Jeff Zirkle of Bonney Lake promised customers that his company, Total Reclaim, would safely and responsibly recycle millions of pounds of electronics inside the Unites States.
Instead, Zirkle, 55, and his Seattle-area business partner Craig Lorch, 61, secretly shipped those electronics to Hong Kong while taking money from public agencies, according to a Department of Justice press release.
On Nov. 16, the two men pleaded guilty in the U.S. District Court in Seattle to conspiracy to commit wire fraud, which is punishable by up to five years in prison and a $250,000 fine. Additionally, Zirkle and Lorch agreed to pay restitution of up to $1.1 million.
“These defendants held their company out as one of the good guys, signing agreements promising they would keep hazardous materials out of the environment. But even as they made that pledge, they secretly shipped millions of flat screen monitors to Hong Kong where disposal practices endangered workers and the environment,” U.S. Attorney Annette L. Hayes said in the release. “Their actions were driven by greed and a total disregard for the promises they had made. As a result customers unknowingly ended up harming the environment rather than protecting it as they intended.”
Total Reclaim has a long history in Washington. According to its website, the company was created to help government agencies and other industries recycle refrigerators and HVAC equipment in light of the amendments made to the 1990 Clean Air Act.
Since then, the company became the Pacific Northwest’s largest electronic waste recycler as well as the biggest participant in Washington state’s “E-Cycle Washington” program, which allows people to drop their old electronics off at designated sites to be given to electronic recycling companies, the Justice Department stated. According to Total Reclaim’s website, the company has recycled more than 536 million pounds, and counting, of e-waste.
In 2003, Lorch signed the Electronic Recycler’s Pledge of True Stewardship, which in part promised to “not allow the export of hazardous e-waste [they] handle to be exported from developed to developing countries either directly or through intermediaries,” according to charging documents. The company also became an e-Steward in 2012, which meant Total Reclaim agreed to annual audits to ensure a number of requirements and practices were being met, including not sending e-waste to developing countries, also known as countries not a part of the Organization for Economic Co-Operation and Development (non-OECD).
Additionally, many of Total Reclaim’s customers, including the city of Seattle, the University of Washington, and its biggest customer, the Washington Materials Management and Financing Authority (which runs the E-Cycle Washington program) operated under a service agreement with Total Reclaim that stipulated the company would not ship e-waste to non-OECD countries.
But around early 2008, Total Reclaim began selling e-waste, particularly LCD monitors, to a company called M-Stream, which turned around to sell the LCD monitors in Hong Kong.
“By doing so, Total Reclaim avoided the cost of safely processing LCDs, as it had promised to do, and instead collected revenue from M-Stream for the LCDs in addition to the money Total Reclaim had already received from its customers,” charging documents read.
Total Reclaim was paid roughly $1.2 million to process 8.3 million pounds of monitors, and received at least an additional million from M-Stream, between 2008 and 2016.
To hide the monitors, Zirkle and Lorch directed employees to stash them at a secret location on Harbor Island, away from Total Reclaim’s HQ in Seattle, until M-Stream shipped them off. The two men also falsified documents and gave false information to customers and auditors.
Once the monitors were in Hong Kong, “they were transported to outdoor processing centers, where mainland Chinese laborers dismantled the monitors through a primitive process that involved opening mercury-containing LCDs, smashing them apart and throwing the aluminum, plastic and circuitry into different piles or containers,” charging documents read. “No precautions were taken with these mercury-laden tubes, resulting in the release of mercury into the workplace and broader ecosystem.”
Exposure to mercury can lead to a number of serious health issues, including organ damage, nerve damage, and mental impairment.
The non-profit organization Basel Action Network (BAN) discovered the conspiracy in 2014.
BAN, which oversees the e-Steward program, put trackers on the monitors and followed them to Hong Kong, the Justice Department’s press release stated. When BAN confronted Zirkle and Lorch, the two gave the non-profit falsified shipping documents. BAN, unconvinced, published an Evidentiary Report May 2016.
Lorch and Zirkle responded with a public statement.
“Under the immense pressures of a very difficult market for our services, we lost sight of our values and made business decisions that were contrary to the certification and standards we had agreed to meet,” they said, characterizing their business with M-Stream as a “short-term business decision.” “We take no issue with the factual findings of the e-Stewards Evidentiary Report. Rather we apologize for failing to live up to our commitments and pledge to rebuild our status as an industry leader and rebuild the trust of the e-Stewards organization, our customers, and the public.”
Charges were officially filed Nov. 14, 2018.
Lorch declined to comment about the guilty plea, except for a written statement.
“Friday’s guilty pleas by the owners of Total Reclaim follow their prior and public acknowledgement of a breach of customer trust,” Lorch wrote. “That conduct is in the distant past. Total Reclaim and its owners have since recommitted themselves to abide by the highest ethical standards and strive daily to find innovative and responsible solutions to help the Pacific Northwest recycle some of the most challenging items in the waste stream.”
A sentencing hearing is scheduled for Feb. 1, 2019, but is likely to be moved further into the future, the United State’s Attorney’s Office in Seattle said.
In addition to what the court will levy against Zirkle and Lorch in terms of fines and jail time, and the $1.1 million the two men agreed to pay back, Washington’s Department of Ecology fined Total Reclaim $444,000 in 2016 for shipping the LCD monitors overseas, as well as $67,500 in 2017 for illegally storing the monitors on Harbor Island.
Total Reclaim settled the two penalties and agreed to pay $83,625 in penalties and another $300,000 to the Western States Project, “an interstate consortium that supports environmental enforcement education and training,” a Department of Ecology press release stated.