Pallet and Container Thefts Lead to Jail Terms and Millions in Restitution

Pallet and plastic container theft: whether the postal system, automotive parts movement or grocery industry, and whether America or Europe, pallets and containers are being specifically being targeted by criminals, or at least falling into their lap.  All of these files could be described as being crimes of opportunity. These are the stories.

File photo: stolen plastic pallets at recycler location.

Postal Pallet Theft: California Recycling Executives Sentenced to Two Years and Ordered to Pay $3.4 Million in Restitution

LOS ANGELES–The central players in a scheme to recycle stolen postal pallets have been sentenced to two years in federal prison after pleading guilty to conspiracy to convert government property and conspiracy to launder money.

Jorge Villalobos, 41, of Riverside, was sentenced in April, and Hugo Guzman, 40, of Fontana, was sentenced in July, both by United States District Judge Manuel L. Real. In addition to the prison time, they were ordered to pay $3.4 million in restitution, the largest restitution amount ordered for theft of United States Postal Service (USPS) property, according to a press release. Based on court records, this restitution has been paid in full.

Villalobos is President and Guzman is Vice President of Go Green Industries in Riverside. The business is a plastics recycler, processor, and compounder. According to court records, between 2008 and 2014, Villalobos and Guzman, through Go Green Industries, knowingly acquired stolen USPS plastic pallets, shredded them, and sold the resulting plastic on the open market for corporate profit. Further, Villalobos and Guzman laundered the proceeds from this illegal activity by transferring the money to two straw-person accounts, and then using those accounts to promote further unlawful activity.

“These defendants siphoned millions of dollars from the USPS by actively seeking out stolen pallets, and pumping money from the sales into their business,” said United States Attorney Nicola T. Hanna. “They intentionally incentivized theft of government property and their sentences should deter those who would follow in their footsteps.”

According to coverage in Plastics Recycling Update, the illegal activity involved shipping the shredded material to Mexico, and then returning it to the U.S.:

In an affidavit accompanying the search warrant, a Postal Service inspector said that after authorities began investigating Go Green, instead of shipping flake directly from Alameda Recycling to Go Green, as had been done before, flake was shipped from Alameda Recycling to an operation in Mexicali, Mexico. There, it was given a manifest and certification falsely claiming it originated in Mexico, and it was then re-imported and trucked to Go Green.

“Delivering mail over 1.5 billion miles last year to over 157 million residences, businesses and P.O. Boxes each day takes many containers, pallets, carts and trays,” said Nichole Cooper, Inspector in Charge of the Los Angeles Division of the Postal Inspection Service. “Theft of this equipment feeds an industry and Postal Inspectors are dedicated to identifying and recovering postal equipment and assets, and seeking prosecution when necessary. The Inspection Service is proud at the result of this investigation and the award of over $3.4 million in restitution to the Postal Service.”

In its sentencing papers, the government argued that these executives directed the affairs of a company that “played an integral role in the black market of stolen government property in Southern California” and that the company “aggregated the efforts of multiple plastics thieves” and “created a demand for further theft.”

“Villalobos and Guzman executed a money laundering scheme whereby they used bank accounts in the names of two other individuals to hide proceeds of Go Green’s dirty activity,” said R. Damon Rowe, Special Agent in Charge of IRS Criminal Investigation. “We are proud to work with our law enforcement partners to investigate and prosecute individuals who attempt to enrich themselves by fraudulent means and to help put a stop to this and other types of white collar crime.”

Trucking Company President Faces 20 Years After Automotive Plastic Container Theft

DETROIT–The president of a Michigan truck hauling business pleaded guilty in Detroit federal district court to wire fraud and to willfully failing to file a tax return, according to the Plastics Recycling Update and a press release from the U.S. Attorney’s office.

According to information presented in open court and filed documents, Arshawn Kenard Hall, a resident of Farmington, Michigan, operated a truck hauling business called RAMA Enterprise, Inc.  Hall was hired to transport plastic crates filled with automobile parts on behalf of an automobile company.  After transporting the parts, Hall was expected to return the empty crates to a facility in Detroit. Instead, Hall diverted these plastic crates and sold them to a plastic recycling company for approximately $460,000.  The actual value of the plastic crates that Hall stole was approximately $2,921,000.

The defendant’s plea agreement states:

The defendant was hired to transport plastic crates of automobile parts on behalf of FCA LLC, commonly known as Fiat-Chrysler Automobile Company, primarily from Detroit, Michigan, to other locations in southeast Michigan. After transporting the parts, the defendant was supposed to return the empty crates back to a facility in Detroit on behalf of Fiat-Chrysler. However, from approximately June 2012 through approximately 2013, Hall sold the empty plastic crates that belonged to Fiat-Chrysler to a plastic recycling company located in Wixom, Michigan for approximately $460,000. The defendant deposited the checks from the recycling company, which were drawn on PNC bank, into RAMA’s account at Comerica bank, causing Comerica bank to initiate interstate wires with PNC bank. The value to Fiat-Chrysler of the plastic crates stolen by Hall was approximately $2,921,000.”

In addition, Hall failed to file a 2012 federal income tax return on behalf of RAMA and failed to pay the taxes due.  The tax loss associated with Hall’s conduct is $142,069.

U.S. District Judge Terrence G. Berg scheduled sentencing for November 29, 2018.  Hall faces a statutory maximum sentence of twenty years in prison for his wire fraud conviction, and one year in prison for failing to file a tax return.  He also faces a period of supervised release, restitution, and monetary penalties.

Pallets Worth 2.7 Million Euros Stolen Over Five Years

GIETEN, the Netherlands–Meanwhile in the Netherlands, three men and a woman were convicted in July for their role in large-scale and systematic pallet theft at the distribution center of supermarket group C1000 in Gieten. They are given community service orders of 80 to 240 hours. This report is a rough translation of a Dutch language news report dated July 23.

The men worked as a forklift and truck drivers. As a wife, the woman profited from the income from her husband’s illegal trade. One employee and his wife were acquitted.

A 58-year-old man from Gieten was the main suspect in this pallet scam. He worked as a forklift driver and was responsible for the stock management of the pallets. After investigation by a detective agency, it turned out that from 2008 to 2013, he systematically reported fewer pallets to his supervisor than there were at the company. As a result, more and more pallets were ordered than was necessary. He sold the extra pallets to two truck drivers. They put their profits into their own pocket.

The punishments were lower because this criminal case took so long to prosecute. Since the start of the investigation, it took 3.5 years before the case came to court. Normally the reasonable period is two years. Because of this overrun, the court does not impose a prison sentence on the main suspect but a community service order. The punishments in the other cases are also lower for this reason.

Another man and his wife were acquitted. The file does not show that he was actively involved in pallet theft. The man occasionally loaded a truck with ‘black’ (unlawfully released) pallets, but assumed that it was okay. He eventually suspected something was wrong. But this is insufficient to establish that he has stolen and resold pallets together with the main suspect pallets. Nor does it appear that the man and woman at that time had more money than normal. Because the man is acquitted of the illegal trade, this also applies to his wife.

The court did not rule on the compensation of more than 2.7 million euros sought by Jumbo Supermarket, because a civil lawsuit related to this claim is already underway.

Related stories:

U.S. Postal Pallet Theft Ring Uncovered

Plastic Pallet Theft Ring Charged in Michigan

Plastic Pallet and Container Theft Ring Uncovered in New Jersey

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