Criminal Sentencing in Clean Air Act Case

The former project manager at an oil processing plant that exploded in Montana in 2012 injuring three employees was sentenced today to two years of probation and fined $5,000. Mark Hurst pleaded guilty on February 27th to negligent endangerment under the federal Clean Air Act.

On September 27th, a jury convicted co-defendant Peter Margiotta of all three counts against him related to the plant explosion. The jury found Margiotta guilty of conspiracy and two violations of the Clean Air Act (general duty and knowing endangerment). Margiotta was president and director of Custom Carbon Processing, Inc., a Wyoming company that constructed the Michels Disposal Well and Oil Processing facility in Wibaux in 2012. Hurst testified against Margiotta at trial.

Although Hurst had notified his superiors of serious problems at the plant, he continued to operate the plant and kept it open. Simply notifying management of problems is not sufficient to avoid criminal liability under federal environmental laws.

Criminal Prosecution Awaiting Killer of Pregnant Dolphin in Mississippi

Someone shot and killed a pregnant bottlenose dolphin in Mississippi -- and there's a big reward for anyone who helps find her killer.

According to the National Oceanic and Atmospheric Administration (NOAA), the pregnant dolphin was found dead on a beach in Waveland, Mississippi, in April of this year. A necropsy revealed that the mother dolphin died of a gunshot wound from a small caliber bullet. Her unborn calf then died as a result of the mother's death.

Dolphins are protected under the federal Marine Mammal Protection Act of 1972. The Act prohibits harassing, harming, killing, and feeding wild dolphins. Violations are punishable by up to $100,000 in fines and one year in prison per violation. It was not clear whether the killing of a pregnant dolphin and her unborn calf would constitute one violation or two.

According to NOAA, several wildlife organizations are offering a combined reward of $11,500 for information leading to the identification and/or prosecution of those responsible. Anyone with information is asked to call either the NOAA Enforcement Hotline at (800) 853-1964 or NOAA's Slidell (Louisiana) Enforcement Field Office at (985) 643-6232. Tips can be left anonymously, but contact information must be provided in order to claim the reward.

NOAA reports that violence against dolphins in the Northern Gulf of Mexico region has been on the rise in recent years. Since 2002, at least 24 dolphins have been found stranded showing evidence of being shot with guns or arrows or being impaled with other objects. Sixty-eight percent of those strandings have occurred since 2010.

NOAA is also asking for the public's help in preventing future harm to dolphins by not feeding or attempting to feed them from boats or the shore. Dolphins who are fed by people learn to associate humans with food and put themselves in dangerous situations when they approach people, boats, and fishing gear looking for food. They can learn to approach fishing gear and teach this behavior to their young. Such behavior has, in some cases, resulted in violence toward dolphins by fishermen frustrated by the loss of their catch.

False Certifications Lead to Criminal Convictions

A pallet recycling company and its former owner were sentenced for criminal violations related to the falsification of certificate stamps in violation of the Plant Protection Act by the U.S. District Court for the Eastern District of New York, according to a Justice Department press release.  American Pallet Recycling LLC (APR) will pay a fine of $100,000, and its former president and owner, Raymond Viola, will pay $1,000 and serve three years of probation, after relinquishing the business to his son.  APR plead guilty to one felony count of falsifying stamps that certified wood pallets were heat treated to prevent pest infestation, and were suitable for use in international transportation.  Viola plead guilty to a similar misdemeanor count.

Heat treatment is required in order to prevent parasites and plant diseases from entering the United States in wood packaging materials.  Wood pallets that carry products transported within the United States are not required to be heat treated.  From March 2007 through January 2011, Viola created copies of stamp certifications used by legitimate wood pallet treating companies, which he and his employees applied to pallets APR sold.  Those pallets were then used to carry products from the United States to foreign countries in violation of the Plant Protection Act.  The charges against APR and Viola involved the fraudulent stamp certification of hundreds of untreated wood pallets that were sold to other companies for use in product export.

Prison Sentence for Asbestos Violations

We've warned about improper asbestos handling and removal before.  Here's another example of why.

A man convicted last year of illegally removing, handling and disposing of asbestos at a Kankakee, Illinois building has been sentenced to ten years in federal prison.  According to an EPA press release, Duane "Butch" O'Malley was also ordered to pay more than $47,000 to the EPA related to the cleanup, plus a $15,000 fine.

Prosecutors said employees of O'Malley's company, Origin Fire Protection, removed asbestos from insulation, loaded it in unmarked bags and dumped the bags in an open field.

Oyster Harvest Lands Federal Conviction for Fishermen and Seafood Wholesaler

Following a seven-week trial, multiple defendants were convicted in federal court in New Jersey on multiple felony counts related to the harvesting and possession of oysters.  The defendants (two fishermen and a seafood wholesale company) were convicted on multiple felony counts of violating the Lacey Act by creating false records for illegally possessed oysters, trafficking in illegally possessed oysters and falsifying records used by the FDA to track the movement of oysters in interstate commerce.  They and a fourth defendant -- an employee of the seafood distributor -- were also convicted of conspiracy to commit those crimes and obstruction of justice.

The Lacy Act prohibits creating or submitting false records regarding fish or wildlife moving in interstate commerce and also prohibits trafficking in fish or wildlife known to be illegally taken or possessed.  The FDA and state health agencies require that oyster purchasers and sellers maintain accurate records of the amounts and locations of oyster harvest for all oysters they buy and sell in order to protect the public health and minimize the impact of any oyster-borne outbreak of disease.

Starting in at least 2004 and continuing through 2007, Thomas and Todd Reeves, oyster fishermen who owned Shellrock (dba Reeves Brothers), would take more than their legal quota of oysters from the Delaware Bay.  The Reeveses would then falsify the records that New Jersey used to track the number of oysters harvested from the bay and sell those unreported oysters to Mark Bryan at Harbor House in Delaware.  Thomas Reeves, Todd Reeves and Renee Reeves, along with Mark Bryan at Harbor House, would also coordinate to cover up their overharvest by falsifying records required by the FDA.  In addition, the defendants conspired to obstruct the federal investigation into their illegal conduct by providing investigators with false records and making false statements that attempted to hide their conduct.  Bryan and Harbor House also purchased unreported oysters from Kenneth W. Bailey Sr., another New Jersey oyster fisherman.  Like the Reeveses, Bailey would create false records required by the state and the FDA to hide his overharvest.

The fair market retail value of the unreported oysters during this time was in excess of $750,000, and the defendants over-harvested their quota in some years by nearly 60 percent.

The maximum penalty for the corporations is up to five years of probation and a fine in an amount that is the greater of $500,000 or twice the gross gain for each count.  For the remaining defendants, the maximum penalty for conspiring to commit offenses and for violations of the Lacey Act is up to five years in prison and a $250,000 fine; the maximum penalty for obstruction of justice counts is up to 20 years in prison and a $250,000 fine.

The lessons here?  Follow the rules, and if you get caught breaking the rules, 'fess up to it!  Trying to hide it and creating fake reports will just make things worse.

Environmental Violations Lead to Death, Criminal Indictments in Texas

A federal grand jury indicted Port Arthur Chemical and Environmental Services LLC (PACES) and its former president, Matthew L. Bowman, on charges of conspiracy to illegally transport hazardous materials resulting in the deaths of two employees.  The 13-count indictment describes a scheme in which hazardous materials were transported illegally with false documents and without placards, and where workers were not properly protected from exposure to hazardous gases.  The exposure resulted in the deaths of two truck-driver employees at the PACES facility on not one, but two occasions, in December 2008 and April 2009.  Both deaths were attributed to exposure to hydrogen sulfide.

The defendants were charged with conspiracy to violate the Hazardous Materials Transportation Uniform Safety Act (HMTUSA) and two counts of failure to implement appropriate controls to protect employees from exposure to hydrogen sulfide in violation of the Occupational Safety and Health Administration Act.  The defendants were also charged with transportation of hazardous materials without placards, falsifying documents in violation of HMTUSA, violations of the Resource Conservation and Recovery Act and making false statements to government officials.

 According to the indictment, Bowman was president and owner of PACES, located in Port Arthur, Texas, and CES Environmental Services (CES) located in Houston.  PACES was in operation from approximately November 2008 to November 2010, and was in the business of producing and selling caustic materials to paper mills.  The production of caustic materials involved hydrogen sulfide.  Hydrogen sulfide is classified as a poisonous gas by HMTUSA.  According to the National Institute for Occupational Safety and Health, hydrogen sulfide is an acute toxic substance that is the leading cause of sudden death in the workplace.  Employers are required by the Occupational Safety and Health Administration (OSHA) to implement engineering and safety controls to prevent employees from exposure above harmful limits.

According to the indictment, Bowman was responsible for approving and directing PACES production operations, the disposal of hydrogen sulfide wastewater, employee safety precautions, directing the transportation of PACES' wastewater, and determining what safety equipment would be purchased or maintained.

The conspiracy and substantive counts of the indictment each carry a maximum possible sentence of five years in prison and a maximum fine of $250,000 for Bowman, and a $500,000 maximum fine for the company.  Both PACES and CES have filed for bankruptcy.

Entrance to PACES facility in Port Arthur, TX.

Man Pleads Guilty to Illegal Dumping for Filling Wetlands in New York

Filling wetlands and lying to government agents are both potential criminal offenses.  Julius DeSimone of New York found that out the hard way.

DeSimone pleaded guilty today in federal court in New York for conspiring to fill wetlands in violation of the Clean Water Act and to lying to federal agents in an attempt to conceal his crimes.  According to the charges, DeSimone and his co-conspirators engaged in a multi-year scheme to illegally dump 8,100 tons of pulverized construction and demolition debris that was processed at New York and New Jersey solid waste management facilities and then transported to a farmer's property for disposal.

The defendants concealed the illegal dumping by fabricating a New York State Department of Environmental Conservation (DEC) permit and forging the name of a DEC official on the fraudulent permit.  DeSimone admitted in the plea agreement that once DEC and the EPA learned of the illegal dumping, he lied to federal agents.

DeSimone faces up to five years in prison and a $250,000 fine for each felony count, and may be ordered to pay for portions of the cleanup at the site.

NC Hog Farm and President Sentenced to Pay $1.5M for Clean Water Act Violations

The U.S. Department of Justice announced that Freedman Farms was sentenced today in federal court to five years probation and ordered to pay $1.5 million in fines, restitution and community service payments for violating the Clean Water Act when they discharged hog waste into a stream that leads to the Waccamaw River.

The company's president was sentenced to six months in prison to be followed by six months of home confinement for his role in the violations.

According to evidence presented at trial, Freedman Farms discharged hog waste into a tributary of the Waccamaw River that flows through the White Marsh, a wetlands complex.  The farm had approximately 4,800 hogs.  The hog waste was supposed to be directed to two lagoons for treatment and disposal.  Instead, in December 2007, hog waste was discharged from the farm directly into the tributary.

We've been involved in CAFO cases, Clean Water Act cases, and potential criminal cases like this one many times.  Intentional discharges are no laughing matter, and can lead to jail time.

Iowa Building Owner Guilty of Improper Asbestos Removal

The owner of a building in Des Moines, Iowa, pleaded guilty in federal court today to conspiracy to violate the Clean Air Act and violating the Act's provisions relating to asbestos removal. The Act requires building owners to follow certain work practice standards to ensure that any asbestos in their buildings is removed safely. Required safety measures include notifying the appropriate regulatory agency before commencing removal activities, wetting the asbestos during the removal and before disposal, and properly disposing of the asbestos at an EPA-approved disposal site.

In the plea agreement, Bob Knapp admitted to overseeing the renovation project from 2006 through February 2008, which involved converting several floor of the building into luxury residential condominium units and renovating other floors to attract additional commercial tenants. He also admitted that he conspired with another defendant to remove asbestos-containing materials ("ACMs") from the building without complying with the Act's requirements. While Knapp was overseeing the project, ACMs were removed and disposed of in an uncovered dumpster.

Knapp will be sentenced to between 33 and 41 months in prison and may be required to pay a fine of up to $250,000. A sentencing date has not yet been set.

Indiana Wastewater Treatment Operator and Managers Charged with Conspiracy and Violating the Clean Water Act

United Water Services Inc. (UWS), the former contract operator of the Gary Sanitary District wastewater treatment works in Gary, Ind., and two of its employees, were charged today with conspiracy and felony violations of the Clean Water Act (CWA) in a 26-count indictment returned by a federal grand jury, the Justice Department announced today.

UWS and employees Dwain L. Bowie, and Gregory A. Ciaccio, have been charged with manipulating daily wastewater sampling methods by turning up disinfectant treatment levels shortly before sampling, then turning them down shortly after sampling.

UWS entered into a 10-year contract to operate the Gary Sanitary District wastewater treatment works in 1998, in exchange for $9 million annually. UWS’s contract was renewed in May 2008. As contract operator, UWS handled the operation and maintenance of the treatment works, and was responsible for environmental compliance. To ensure compliance with the discharge permit, UWS was required to take periodic representative wastewater samples, including a daily sample to determine the concentration of E. coli bacteria in the wastewater.

According to the indictment, the defendants conspired to tamper with E. coli monitoring methods by turning up levels of disinfectant dosing prior to E. coli sampling. The indictment states that the defendants would avoid taking E. coli samples until disinfectants had reached elevated levels, which in turn were expected to lead to reduced E. coli levels. Immediately after sampling, the indictment alleges, the defendants turned down disinfectant levels, thus reducing the amount of treatment chemicals they used.

Dwain Bowie was UWS’s Project Manager for the Gary facility beginning in 2002, and was in charge of the Gary operation. Gregory Ciaccio joined Bowie’s staff in July 2003, and eventually was made the Plant Superintendent, in charge of day-to-day operations.

The CWA makes it a felony to tamper with required monitoring methods at a permitted facility like the Gary Sanitary District. If convicted, Bowie and Ciaccio face up to five years in prison on the conspiracy count and two years on each of the CWA counts, as well as a criminal fine of up to $250,000 for each count. The company may also face fines and/or probation.

The allegations in the indictment are mere accusations and all persons are presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.

The case was investigated by the Northern District of Indiana Environmental Crimes Task Force, including agents from the Criminal Investigation Division of the U.S.E.PA., the FBI and the Indiana State Police. The case is being prosecuted by the U.S. Attorney’s Office for the Northern District of Indiana and the Justice Department’s Environmental Crimes Section.

Asbestos Convictions in New York

Let's get the ball rolling here. We'll start with a simple announcement about an enforcement action to ease our way into blogging.

Earlier this month, a federal judge sentenced two operators of asbestos abatement companies to prison for illegally removing and disposing of asbestos in upstate New York. John Wood was sentenced to four years in prison, required to pay restitution of $854,166.06 to victims, and placed on supervised release for three years following the completion of his prison term. Curtis Collins was sentenced to two years in prison, required to pay restitution of $114,902.89, and ordered to serve three years of supervised release.

Both defendants pleaded guilty to conspiring to violate the federal Clean Air Act and the mail fraud statute. Wood also pleaded guilty to contempt of court for numerous new asbestos-related crimes which he committed while awaiting trial on the original charges. (Can you say "Darwin Awards candidate"??)

In 2005, after being released from prison for unrelated felonies, Wood began operating an asbestos abatement company. He directed his employees to remove asbestos in a way which, rather than removing all asbestos, dispersed it and left substantial quantities behind, significantly contaminating numerous businesses and homes. Some of asbestos which was removed was buried on a farm which was cleaned up using Superfund monies.

In order to deceive clients into believing that the asbestos had been removed from their properties, Wood used Mark Desnoyers, a licensed air monitor. Desnoyers falsified air samples so that laboratory results appeared to prove that all asbestos had been removed from homes and business when, in fact, they remained seriously contaminated. Wood previously testified against Desnoyers at trial.

Collins worked for Wood and also ran his own asbestos abatement company. He pleaded guilty and cooperated with prosecutors by testifying against Desnoyers at trial.

Desnoyers was convicted on all counts of an indictment charging him with conspiracy to commit mail fraud and Clean Air Act violations, as well as related substantive violations. Desnoyers is scheduled to be sentenced next month.

This just goes to show that you've got to be careful who you hire to remove asbestos from your properties. The property owners who hired Wood and Collins had to pay a lot more to remediate their properties than they would have spent had they hired a competent, reputable contractor in the first place. They will likely never recover the money Wood and Collins have been ordered to pay in restitution.

Conviction for Discharging Bleach into Sewer System

Many people don't realize that discharges of certain chemicals into public sewer systems violates the federal Clean Water Act. Our firm represents a number of wastewater treatment plants here in Alabama, so we see firsthand the effects of illegal discharges into sewer systems.

Last month, KIK (Virginia) LLC pleaded guilty in federal court in Virginia and agreed to pay a $75,000 criminal fine plus $25,000 in community service payments for negligent discharges of bleach to the local sanitary sewer system, which is a misdemeanor violation of the federal Clean Water Act. In addition to the criminal fine and community service payment, KIK has agreed to serve one year of probation, during which it will continue to develop and implement an environmental management system that it began developing during the investigation. It also will complete an environmental audit conducted by an independent auditor.

KIK operated a facility that manufactured bleach and other household products. In September 2003, local authorities discovered elevated concentrations of bleach in the sanitary sewer lines servicing the facility. An investigation revealed that, at that time and for a number of years before, under previous owners, employees at the plant washed bleach that had been spilled in the production and bottling process and off-specification bleach into the plant’s floor drains. The floor drains channeled the bleach into the plant’s drainage system, which lead to the city's sanitary sewer system. The plant did not have a permit to discharge bleach to the sewer system and did not monitor its discharges.

The Clean Water Act prohibits discharges into a sewer system of any pollutants that the discharger knows (or should know) could cause property damage. Bleach is a corrosive chemical that, in sufficient concentration, may damage metal and other materials used in the sewer system and is considered a pollutant under the Clean Water Act. Other substances which could cause problems if dumped into the local sewer system include oil and grease, ammonia, pesticides, cleaning products, and medications, to name just a few.