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Non-compliance with scrap metal dealer laws carries consequences ranging from civil fines to felony charges. The severity depends on the state, the specific violation, and whether it is a first offense.
Penalty Tiers by Violation Type
| Violation | Typical Penalty Range | Criminal? |
|---|---|---|
| Operating without registration | $500–$5,000 fine; license denial | Misdemeanor in most states |
| Incomplete transaction records | $100–$1,000 per missing record | Civil violation usually |
| Failure to collect seller ID | $250–$2,500 per transaction | Civil or misdemeanor |
| Purchasing prohibited items | $1,000–$10,000; possible jail | Misdemeanor to felony |
| Cat conv without documentation | $2,500–$10,000; possible jail | Misdemeanor; felony for volume |
| Cash payment where prohibited | $1,000–$5,000 per transaction | Misdemeanor in most states |
| Knowingly buying stolen metal | Felony; substantial jail time | Felony — receiving stolen property |
License Actions
Beyond fines and criminal charges, state agencies can issue formal warnings, place dealers on probationary status with enhanced reporting, suspend licenses temporarily, or revoke licenses permanently with a waiting period before reapplication.
FAQ
Criminal receiving stolen property charges require knowledge the property was stolen. If you genuinely did not know and followed all documentation requirements, criminal charges are unlikely. However, ignoring obvious red flags — seller could not explain source, no ID provided, prohibited item purchased — can support "should have known" charges in some states. Your best protection is consistently following every documentation requirement for every transaction.
Penalties vary by state and specific circumstances. Consult a licensed attorney for advice on specific situations.
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