Troubled past taints city scrapyard business
Stolen statue discovery recalls former complaints
It was a whodunit with all the makings of a mystery novel.
A beloved statue gone. A community up in arms. No major leads.
But the supposed end of this tale — a Bay Area News Group reporter found the statue next to a Coke machine in the office of a San Jose scrapyard — only led to more questions over its tantalizing disappearance.
How did the figurine of the 1600s-era Indian warrior Chhatrapati Shivaji Maharaj — a gift from San Jose's sister city of Pune in India — end up in the scrapyard at Tung Tai Group? To those in the know, it was not a surprising destination for ill-gotten goods, since the business has a notorious history of run-ins with the law over the past 16 years, according to public records and court documents reviewed by the Bay Area News Group.
Over that stretch, the Rogers Avenue scrapyard's owner, 82-year-old Joseph Chen, has been involved in a police sting to retrieve stolen copper, faced felony charges for defrauding the state out of a million dollars, and paid hefty fines for purchasing illegal Cuban metal and breaking environmental regulations on two separate occasions.
Tung Tai Group's legal issues grew this past year. Since last February, Chen's business has been locked in a battle with the city over a public nuisance shut-down order based on allegations that it acts as a fencing operation for stolen catalytic converters throughout Northern California and fuels a surge in property crimes in the South Bay — accusations Chen's attorney dismiss as “nothing more than shoddy police work.”
Chen, who has been operating in San Jose for more than four decades and owns a $7 million home in the suburb of Hillsborough near San Mateo, declined to comment for this article. His lawyer, San Jose-based business attorney Jim Roberts, said Tung Tai Group “strives to be a good community member” and was pleased the statue was recovered.
“Tung Tai Group is cooperating with police,” Roberts said. “It has a history of cooperating with the police.”
As for the metal statue, which was reported missing from Guadalupe River Park on Jan. 31, Roberts said individuals tried to sell it to the scrapyard, and when the company declined, they left it out on the curb. Scrapyard workers then retrieved the statue and stored it in the office. No attempt was made to contact the city about the statue, Roberts said, because the company had no idea it was stolen, despite the fact that the story of the theft had been on the front page of The Mercury News and reported on by a couple of local TV stations.
Police are currently investigating the statue's theft and didn't have any updates to provide.
When asked about the company's past and ongoing legal and environmental troubles, Roberts chalked them up to the recycling industry's tough regulatory environment.
“You cannot operate in this field and not have intense government scrutiny,” he said. “Some of it has a purpose. Some of it is overreaching.”
Some in San Jose's recycling industry have long been wary of Tung Tai Group. A longtime scrapyard worker in the city — who requested anonymity due to concerns of retaliation — described many positive interpersonal interactions with Chen, but also said, “a lot of companies try to stay away and not do business with him.”
Surrounded by a fence topped with barbed wire, Chen's Tung Tai Group sits in a heavily industrial neighborhood near San Jose Mineta International Airport. Customers regularly drive in and out of the shop, dropping off scrap metal and wire out of their car trunks. A cluster of RVs are parked near the entrance of Tung Tai Group, and on a recent February morning a man on the sidewalk was cutting pieces of copper with a reciprocating saw. Satellite views of the site from years past show heaps of metal scraps strewn around the exterior of Tung Tai Group's office, a scruffy two-story tan building.
Established in 1982, Tung Tai secured an early foothold in the Chinese recycling market, according to a 2006 industry profile of Chen and his company. At one point, the business operated in multiple Chinese cities, according to Chen's attorney, but has since shifted away from the country.
Tung Tai Group came under scrutiny by law enforcement at least as early as 2007 during a police sting of recycling shops in San Jose and Santa Clara. Authorities accused a handful of businesses, including Tung Tai, of receiving stolen copper wire and milk crates. Seven business owners were arrested, but Chen was not among them, according to a Mercury News article at the time.
Three years later, Chen and two managers at Tung Tai Group were accused of defrauding the state out of $1 million after submitting false reimbursement claims for over 2 million pounds of scrap that were never recycled. Then-Attorney General and former Gov. Jerry Brown described the incident as a “brazen scheme.”
In a felony plea bargain, Chen and the employees were ordered to pay $125,000 to county and state officials, agree not to deal in certain electronic waste and complete a refresher course on hazardous waste regulations.
In 2013, the company was fined $43,875 by federal authorities after entering into a contract that involved Cuban metal. Officials said the underlying details of the deal weren't clear and later determined it was a “non-egregious” incident. Tung Tai Group's attorney says the company thought it was ordering metal from the Dominican Republic.
In 2013 and again in 2021, Tung Tai Group was fined a total of $75,000 for environmental violations, including failure to contain waste properly and for spilling oil at the site.
Then, in 2021, legal problems for the company took a new turn. The scrapyard came under the microscope of the San Jose Police Department's Burglary Prevention Unit, with authorities claiming in court filings that they identified illegal activity at Tung Tai Group during an undercover campaign dubbed Operation Cat Scratch Thiever.
The operation sought to fight back against rising catalytic converter thefts, which, according to the city, had swelled from 84 cases in 2019 to 1,087 in 2021. The car part, which controls vehicle emissions, contains precious metals that can fetch up to $150 in cash for thieves who sell the devices on the black market.
In multiple instances, undercover officers claim they sold stolen property to Tung Tai Group that included catalytic converters, copper wire and internet routers — all without any identification and paperwork required by law. Officers also accused the scrapyard of offering them the ability to obscure their identities to help bypass purchasing regulations.
While two other employees directly negotiated prices for the items, Chen had the final say on the price, authorities claim. A parallel criminal case was also filed against Chen — but the charges were later dismissed because of insufficient evidence, according to the district attorney's office.
In court filings regarding the public nuisance order, attorney Roberts says undercover officers asked Chen if they could bring him some “cats” — short for catalytic converters. Chen — whose attorney described him in court papers as elderly, hard of hearing and with limited English abilities — is said to have pointed to a feral cat at the scrapyard. When pressed further, Chen apparently walked away from the undercover officer. Chen's attorney says that the only transaction of catalytic converters occurred with the other employee named in the public nuisance order — a forklift driver whom Roberts says Tung Tai Group later suspended.
As for the future of Chen's almost 40-plus-yearold company in San Jose, Santa Clara Superior Court Judge Christopher G. Rudy in December denied Tung Tai Group's objections to the public nuisance order.
San Jose City Attorney Nora Frimann, whose office is overseeing the case, said it will typically try to reach a resolution through a settlement agreement, a fine and an injunction. An injunction, she said, would mean that any future violations by the company would lead to more penalties.
For Mayor Matt Mahan, who's promised residents that he will cut back on the city's crime and blight, Tung Tai Group's past — along with the statue's discovery at the site — has him “extremely concerned” about the business.
“Our city attorney and police department,” he said, “will do everything in their power to ensure that this and other businesses in San Jose comply with our laws.”