Calif. Agency Sues Beverage Can Recycler : Courts: State Salvage Co. of Long Beach blames it problems on the Conservation Department’s rapidly changing regulations.

In its first use of the federal Racketeer Influenced and Corrupt Organizations Act, or RICO, California’s recycling agency announced Friday that it has filed a $4-million civil suit against Long Beach-based State Salvage Co.

The suit is “by far the largest” enforcement effort so far in the state’s 3-year-old recycling program, according to Marcia J. Steinberg, chief counsel for the state Department of Conservation.

State Salvage operates the largest single recycling center for aluminum beverage cans in the state.

The Conservation Department’s Division of Recycling alleges that three principals in the firm conspired to unlawfully collect money from the state’s recycling fund, in part by buying used beverage containers from out of state. Under the state program, beverage distributors in California pay into a fund that is ultimately used to pay such recycling companies as State Salvage when they make their redemption claims.

But beverage containers from out of state generate no such fees, thereby shorting the state fund if they are redeemed.

The Division of Recycling began its investigation after an audit of the firm’s redemption claims.

“We’ve been in this battle for some time,” said Mark E. Beck of the Los Angeles law firm of Beck & DeCorso, which represents the company. “We’ve established that the audit conducted of State Salvage was incompetent.”

Beck also blamed regulations that “seem to change every week. You could interview 25 (recycling companies) tomorrow and find unanimity that the Department of Conservation does not know what it’s doing.”

Under RICO, a judge may assess triple damages, meaning that the firm could end up paying as much as $12 million if convicted. The suit was filed Dec. 26 in U.S. District Court in Sacramento.