Three people connected to a Ladysmith e-waste recycling company, 5R Processors Ltd., are facing criminal charges in federal court.
Owner Thomas Drake, 80, of Jasper, Georgia and corporate officers James Moss, 61, of Ladysmith and Bonnie Dennee, 66, of Phillips each face a charge of conspiracy to store and transport hazardous waste without the required permits and manifests. The information filed against Moss also charged him with conspiracy to evade the payment of employment taxes and income taxes to the Internal Revenue Service.
Plea agreements were filed with information on the charges May 21, according to a release from U.S. Attorney Scott Blader with the Western District of Wisconsin. The defendants agreed to plead guilty to the conspiracy charge. If convicted, the maximum penalty for the charge is five years in prison, restitution, and a $250,000 fine.
According to the information, Drake founded the corporation in 1988. The business recycled electronic equipment and appliances, operating a number of facilities and warehouses in Ladysmith, Glen Flora, Catawba and West Bend, Wisconsin and in Morristown, Tennessee. Drake served as chief executive officer and chairman of the board of directors; Moss had served as president since 2010 and Dennee worked in various positions, including executive vice-president, since she started working at 5R in 1997.
The business took apart electronic equipment and sorted the parts into commodities which could be resold. Cathode ray tubes taken from computer monitors and televisions were broken down and glass was separated between clean, salable glass and glass with lead in it. Until 2011, 5R paid vendors to dispose of the leaded CRT glass, which is considered hazardous waste.
The information alleges that between 2011 and 2016, the defendants conspired to knowingly store the leaded glass at unpermitted facilities in Catawba and Glen Flora, Wisconsin, and Morristown, Tennessee; transport it without a required manifest; and conceal the violations from state regulators in Wisconsin and Tennessee, as well as auditors with a nationwide recycling certification program.
The defendants allegedly attempted to conceal their illegal storage and transport of the crushed leaded glass by changing the date labels on the containers, hiding the containers in locked semi trailers, moving containers to the back of the warehouse and stacking other pallets in front of them, storing the containers in warehouses that were not disclosed to regulators and storing them in “dark side” warehouses without electricity or power.
The defendants agreed to plead guilty to the conspiracy charge. If convicted, the maximum penalty is five years in prison, restitution and a $250,000 fine.
In addition, Moss agreed to plead guilty to a conspiracy to defraud the IRS in the collection of $858,000 in employment taxes and income taxes for 5R and two other related companies, Wisconsin Logistic Solutions (WLS) and Pure Extractions. The maximum penalty for the charge is also five years in prison, restitution and a $250,000 fine.
The charges were the result of an investigation conducted by the Wisconsin Department of Natural Resources, Bureau of Law Enforcement; the U.S. Environmental Protection Agency, Criminal Investigation Division; and IRS Criminal Investigation.