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Maine accuses three of bottle-refund fraud

Distributors say they lose millions

By Clarke Canfield
Associated Press / February 12, 2011

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PORTLAND, Maine — A memorable “Seinfeld’’ episode features Kramer and Newman taking thousands of cans and bottles to Michigan so they can get a nickel more per container than they would in New York, but beverage distributors say there is nothing funny when it happens for real.

In Maine, which has a more expansive bottle-redemption law than neighboring states, three people have been accused of illegally cashing in more than 100,000 out-of-state bottles and cans for deposits, the first time criminal charges have been filed in the state over bottle-refund fraud, a prosecutor said.

A couple that runs a Maine redemption center and a Massachusetts man were indicted this week on charges of redeeming beverage containers in Maine that had been bought in other states.

Thomas and Megan Woodard, who run Green Bee Redemption in Kittery, face the more serious charge of passing off more than 100,000 out-of-state containers, with a value of more than $10,000, as if they had been purchased in Maine.

An estimated 90 million cans and bottles are fraudulently cashed in each year in Maine, costing beverage distributors $8 million to $10 million, said Newell Augur, executive director of the Maine Beverage Association.

People from other states — especially New Hampshire, which has no bottle law — routinely redeem cans and bottles in Maine, Augur said. Redemption centers pay customers 5-cent refunds on most beverage containers and 15 cents for wine and liquor bottles. The centers, in turn, get that money back from distributors, plus a 3- or 4-cent handling fee per container.

In the 1996 “Seinfeld’’ episode, Kramer and Newman hatch a plan to drive a truckload of cans and bottles to Michigan, because the redemption fee there was 10 cents, double New York’s nickel deposit.

Officials estimate that up to 1 billion beverage containers are sold in Maine each year. Containers sold in other states, however, carry the Maine deposit stamp because it is not cost-effective to change labeling for each state.

The Woodards are accused of knowingly accepting containers at their redemption center that were purchased in another state and therefore not eligible for a refund in Maine, and then selling them to distributors for the combined handling and redemption fees. They did not return a call seeking comment.

Peter Prybot, a 62-year-old lobsterman and writer from Gloucester, Mass., denied the allegations in the indictment, which charges him with redeeming more than $1,000 of empty containers in Maine that were not eligible.

Prybot said he accumulated cans and bottles during road trips to Maine and later cashed them, but said they all came from Maine.