this report.

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