Major California Metal Recycling Company to Pay $4.1 Million in San Francisco and Contra Costa County District Attorneys’ Enforcement Action

August 2, 2013

Contact: Stephanie Ong Stillman, DA Gascón’s Office, (415) 553-1167
ADA Alex Bastian, DA Gascón’s Office, (415) 553-1931

SAN FRANCISCO, CA: San Francisco District Attorney George Gascón and Contra Costa County District Attorney Mark A. Peterson announced today that one of California’s largest metal recyclers, Sims Group USA Corporation (“Sims”), also known as Sims Metal Management and Sims Metal, will pay $ 4.1 million as part of a settlement of a civil prosecution brought by the two District Attorneys.

“Metal theft threatens the well-being of our infrastructure and costs the community dearly.” said District Attorney George Gascón. “My office is committed to utilizing all tools necessary to attack the marketplace of stolen metal.”
“California is facing an epidemic of metal theft,” said District Attorney Mark A. Peterson. “The economic cost of metal theft cannot be calculated. It is not enough to go after the metal thieves alone. Recycling companies must be required to act responsibly because they can deter metal theft. The Contra Costa and San Francisco District Attorney’s Offices are working together to make metal theft less appealing for thieves by helping to ensure that recycling companies follow the law.”
In recent years, California has seen an increase in metal theft from local governments, construction sites, public transit, utilities and foreclosed homes. In an effort to shut down the market for stolen metal, California has passed laws designed to prevent, deter and detect metal theft by imposing requirements on companies that purchase scrap metal. For example, scrap metal dealers must take steps to determine that the material they are purchasing was not stolen, and they must photograph, fingerprint, and record the identification of individuals selling certain types of scrap metal. Unless a statutory exception applies, dealers must also wait three days before paying the seller for the scrap metal.

Sims owns and operates eight metal recycling facilities in Northern California. According to the District Attorneys’ complaint, Sims consistently violated these anti-metal theft laws.

During the investigation of Sims, undercover officers in San Francisco and Contra Costa County offered to sell the company utility wire, communication wire, and public utility fixtures. The company’s employees purchased the clearly “stolen” material, and failed to record the required information about the sellers. A lengthy review of the company’s records revealed that these failures were just the tip of the iceberg. For many years, Sims violated the anti-metal theft laws by, for example, not holding payments for the required three days or buying scrap metal without requiring identification or other information from the sellers.

Under the settlement, Sims must pay $4.1 million in civil penalties and costs. Sims will also be bound by a permanent injunction that insures good business practices and prohibits future violations of the law. By entering into this injunction, Sims is agreeing to procedures that will make it a model for California metal recyclers in the future.

This case was handled in San Francisco by Assistant Chief District Attorney June Cravett, and Assistant District Attorneys Joanne Hoeper, Evan Ackiron and Nancy Tung; and in Contra Costa County by Supervising Deputy District Attorney Steve Moawad and Deputy District Attorney Gary Koeppel.