‘Operation Can Scam’ Reveals Multimillion-Dollar Losses in Michigan

Published December 1, 2007

Michigan law enforcement officials say they have busted two crime rings that allegedly scammed the state out of hundreds of thousands of dollars in 10-cent redemptions on cans.

The state loses about $13 million a year to can fraud, according to a statement by Col. Peter Munoz, Michigan State Police director, who announced arrests in Operation Can Scam in late September.

The investigation resulted in a 67-count indictment against 15 Michigan and Ohio suspects.

Investigators say the suspects collected millions of non-redeemable cans from out of state, crushed them, packed them in plastic bags, and then sold them to Michigan merchants. Those merchants then redeemed the cans for a profit with the Michigan Bottle Deposit Fund, according to Michigan authorities.

Investigators recovered more than $500,000 in cash from the suspects.

Michigan collects a 10-cent deposit on bottles and cans and pays a like amount for redemptions. Bulk redemptions, like those allegedly used in the scam, are based on weight.

Michigan’s redemption program inspired an episode of the 1990s television comedy Seinfeld. Two characters hatch a get-rich-quick scheme involving use of a U.S. Postal Service truck to haul cans from New York, where they may be redeemed for 5 cents each, to Michigan and its 10-cents a can redemption. The escapade ends in failure.

Steve Stanek