{"id":88280,"date":"2018-01-27T05:27:12","date_gmt":"2018-01-27T10:27:12","guid":{"rendered":"http:\/\/madisoncountycourier.com\/?p=88280"},"modified":"2018-01-26T11:38:18","modified_gmt":"2018-01-26T16:38:18","slug":"schneiderman-cuomo-announce-largest-ever-penalty-against-beverage-distributor-for-violating-new-yorks-bottle-bill","status":"publish","type":"post","link":"https:\/\/madisoncountycourier.com\/?p=88280","title":{"rendered":"Schneiderman, Cuomo announce largest-ever penalty against beverage distributor for violating New York\u2019s Bottle Bill"},"content":{"rendered":"

\"\"Schneiderman, Cuomo announce largest-ever penalty against beverage distributor for violating New York\u2019s Bottle Bill<\/strong><\/p>\n

North Bergen Beverage to pay $500,000 for allegedly breaking the law by persistently, repeatedly, and knowingly selling regulated beverages in NY for which deposits were not collected; company must pay state additional $50,000 for state\u2019s investigation costs, suspend sales in NY of all products covered by bottle bill for three years<\/em><\/p>\n

Attorney General Eric T. Schneiderman and Governor Andrew Cuomo announced the largest-ever penalty obtained for alleged violations of New York\u2019s Returnable Container Act, otherwise known as the Bottle Bill.<\/p>\n

The court-ordered settlement<\/a>, which was ordered by the New York County Supreme Court, requires New Jersey-based North Bergen Beverage to pay the state a total of $550,000 in penalties and costs \u2013 including $400,000 in new penalties on top of a previous payment of $100,000, as well as $50,000 for the cost of the state\u2019s investigation of this matter.\u00a0The $500,000 in total penalties being paid by North Bergen Beverage is more than three times greater than the previous largest-ever penalty paid by a beverage distributor for alleged violations of New York\u2019s Bottle Bill.<\/p>\n

North Bergen Beverage is also required to suspend its sales in New York of all beverages covered by the Bottle Bill for three years.\u00a0In addition, if the company violates the court-ordered settlement by selling any regulated beverage during the three-year no-sale period, it would be required to pay the state an additional penalty of $400,000.<\/p>\n

Pursuant to the Bottle Bill, the penalties paid by North Bergen Beverage will be directed to New York\u2019s Environmental Protection Fund, a source of funding for capital projects that protect the environment and enhance communities.<\/p>\n

\u201cNew York\u2019s Bottle Bill is a hallmark environmental law \u2013 reducing litter, promoting recycling, and generating millions of dollars that benefit New Yorkers\u2019 health and environment each year,\u201d Schneiderman\u00a0said. \u201cAs we allege, North Bergen Beverage persistently, repeatedly, and knowingly broke the law. This largest-ever penalty and three-year suspension sends a clear message to all beverage distributors:\u00a0 if you do business in New York and break the Bottle Bill law, my office will hold you accountable.\u201d<\/p>\n

\u201cCompanies have a legal and ethical responsibility to comply with the state\u2019s environmental laws,\u201d Cuomo said.\u00a0\u201cThis case serves as a strong reminder that New York will continue its strong record of environmental protection and enforce the laws against any deceptive practice that takes advantage of consumers and puts the environment at risk.\u201d<\/p>\n

\u201cUnclaimed bottle deposits support important environmental programs that protect the state\u2019s environment, reduce waste disposed in landfills and save energy,\u201d DEC Commissioner Basil Seggos\u00a0said. \u201cCompanies operating in New York have a responsibility to comply with the state\u2019s environmental laws, and I commend DEC investigators and our partners in the Attorney General\u2019s Office for taking decisive action in the North Bergen beverage case.\u201d<\/p>\n

Investigations by the Attorney General\u2019s Office and the state Department of Environmental Conservation Police revealed that between 2013 and 2016, North Bergen Beverage sold millions of containers of regulated beverages in New York, for which the required deposit was not collected and placed into a dedicated account, as is required for all regulated beverages intended for sale in the state.\u00a0The Bottle Bill requires that a portion of deposits placed in that account and not redeemed be remitted to the state. By flooding the New York market with these beverages, North Bergen Beverage allegedly undermined the law, gained an unfair price advantage over competitors playing by the rules and denied the state revenue.<\/p>\n

New York\u2019s Bottle Bill, which regulates carbonated soft drinks, water, beer, other malt beverages and wine coolers sold in containers of less than one gallon in size, has been one of the state\u2019s most effective recycling and litter-prevention programs.\u00a0According to the DEC, the law has reduced roadside container litter by 70 percent.\u00a0In 2016, the law helped to recycle 5.1 billion plastic, glass and aluminum beverage containers totaling more than 336,000 tons; at no cost to local governments.<\/p>\n

Additionally, the DEC estimates that the program eliminates 200,000 metric tons of greenhouse gases annually.<\/p>\n

The Bottle Bill requires that beverage containers covered by the law carry a label indicating a New York deposit of at least five cents, and that a deposit be collected on every one of these beverage containers sold in the state.\u00a0The entity that first sells or offers the beverage for sale in the state and collects the first deposit, is the \u201cdeposit initiator.\u201d\u00a0Distributors, such as North Bergen Beverage, who typically buy from deposit initiators and then resell them to retailers \u2013 as well as retailers who sell directly to consumers \u2013 must also charge a deposit for each container sold.\u00a0Once the beverage is consumed and the container is returned to a retailer or redemption center, the process is reversed so that each party who paid a deposit in the process is refunded their deposit.<\/p>\n

The deposit initiator must register with the state Department of Taxation and Finance before selling in the state, and also maintain a refund account into which the deposits collected on the first sale of the beverage in New York are placed.\u00a0When returned containers reach the beverage initiator, funds are taken out of the account to refund deposits.\u00a0Since not all containers first sold or offered for sale are returned to the deposit initiators, on a quarterly basis, they must remit to the state 80 percent of the unclaimed deposits held in the refund account.<\/p>\n

Based on the investigation conducted by the Attorney General\u2019s Office and DEC, in October 2016, Schneiderman filed a lawsuit in New York County Supreme Court against North Bergen Beverage<\/a>\u00a0\u2013 doing business under several names, including Fly Fly, Beverage Plus and its principal, Steven Arillo.\u00a0The suit alleged that the company sold beverages in New York for which a deposit had not been initiated, in violation of the law.\u00a0The state additionally alleged that North Bergen Beverage sold beverages for which a deposit had been initiated in New York without collecting the required deposit.<\/p>\n

The state believes that through these alleged illegal activities, North Bergen Beverage created an unfair price advantage for its products over its competitors in New York. Further, by flooding its New York market with beverage containers for which a deposit was never initiated, North Bergen Beverage caused the refund accounts of registered deposit initiators to be reduced when the \u201cnon-initiated\u201d containers the company sold into New York were redeemed.\u00a0Since deposit initiators are required to remit 80 percent of all unclaimed deposits to the state, the lawsuit charges that the reductions in refund accounts caused by North Bergen Beverage\u2019s allegedly illegal activities resulted in the State being deprived of revenue.<\/p>\n

Beer, soda and other beverages covered by the Bottle Bill typically bear a multi-state deposit stamp that includes New York, and also other deposit states such as Connecticut, Massachusetts and Iowa.\u00a0The multi-state deposit stamp does not necessarily mean that the beverage has been initiated with a deposit in New York, particularly when sold outside New York.\u00a0The state\u2019s investigation confirmed that large-volume beverage sellers in non-deposit New Jersey, which do sell beverages with the multi-state stamp, typically do not stock and sell New York-initiated beverages \u2013 and therefore do not charge deposits.<\/p>\n

In 2014, Schneiderman obtained a $160,000 payment from another New Jersey-based company, FID Distributors and an $80,000 payment from a Monroe County company, The Juice Factory Corp., both for failing to register as deposit initiators and opening refund deposit accounts, while repeatedly collecting deposits, thus evading the required payment of a portion of unclaimed deposits to the state.\u00a0At the time, the payment that Schneiderman obtained from FID Distributors was the largest payment made by a beverage distributors for alleged violations of the state\u2019s Bottle Bill.<\/p>\n

Schneiderman thanks the DEC for its assistance.<\/p>\n

This case is being handled by Senior Enforcement Counsel Andrew Gershon, Assistant Attorneys General John Turrettini and Mandy DeRoche, and Deputy Bureau Chief Monica Wagner of the Environmental Protection Bureau, with assistance from Department of Research and Analytics Data Intern Matthew Lehran. The Environmental Protection Bureau is led by Lemuel M. Srolovic and is part of the Division of Social Justice, which is led by Executive Deputy Attorney General for Social Justice Matthew Colangelo.\u00a0DEC Senior Attorney Cristin Clarke, Deputy Counsel Scott Crisafulli, Major Scott Florence, Bureau of Environmental Crime Investigations Lieutenant Jesse Paluch and Investigator Sara Komonchak, and Environmental Conservation Officer Jeannette L. Bastedo assisted in this matter.<\/p>\n","protected":false},"excerpt":{"rendered":"

Schneiderman, Cuomo announce largest-ever penalty against beverage distributor for violating New York\u2019s Bottle Bill North Bergen Beverage to pay $500,000 for allegedly breaking the law by persistently, repeatedly, and knowingly selling regulated beverages in NY for which deposits were not collected; company must pay state additional $50,000 for state\u2019s investigation costs, suspend sales in NY […]<\/p>\n","protected":false},"author":2,"featured_media":70131,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[32,8],"tags":[],"class_list":["post-88280","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crime","category-top-story"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack-related-posts":[],"jetpack_shortlink":"https:\/\/wp.me\/p43meu-mXS","jetpack_featured_media_url":"https:\/\/i0.wp.com\/madisoncountycourier.com\/wp-content\/uploads\/2016\/06\/Attorny_General_Eric_T_Schneiderman.jpg?fit=260%2C221&ssl=1","_links":{"self":[{"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=\/wp\/v2\/posts\/88280","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=88280"}],"version-history":[{"count":0,"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=\/wp\/v2\/posts\/88280\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=\/wp\/v2\/media\/70131"}],"wp:attachment":[{"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=88280"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=88280"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/madisoncountycourier.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=88280"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}