M Corp Helps Crush Can Fraud

Californians are a recycling-happy group, often doing what’s best for the bottle or can – and the environment.

cans

But our green-friendly attitude also creates a green-seeking side from those looking to illegally bring out-of-state bottles and cans – primarily from Arizona and Nevada – into the Golden State in order to collect money from the California Redemption Value program. Quite often, the pennies paid when you purchase bottles or cans are being paid to crooks hauling truckloads of recyclables into the state.

CalRecycle hired M Corp to develop a flexible, impartial analysis model to enable a way to identify abuses of the program.

For example, an average rental truck – such as a Ryder or U-Haul – can carry about 10,000 pounds of bottles and cans, netting a nifty, albeit illegal, $15,000 payday.

So, CalRecycle, the state agency that administers the CRV program, hired M Corp to develop a flexible, impartial analysis model to enable a way to identify abuses of the program.

M Corp’s solution – referred to as DRAM (Disbursement Risk Assessment Model) is based on clustering methodology and programmed in SAS. DRAM analyzes years of shipping patterns of more than 3,000 recyclers and sorts them into clusters based on statistical similarities. CalRecycle uses the data to focus on clusters containing revoked accounts and greatly increases the likelihood of auditing – and finding illegal shipments.

The effort has been a success. CalRecycle can identify and manage recycling abuse, and better protect funding for the program. And, of course, the biggest benefit is that the state’s environment, energy and resources are being preserved.

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