The “King of Cardboard” — who officials say made millions by stealing the valuable recyclable from city curbs — has been dethroned, The Post has learned.
The city’s Business Integrity Commission voted this morning to strip Brooklyn waste hauling magnate Dzaguily Sy of his license to operate his Greenpoint-based company, Diag Express Trucking, because he has been routinely ordering his drivers and helpers to swipe bundled curbside cardboard — worth about $100 per ton — for illegal sale to recycling plants.
Nearly every pre-dawn morning of the week, Sy would send his trucks throughout the Upper East Side, Harlem, Washington Heights and around Yankees Stadium – where his workers would plunder the stacks of cardboard recycling from retail chains including Wallgreens, Duane Reade and Payless Shoe Source, according to BIC reports obtained by The Post.
The stolen cardboard rightfully belonged to legitimate trash haulers, the agency said.
Sy, who is not being charged criminally, could not immediately be reached for comment; the loss of his business license means he can no longer operate in New York City and must close down or sell, unless he wins a court appeal, a BIC spokesman said.
“Today’s decision is a big win against recycling theft and an indication of how seriously we take this issue, said BIC Commissioner Shari Hyman, whose agency monitors the waste hauling industry.
“In this business, it’s essential to preserve a level playing field for those that play by the rules,” she said.
For nearly six years, Sy reigned as the city’s most prodigiously successful cardboard poacher, according to BIC records detailing the agency’s lengthy investigation into Sy’s operation.
“Multiple employees of [Sy] have told Commission investigators that they engaged in cardboard theft at the behest of Mr. Sy,” records say.
As part of their probe, BIC investigators conducted surveillance on a Diag trucker on June 25 and June 26.
The investigators watched as the driver and several helpers grabbed cardboard from multiple businesses not on their route, including a Walgreens, a Duane Reade, an Edible Arrangements and a Payless Shoe Store, BIC records state.
These businesses had contracted with other legitimate waste haulers to pick up their garbage and the valuable cardboard, but Diag’s drivers were routinely showing up first, usually between the hours of midnight and 3 a.m., beating the legitimate carters to the punch, a source explained.
Once on the scene, the Cardboard King’s minions grabbed the cardboard and stuffed it into Diag trucks that were driven to recycling plants, where the cardboard would be weighed and re-sold, earning Diag Express Trucking tens of thousands of dollars monthly that rightfully belonged to the legitimate haulers, BIC records state.
As part of the investigation, BIC probers “flipped” one of the corrupt drivers in July and got him to testify about the June heists, BIC records state.
The driver, whose identity was kept confidential, later testified that Sy — who he commonly referred to as “Jack” – had hired him the previous month, while setting a quota for stolen cardboard.
“He was directed by ‘Jack,’ or Mr. Sy, to collect nine tons of cardboard every night for six nights a week,” the BIC ruling states.
“The Driver further testified that ‘Jack’ told him to pick up any cardboard he saw on the street, to ‘basically get [the cardboard] every way we could find [it],” BIC records state.
BIC investigators also examined the “dump tickets” – receipts showing how much cardboard was being picked up and re-sold daily.
During one three-week period in June, although the company “only had 14 customers at the time,” a single driver “unloaded approximately 30 tons of cardboard per week” at two recycling plants.
Those 14 customers — three Metro PC cell phone retailers; two shoe stores; one fruit and vegetable stand and eight “99 centstores” — couldn’t have possibly produced as much cardboard as Diag was getting paid for, BIC said.
The Cardboard King, meanwhile, is abdicating responsibility.
Sy testified he was unaware his drivers were stealing cardboard, a claim the agency termed “nonsensical.”
In a bid to illustrate his irresponsible behavior, the commission noted that Sy’s driver license had been suspended 25 times since November 2008.
The commission also concluded that despite his “self-serving” testimony, he “was clearly aware that he was being remunerated by transfer stations for far more cardboard than could have been generated by his customers.”
Although Diag appears go have fallen on hard times lately, the stolen cardboard significantly helped to fatten the firm’s bottom line — Diag’s financial statements show the company reported a stunning $900,514.32 in cardboard income in 2011 and $889,904.02 in 2010.
Diag’s drivers were found guilty by BIC for earlier instances of cardboard in October 2009 and September 2011, BIC records state.
Diag was also hit with a multitude of regulatory infractions, failing to pay fines and various taxes, according to BIC records.
Most recently, the company was deemed guilty in June for failing to post its license number on an Internet ad and failing to maintain its registry of clients, offenses that resulted in fines of $1,000 and $5,000, respectively, according to BIC records.
Cardboard poaching by corrupt carters is a widespread economic problem that defrauds legitimate local waste carters out of an estimated $8 to $10 million yearly, according to the National Solid Wastes Management Association, an industry trade group.
In June, after more than a year of lobbying by the NSWMA, the City Council passed a law amending the administrative code, making it unlawful to remove cardboard and other recyclables from licensed haulers’ customers.
Tom Toscano, NSWMA New York City Chapter Chair and the chief financial officer at Mr. T Carting, of Glendale, N.Y., said at the time the new penalties were warranted.
“The daily theft of cardboard hurts our entire industry, from small family-owned hauling operators to larger firms who lose the revenue, and their customers that feel the loss in greater fees,” said Toscano.