A Kalihi recycling company shut down yesterday, one week after an employee was arrested in a Honolulu police sting operation to clamp down on illegal copper sales.

Aiea Recycling's yard at 1811 Dillingham Boulevard was chained shut yesterday, and a man operating a small forklift inside said, "We're closed. Closed forever. Sorry." The man declined to give his name.

Police arrested two recycling company employees last week, the first detention of alleged copper buyers in a recent string of thefts that resulted in $760,000 of losses last year. Prior to last week, police had arrested copper thieves but not buyers.

Kalihi police Maj. Kurt Kendro, who oversaw last week's sting operation, said he was disappointed that Aiea Recycling went out of business.

"I would never want a business to close," Kendro said. "We just want them to follow the rules and follow the laws. We always want voluntary compliance."

Aiea Recycling was one of seven metal recyclers on O'ahu, six of which had operations in Kalihi or Kalihi Kai.

Legislators and police say that unscrupulous recyclers — or legitimate recyclers that don't follow proper purchasing procedures — provide the only source of income for copper thieves, who have cost schools, utilities, homeowners and even stretches of freeway hundreds of thousands of dollars in lost copper wiring, plumbing and other copper parts.

"There is a need for recyclers and we definitely need them out there," Kendro said. "They are an important part of the economy. We just need them to follow the rules."

Undercover patrol officers visited five Kalihi area metal recyclers last week and tried to sell raw sheets of copper provided by the Air Force, copper transformers and two spools of copper wiring printed with the name of the owner, Hawaiian Electric Co., Kendro said.

Aiea Recycling employee Kyung Hee Chon, 44, was charged with felony attempted second-degree theft last week. Police said Kyung Hee Chon thought a 653-pound HECO spool was stolen but bought it anyway for $1.60 per pound.

A man who answered the phone at Aiea Recycling yesterday identified himself only as the brother of owner Rick Chon and said Wednesday was the company's last day of operations.

The man said he was shutting down the business because of last week's felony arrest.

"Yes, that's why we're closing," the man said, who declined to be identified.

Toufaasulu Pulou, 58, of Ho-nokai Hale, also was arrested last week. Pulou is an employee at Island Recycling Inc., which is next door to Aiea Recycling on Dillingham Boulevard.

Pulou, a 15-year employee who works with her husband at Island Recycling, was charged with a misdemeanor violation.

The president of Island Recycling, James Nutter, said the spool of HECO copper wiring that undercover officers were offering for sale never came into the company last week and he does not understand why Pulou was arrested, booked and charged.

He suspects that she was arrested for not following the exact procedures outlined in the state's scrap metal law but said police have offered no explanation.

Nutter has hired an attorney to represent Pulou and said the case has unfairly hurt his company's reputation.

"Long-time customers are asking why we're buying stolen property," Nutter said. "We're not. It's company policy to follow the law exactly."

Island Recycling is Hawai'i's largest recycling company and purchases cardboard, newspaper, scrap iron, aluminum, stainless steel, glass bottles and plastics for recycling. Copper purchases represent only two-tenths of 1 percent of the volume of material purchased at Island Recycling's Dillingham location, Nutter said.

"Why would we risk our reputation for such a little amount?" Nutter asked.

Pulou is scheduled to appear in District Court on March 15.

Yesterday, Aiea Recycling's competitors saw an increase in potential copper sales from contractors, plumbers and others who normally sell to Aiea Recycling.

Maj. Kendro said Kalihi police will continue to investigate copper transactions and possibly conduct more sting operations.

If there's any benefit to Aiea Recycling's closure, Kendro said, "The unintended consequence is that it might have a positive effect to put all of the other recyclers on notice that we're doing these operations."

On Wednesday, police arrested a 51-year-old man on a misdemeanor theft charge for allegedly selling copper wiring from Siu's Electric Corp. on Alakawa Street.

Siu's Electric reported on Feb. 18 that 100 pounds of copper wiring had been stolen and later the same day the 51-year-old man tried to sell 54 pounds of it to CM Recycling Co. on Sand Island Access Road, police said.

CM employees refused to buy the copper because the man had no identification, police said. So the suspect had another man with proper identification sell the copper — but the 51-year-old was later arrested anyway, police said.

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com.