Score:   1
Docket Number:   WD-WA  2:18-cr-00277
Case Name:   USA v. Lorch et al
  Press Releases:
          The owners and Chief Executive Officers of Total Reclaim, the Northwest’s largest recycler of electronic waste, were sentenced today in U.S. District Court in Seattle to 28 months  in prison and three years of supervised release for conspiracy to commit wire fraud.  At the sentencing hearing, U.S. District Judge Richard A. Jones noted that with the men’s conduct could have impacted generations with mercury poisoning.  “Your conduct spanned seven years and only stopped because you were caught.  You had multiple opportunities to say enough is enough,” Judge Jones said.

          CRAIG LORCH, 61, of Seattle, and JEFF ZIRKLE, 55, of Bonney Lake, Washington, earned millions of dollars through Total Reclaim by promising to recycle safely electronic products such as flat screen monitors.  In marketing Total Reclaim’s services, LORCH and ZIRKLE warned that the products contained hazardous materials that can cause serious health conditions if processed in unsafe conditions such as those that exist in developing countries in Asia.  LORCH and ZIRKLE promised customers that Total Reclaim would not export electronic waste to developing countries.  But, in fact, the defendants secretly caused over 8 million pounds of mercury-containing flat screen monitors to be exported to Hong Kong, where they were demolished in an environmentally unsafe manor. 

          “Motivated by greed, these defendants betrayed every pledge they made to be good environmental stewards,” said First Assistant U.S. Attorney Tessa M. Gorman.  “They protected their salaries of more than a million dollars a year, while harming the environment and risking the lives of disadvantaged Chinese workers who struggle daily just to support their families”

          Total Reclaim was the biggest participant in “E-Cycle Washington,” a program created by the Washington legislature to provide for the safe recycling of hazardous electronic products.  Under E-Cycle Washington, consumers drop off used electronics at stations such as Goodwill Industries free of charge.  The program then paid Total Reclaim to recycle the electronics according to Washington Department of Ecology standards.  Those standards bar recyclers from sending hazardous electronics products overseas.    

          According to records filed in the case, Total Reclaim promoted itself as a responsible electronics recycler.  Total Reclaim’s website stated that “our commitment to environmental responsibility is at the core of everything Total Reclaim does.”  Total Reclaim signed a public pledge in which it promised not to “allow the export of hazardous E-waste we handle to be exported” to developing countries, where workers are known to disassemble electronics, which contain dangerous materials such as mercury, without safety precautions.  Total Reclaim signed agreements with customers, such as the City of Seattle, in which the customers agreed to pay Total Reclaim to recycle electronics in accordance with these standards.  According to court filings, it would have cost Total Reclaim about $2.6 million to appropriately dispose of the monitors.

          In 2008, contrary to its promises to the public, Total Reclaim began secretly exporting flat screen monitors to Hong Kong to avoid the cost of safely recycling the monitors in the United States.  Flat screen monitors are known to contain mercury, which can cause organ damage, mental impairment, and other serious health consequences to people exposed to the material.  LORCH and ZIRKLE caused at least 8.3 million pounds of monitors to be shipped to Hong Kong between 2008 and 2015.  To prevent customers and auditors from learning of the practice, LORCH and ZIRKLE   falsified documents, made false statements to customers, and stored the monitors at an undisclosed facility while they awaited shipping. 

          Defendants’ fraud was discovered in 2014 by a non-governmental organization known as the Basel Action Network (“BAN”).  BAN, which studies the export of electronic waste, placed electronic trackers on flat screen monitors and deposited them for recycling.  The trackers showed that the monitors were collected by Total Reclaim and then exported to Hong Kong.  When BAN representatives followed the tracking devices to Hong Kong, they discovered that the monitors were being dismantled by laborers who smashed the monitors apart without any precautions to protect the workers or the environment.  After BAN notified LORCH and ZIRKLE of its findings, LORCH and ZIRKLE tried to cover up their fraud by altering hundreds of shipping records. 

          LORCH and ZIRKLE have agreed to pay $945,663 in restitution.

          As prosecutors wrote in their sentencing memorandum, this case is more than a financial fraud.  “Lorch and Zirkle’s crime has all the hallmarks of a classic financial fraud.  It includes lies to customers and auditors, the falsification of hundreds of documents, millions of dollars in ill-gotten gains, and a cover-up after the fraud was discovered.  But this offense stands apart from the typical fraud because the greatest damage is not measured in dollars and cents.  Rather, it lies in the health consequences that resulted from defendants’ calculated choice to prioritize their own economic well-being over the health of faceless foreign workers.”

          The case was investigated by the Environmental Protection Agency Criminal Investigation Division (EPA-CID).  The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.

The owners and Chief Executive Officers of Total Reclaim, the Northwest’s largest recycler of electronic waste, pleaded guilty today in U.S. District Court in Seattle to conspiracy to commit wire fraud, announced U.S. Attorney Annette L. Hayes. 

CRAIG LORCH, 61, of Seattle, and JEFF ZIRKLE, 55, of Bonney Lake, Washington, admitted that they collected millions of dollars from public agencies and other organizations by falsely telling them that Total Reclaim would recycle used electronics products domestically in an environmentally-safe manner.  In fact, the defendants secretly shipped millions of pounds of mercury-containing flat screen monitors to Hong Kong, where the monitors were dismantled in a manner that risked serious health consequences to workers, and damage to the environment.  The two men face up to five years in prison when sentenced by U.S. District Judge Richard A. Jones on February 1, 2019.  LORCH and ZIRKLE have also 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,” said U.S. Attorney Annette L. Hayes.  “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 is the largest e-waste recycler in the northwestern United States,” said Special Agent in Charge Jeanne M. Proctor of EPA’s Criminal Investigation Division. “During an eight-year period, the company exported to Hong Kong millions of pounds of electronic products containing mercury, while fraudulently reporting to customers and state agencies that they were being appropriately recycled.”

According to records filed in the case, Total Reclaim promoted itself as a responsible electronics recycler.  Total Reclaim’s website stated that “our commitment to environmental responsibility is at the core of everything Total Reclaim does.”  Total Reclaim signed a public pledge in which it promised not to “allow the export of hazardous E-waste we handle to be exported” to developing countries, where workers are known to disassemble electronics, which contain dangerous materials such as mercury, without safety precautions.  Total Reclaim signed agreements with customers, such as the City of Seattle, in which the customers agreed to pay Total Reclaim to recycle electronics in accordance with these standards.  Total Reclaim was also the biggest participant in the “E-Cycle Washington” program.  E-Cycle Washington allows consumers to drop off used electronics at stations such as Goodwill Industries, and pays companies like Total Reclaim to recycle to those electronics according to Washington Department of Ecology standards. 

In 2008, contrary to its promises to the public, Total Reclaim began secretly exporting flat screen monitors to Hong Kong to avoid the cost of safely recycling the monitors in the United States.  Flat screen monitors are known to contain mercury, which can cause organ damage, mental impairment, and other serious health consequences to people exposed to the material.  LORCH and ZIRKLE caused at least 8.3 million pounds of monitors to be shipped to Hong Kong between 2008 and 2015.  To prevent customers and auditors from learning of the practice, LORCH and ZIRKLE falsified documents, made false statements to customers, and stored the monitors at an undisclosed facility while they awaited shipping. 

Defendants’ fraud was discovered in 2014 by a non-governmental organization known as the Basel Action Network (“BAN”).  BAN, which studies the export of electronic waste, placed electronic trackers on flat screen monitors and deposited them for recycling.  The trackers showed that the monitors were collected by Total Reclaim and then exported to Hong Kong.  When BAN representatives followed the tracking devices to Hong Kong, they discovered that the monitors were being dismantled by laborers who smashed the monitors apart without any precautions to protect the workers or the environment.  After BAN notified LORCH and ZIRKLE of its findings, LORCH and ZIRKLE tried to cover up their fraud by altering hundreds of shipping records. 

Conspiracy to commit wire fraud is punishable by up to 5 years in prison and a $250,000 fine.

The case was investigated by the Environmental Protection Agency Criminal Investigation Division (EPA-CID).  The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.

Docket (0 Docs):   https://docs.google.com/spreadsheets/d/1sGgTonHYPYhf6F8Fh6iF3yVO1ERZZHnnsXq-t6d97Uk/edit#gid=0
  Last Updated: 2019-10-19 08:35:00 UTC
Description: The fiscal year of the data file obtained from the AOUSC
Format: YYYY

Description: The code of the federal judicial circuit where the case was located
Format: A2

Description: The code of the federal judicial district where the case was located
Format: A2

Description: The code of the district office where the case was located
Format: A2

Description: Docket number assigned by the district to the case
Format: A7

Description: A unique number assigned to each defendant in a case which cannot be modified by the court
Format: A3

Description: A unique number assigned to each defendant in a case which can be modified by the court
Format: A3

Description: A sequential number indicating whether a case is an original proceeding or a reopen
Format: N5

Description: Case type associated with the current defendant record
Format: A2

Description: A concatenation of district, office, docket number, case type, defendant number, and reopen sequence number
Format: A18

Description: A concatenation of district, office, docket number, case type, and reopen sequence number
Format: A15

Description: The status of the defendant as assigned by the AOUSC
Format: A2

Description: A code indicating the fugitive status of a defendant
Format: A1

Description: The date upon which a defendant became a fugitive
Format: YYYYMMDD

Description: The date upon which a fugitive defendant was taken into custody
Format: YYYYMMDD

Description: The date when a case was first docketed in the district court
Format: YYYYMMDD

Description: The date upon which proceedings in a case commenced on charges pending in the district court where the defendant appeared, or the date of the defendant’s felony-waiver of indictment
Format: YYYYMMDD

Description: A code used to identify the nature of the proceeding
Format: N2

Description: The date when a defendant first appeared before a judicial officer in the district court where a charge was pending
Format: YYYYMMDD

Description: A code indicating the event by which a defendant appeared before a judicial officer in the district court where a charge was pending
Format: A2

Description: A code indicating the type of legal counsel assigned to a defendant
Format: N2

Description: The title and section of the U.S. Code applicable to the offense committed which carried the highest severity
Format: A20

Description: A code indicating the level of offense associated with FTITLE1
Format: N2

Description: The four digit AO offense code associated with FTITLE1
Format: A4

Description: The four digit D2 offense code associated with FTITLE1
Format: A4

Description: A code indicating the severity associated with FTITLE1
Format: A3

Description: The FIPS code used to indicate the county or parish where an offense was committed
Format: A5

Description: The date of the last action taken on the record
Format: YYYYMMDD

Description: The date upon which judicial proceedings before the court concluded
Format: YYYYMMDD

Description: The date upon which the final sentence is recorded on the docket
Format: YYYYMMDD

Description: The date upon which the case was closed
Format: YYYYMMDD

Description: The number of days from the earlier of filing date or first appearance date to proceeding date
Format: N3

Description: The number of days from proceeding date to disposition date
Format: N3

Description: The number of days from disposition date to sentencing date
Format: N3

Description: The code of the district office where the case was terminated
Format: A2

Description: A code indicating the type of legal counsel assigned to a defendant at the time the case was closed
Format: N2

Description: The title and section of the U.S. Code applicable to the offense that carried the most severe disposition and penalty under which the defendant was disposed
Format: A20

Description: A code indicating the level of offense associated with TTITLE1
Format: N2

Description: The four digit AO offense code associated with TTITLE1
Format: A4

Description: The four digit D2 offense code associated with TTITLE1
Format: A4

Description: A code indicating the severity associated with TTITLE1
Format: A3

Description: The code indicating the nature or type of disposition associated with TTITLE1
Format: N2

Description: The number of months a defendant was sentenced to prison under TTITLE1
Format: N4

Description: A code indicating whether the prison sentence associated with TTITLE1 was concurrent or consecutive in relation to the other counts in the indictment or information or multiple counts of the same charge
Format: A4

Description: The number of months of probation imposed upon a defendant under TTITLE1
Format: N4

Description: A period of supervised release imposed upon a defendant under TTITLE1
Format: N3

Description: The fine imposed upon the defendant at sentencing under TTITLE1
Format: N8

Description: The total prison time for all offenses of which the defendant was convicted and prison time was imposed
Format: N4

Description: The total fine imposed at sentencing for all offenses of which the defendant was convicted and a fine was imposed
Format: N8

Description: A count of defendants filed including inter-district transfers
Format: N1

Description: A count of defendants filed excluding inter-district transfers
Format: N1

Description: A count of original proceedings commenced
Format: N1

Description: A count of defendants filed whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants terminated including interdistrict transfers
Format: N1

Description: A count of defendants terminated excluding interdistrict transfers
Format: N1

Description: A count of original proceedings terminated
Format: N1

Description: A count of defendants terminated whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1

Description: A count of defendants pending as of the last day of the period including long term fugitives
Format: N1

Description: A count of defendants pending as of the last day of the period excluding long term fugitives
Format: N1

Description: The source from which the data were loaded into the AOUSC’s NewSTATS database
Format: A10

Description: A sequential number indicating the iteration of the defendant record
Format: N2

Description: The date the record was loaded into the AOUSC’s NewSTATS database
Format: YYYYMMDD

Description: Statistical year ID label on data file obtained from the AOUSC which represents termination year
Format: YYYY

Data imported from FJC Integrated Database
F U C K I N G P E D O S R E E E E E E E E E E E E E E E E E E E E