West End Recycling, owner convicted of scrap metal theft in organized crime case

Dive Brief:

West Virginia’s West End Recycling has been ordered to shut down and pay $200,000 in restitution for engaging in an organized criminal enterprise. Owner William Smith was convicted on a single charge, and West End Recycling on five counts of receiving stolen scrap metal—however they were indicted on 202 counts. Between September 2012 and February 2015, West End Recycling took 74,191 pounds of nickel and stolen copper telecommunication lines, worth $315,000, from West Virginia, Ohio, and Kentucky, according to the indictment.
A June 2015 warrant led to retrieval of 15 boxes of suspected stolen scrap metal, along with records and platform weight scales. Special Metals, who lost $168,591 in nickel, will receive $164,591.92 in restitution. Frontier Communications will receive $6,324, and the remaining smaller businesses who were targeted will not receive restitution, according to the Herald-Dispatch.
Smith gave back $75,000 and will owe the remaining $125,000 in installments within 18 months. He faces up to $25,000 in fines and 10 years in prison at his sentencing on June 14, and he has already agreed not to return to the scrap metal recycling business.

Dive Insight:

Recycling theft happens fairly frequently, with states like California incurring an onslaught of smuggling incidents involving beverage containers. Similar illegal activity became so common in Texas that the state implemented the Texas Metal Theft Statute to prevent the theft of copper, and requires recycling ID cards to help regulate the sale of other metals.

The convictions in West Virginia sent a message loud and clear to the business community.

"The scrap yards are largely operating legitimately," said Assistant Prosecutor Joe Fincham as reported in the Herald-Dispatch, though he said scrap metal theft had been on the rise prior to this incident. "There is less of a problem with copper theft in the area, and I think that is due to the fact there is no longer a market. Scrap yards are afraid if they start taking stolen property, they will end up just like West End Recycling."

The rest of the charges in the 202-count indictment were dropped. Others who were named in this indictment or related ones got off for agreeing to testify if Smith went to trial.