Irregardless its fraud no matter what you think of recycling.
Illegal yes, apparently but hardly fraud in the moral sense.
Malum prohibitum, and not malum per se.
In fact, it is a noble thing he was doing if t=saving the environment is the goal.
The bottle says it’s worth “X” in a certain state.
So, on its face, it appears you are helping that state meet its incentive.