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Recycling Company Fined $4.5 Million for Illegal Export of Electronic Waste; Executives Receive Prison Sentences

Executive Recycling, Inc., a U.S. electronic waste recycling business, and two company executives were sentenced this month by U.S. District Court Judge William J. Martinez for defrauding customers and illegally shipping electronic waste (“e-waste”) overseas. The corporation was fined $4.5 million and sentenced to 3 years on probation. CEO and owner Brandon Richter was ordered to serve 30 months in federal prison, followed by 3 years on supervised release. Judge Martinez also ordered Richter to pay approximately $77,000 in fines and restitution and to forfeit over $140,000 in assets. Richter and Executive Recycling received their sentences one week after the corporation’s Vice President of Operations, Tor Olson, was sentenced to 14 months in prison and fined $20,000.

After an 11-day jury trial, which began December 21, 2012, defendants were convicted on multiple criminal counts, including seven counts of wire fraud, the illegal export of hazardous waste to developing countries, smuggling, and obstruction of justice. Defendants induced businesses and government entities to enter into contracts or agreements under materially false and fraudulent pretenses. Specifically, while defendants represented to customers that they would dispose of e-waste “properly, right here in the U.S,” defendants instead engaged in the unauthorized export of that e-waste to foreign countries, often receiving payments directly from foreign buyers. Since these misrepresentations and scheme were advanced through the mail and email, the federal government had jurisdiction to bring the mail and wire fraud charges in addition to the environmental crimes.

According to the government, the company received $1.8 million during the four year period in question. Between 2005 and 2008, Executive Recycling was the exporter of record for more than 300 exports from the United States, including the export of over 100,000 cathode ray tubes (“CRTs”) containing lead. CRT disposal is regulated in the United States under the Resource Conservation and Recovery Act (“RCRA”). The single obstruction count arose from an alleged effort to destroy or conceal the export records.

Statements by EPA and DOJ officials suggest that this conviction is part of a growing enforcement trend regarding e-waste and exports. Jeff Martinez, the special agent in charge of EPA’s criminal enforcement office in Colorado, emphasized: “Pollution and greed respect no boundaries and EPA is committed to combatting the illegal traffic of e-waste, which poses particularly significant environmental health risks in developing countries.” According to U.S. Attorney John Walsh, this case demonstrates that “federal investigators and the U.S. Attorney’s Office can and will reach beyond our country’s borders to investigate crime and prosecute wrongdoers.”

Companies managing e-waste would be wise to carefully review their disposal practices, including the practices of any entities retained to handle the recycling of e-waste. Electronics recyclers should be careful to identify and comply with all applicable federal waste export laws, any applicable state laws, and the requirements of importing countries, many of which more stringently regulate the trans-boundary movement of e-waste for recycling than the United States. In addition, recyclers should be alert to bills and legislative proposals in the United States and abroad that may expand upon existing prohibitions on e-waste exports. For example, on July 24th, 2013, the Responsible Electronics Recycling Act (“RERA”) was introduced in the 113th Congress. If passed, RERA will prohibit the export of certain toxic electronic scraps and require responsible domestic recycling.

For more background on the Executive Recycling case, click here. For information on another recent enforcement action against an e-waste recycler for the illegal and fraudulent export of e-waste, click here.

© 2020 Beveridge & Diamond PC


About this Author

Peter C. Anderson White Collar and Environmental Crimes law attorney

Mr. Anderson uses his experience as a former federal prosecutor to defend corporations and individuals against government investigations and prosecutions, primarily involving environmental and regulatory crimes. In addition to defense services, he provides corporate compliance counseling. He helps lead the Firm's White Collar and Environmental Crimes Practice Group.

Daniel A. Eisenberg environmental law attorney, Beveridge and Diamond Law Firm

Daniel Eisenberg represents clients in complex civil environmental litigations and arbitrations and counsels a diverse group of manufacturers on compliance with energy efficiency, green procurement and other product stewardship regulations.   

Mr. Eisenberg’s experience includes all aspects of electronic discovery, expert work, and trial preparation for a series of products liability and toxic tort cases related to alleged groundwater contamination involving a gasoline additive.  He also represents individual businesses and municipalities in...

Paul E. Hagen, Environmental Attorney, Beveridge Diamond Law Firm

Paul Hagen practices in the areas of U.S. and international environmental law. He counsels leading multinational corporations and trade associations on environmental compliance and market access requirements related to product design, supply chain management, and resource protection measures in the U.S. and in key markets worldwide. He also advises clients on the negotiation and implementation of regional and global environmental agreements, with a particular emphasis on treaties and related legislation impacting the chemicals, electronics, and pharmaceuticals sectors.