Michigan Officials Bust Bottle-Deposit Fraud Ring

DETROIT – They did what Kramer and Newman of "Seinfeld" could not.

Thirteen people have been arrested in connection with a smuggling ring that collected millions of beverage containers in other states and cashed them in for 10 cents apiece in Michigan as part of a scam straight out of a "Seinfeld" episode, authorities said Wednesday.

Authorities seized more than $500,000 in cash and 15 people were named in a 67-count warrant issued as part of Operation Can Scam, Attorney General Mike Cox said Wednesday. Some suspects were members of two smuggling rings based in Ohio and others were Michigan merchants who took part in the scheme, he said.

The probe recalled a 1996 episode of "Seinfeld" in which two characters learn about Michigan's 10-cent deposit law and head there with a truckload of 5-cent New York cans, hoping to cash in on the difference, before getting sidetracked.

"A half-million in cash is not 'Seinfeld' humor," Cox spokesman Matt Frendewey said.

Investigators alleged that millions of non-redeemable out-of-state cans were collected, crushed, packaged in plastic bags and sold at a discount to merchants who then redeemed them. Bulk redemption payments from the state are based on weight.

The scheme defrauded the Michigan Bottle Deposit Fund, whose proceeds are used to pay for environmental cleanup efforts, Cox said in a statement.

"Each year, this type of activity defrauds the state approximately $13 million," said Col. Peter Munoz, Michigan State Police director.

The charges include maintaining a continuing criminal enterprise, a 20-year felony, and fraud, a 5-year felony, the statement said.

The Associated Press contributed to this report.