The New York State Department of Environmental Conservation (DEC) joined a statewide multi-agency effort to help prevent returnable container schemes that defraud the state of millions of dollars each year. This new effort will help uncover practices that prevent bottles and cans without deposits from being redeemed, thus reducing funds that support crucial environmental and other state initiatives.
“New York’s highly successful Bottle Bill is an unfortunate target for unscrupulous criminals looking to make big bucks from the state’s nickels,” Basil Seggos, New York DEC commissioner said. “This newly launched effort will help foster coordination among state and local partners across the many jurisdictions included in Bottle Bill enforcement to help recoup lost revenue, hold violators accountable, and eliminate the competitive disadvantage experienced by companies that play by the rules.”
This new effort will bring together the expertise of multiple state agencies, including law enforcement and technical expertise from the State Department of Taxation and Finance (DTF), Department of Agriculture and Markets, State Liquor Authority, and others to work collaboratively on collecting and interpreting data, auditing records, inspecting and certifying redemption and counting equipment, investigating complaints, and preventing or prosecuting fraudulent activities.
New York’s Returnable Container Act, known as the Bottle Bill, is one of the state’s most efficient and successful recycling programs. The Bottle Bill improves litter control, provides relief to overburdened municipal recycling systems, and increases beverage container recycling in New York. Recyclables collected through this program are readily returned for manufacturing of containers and other commodities. The law requires a deposit of at least $.05 on containers for carbonated soft drinks, beer and other malt beverages, mineral water, soda water, wine products, and water that doesn’t contain sugar. A deposit is required on glass, metal, and plastic containers that hold less than one gallon or 3.78 liters.
Since the Bottle Bill was amended in 2009, $.04 of each unredeemed $.05 are remitted DTF, generating approximately $117 million in revenue for New York State in 2022 alone. Most of the funds collected go to the State’s General Fund; of these monies, there is currently $23 million dedicated each year to the State’s Environmental Protection Fund. Bottle Bill sales data are often held confidential, but some estimates of the impact of fraud and underreporting of deposits reach tens or even hundreds of millions of dollars.
DEC and its state and local enforcement partners have successfully prosecuted redemption container fraud cases in the past, including a 2018 DEC and New York State Attorney General investigation of North Bergen Beverage that revealed sales of tens of millions of beverage containers without initiating deposits, depriving the state of an estimated $4 million. Bottle Bill fraud can take many forms, such as transshipping of filled beverage containers from non-deposit states; the fraudulent redemption of empty beverage containers from out-of-state and double-redemption schemes; reverse vending machine tampering; and deposit initiators not registering with DTF and not reporting, or under-reporting sales. It is hoped that as the work evolves, this process will reveal areas where laws, regulations, policies and/or procedure can be modified to strengthen the State’s ability to prevent fraud.