Recycler fined millions after undercover sting

Sims Group USA boasts of being the world’s largest recycler of metals and electronics.

But the firm will pay a $4.1 million fine after prosecutors say employees were caught buying stolen metal in a Bay Area-based undercover sting.

District Attorneys in both San Francisco and Contra Costa County said Friday that Sims Group USA Corp. agreed to the make the payment to settle a civil suit filed by the prosecutors.

A spokesperson for the San Francisco District Attorney’s Office told SFBay San Francisco police were conducting their own sting operation of the company’s San Francisco facility when investigators learned of a separate investigation of the company’s Contra Costa County locations.

Officials say during the course of the investigations, undercover officers went to the recycler’s facilities and were able to sell utility wire, communications wire and public fixtures that prosecutors described as “clearly stolen.”

Prosecutors also said that  a review of the company’s records found that Sims violated anti-metal theft laws by not asking for IDs of the sellers, by failing to keep records of the sales and — as required by law — not holding payments for three days.

Prosecutors say employees of the recycler were buying stolen metal for “many” years, with Stephanie Ong Stillman, a spokesperson for the San Francisco District Attorney’s Office, telling SFBay:

    “This has been going on for a long, long period of time.”

With the price of metal soaring during the past several years, stealing metal has become increasingly attractive to thieves, and apparently to recycling companies.

Contra Costa District Attorney Mark Peterson said of the increase in thefts:

“California is facing an epidemic of metal theft.  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.”

Prosecutors say as part of the settlement, Sims — which also operates as Sims Metal Management and Sims Metal — will also be bound by a permanent injunction that insures good business practices and prohibits future violations of the law.

According to its website, with more than 120 locations in North America, including several in the Bay Area, Sims is the largest publicly traded metal and electronics recycler in the world.

Company spokesman Jim Haggerty issued a statement to SFBay about the settlement, noting that Sims was not admitting to any liability in the case:

“While the company disagreed with the size of the financial settlement in this case, the company believed it was important to put this disagreement behind it.  The company continues to work cooperatively with local governments and with all other stakeholders involved with the purchase of scrap metal.”